Common US-Canada cross border tax blunders and how to avoid them
If you’re an U.S. businessperson, hoping for business transactions in Canada, or a Canadian resident working and earning in the U.S., the cross-border income is an important thing to note! Where should you pay the taxes – resident country or country where you earn?
Asking around most tax consultants in Toronto, it’s better to not be ignorant about these questions, as you can make common mistakes, if you are.
The common mistakes you can make if you’re not careful
The biggest mistake that people make is failing to realize that the U.S. taxes you on what you earn all across the globe. As long as you’re an upstanding U.S. citizen, you’re going to have to file a tax return on time! But, in Canada, if you’re not a Canadian citizen anymore, you don’t have to pay taxes!
Cross-border tax blunders are extremely common. You always have to keep in mind that whatever be the case, you have to file tax on both countries. The Canadian Revenue Agency has the right to tax their citizens worldwide. The IRS has the right to tax you as long as you’re working there. Expats tax consultants in Toronto and other Canadian cities need to be approached about these blunders.
It’s extremely important that you tax foreign credits. The reason behind this being the usual one that states you have to file tax on the income you earn on a different country. It helps avoid double taxation, too. And, whatever you do, don’t forget the Canada-U.S. tax treaty from 1980. It affects your tax filing process and future planning.
How to resolve?
In scenarios such as the aforementioned ones, it’s only logical that you consult cross-border tax specialists. They can identify your situation clearly and guide you through each step of the process. You need to have complete trust in your consultant that they will quickly be able to determine what you need to do and you do it.
At The Accounting and Tax, one of the primary Tax consultation services in Toronto, we offer valuable knowledge about any and every tax-related problem of yours. We specialize in guiding our clients through the most delicate of tax consultation services. So, if you’re in need of a proper business transaction in Canada and U.S., we’ll be happy to assist you throughout the process.
