Moving to the U.S. from Canada? Be aware of the tax issues!
Relocating to a different place is hectic! And it is so, especially when you move to a different country altogether, with different laws and regulations, and different society! And, if that wasn’t enough, there are the invariable tax problems of that country that you’re going to face after relocation. As U.S. Tax Consultants in Toronto, let us guide you through the potential issues that you’re going to face!
The information you need
Many Canadians relocate to the United States each year, for various reasons. But, when they do, they fall under the jurisdiction of the U.S. law and become subject to their tax laws applicable to the taxable residents.
U.S. income tax return includes income from all around the world. The tax residents need to report worldwide income on their U.S. income tax return. If you’re a former Canadian citizen subject to Canadian income tax, your tax distribution will be subject to U.S. income taxation, as well. This means, the same income is subject to taxation in multiple countries, where you have citizenship. Although, there will be a tax credit for the tax paid. But, if the tax paid in Canada is more than the taxable amount for this income in U.S., there is no need to pay additional tax.
The benefits you get
It’s not all dark when you relocate to the U.S. There are benefits as well, that you can potentially receive on relocation. International Tax Consultants will notify you of the advantages that you can get. When you leave Canada, you are treated as having sold and repurchased your past assets at market value on moving to the U.S., depending on the kind of assets you choose. Moreover, there are benefits with respect to pension plans and old-age security as well!
What do you have to disclose?
Apart from the benefits, there are a few things you need to disclose to the U.S. tax departments. These are either associated with reporting of income, or for informational purposes, filled in a form or separately. Although, there are obvious penalties if you fail to make fully and adequately disclose what you need to.
At Accounting and Tax, we provide solution to tax issues, including those when you relocate from Canada to the U.S. We offer advice to our clients with utmost sincerity and solve the complicated tax issues that they’d inevitably face immediately after relocation.
