In the tax season, Canadian snowbirds who spend considerable time in USA have to be careful about their tax liabilities. There are numerous regulations regarding the tax that they have to pay. It is always a good idea to be aware of your status as a tax payee so that you don’t end up at the wrong side of tax laws. Here are the top 2 tax liabilities that Canadian snowbirds have to keep in mind.
Case 1: Real Estate ownership in USA
If you own real estate in the USA for personal use, the tax treaties between the countries of USA and Canada give you the exemption of paying any taxes. However, when you sell the properties you hold in USA, you will have to report the monetary gain by filing a tax return with the IRS. To be able to do that, the tax payer has to obtain a Individual Tax Identification Number of ITIN from the USA.
Case 2: Income from Rentals in USA
Some Canadian snowbirds own properties in USA that they give out in rent. The tax laws come into force if the period of rental exceeds 15 days in a year. When the rental period is less than 15 days, the income generated through rentals is not taxable. However, on exceeding 15 days, the rental income is liable to tax and needs to be reported to the IRS. The next condition on the table here is the individual tax laws of different states. For example, Canadian snowbirds owning properties in Arizona or California are liable to state taxes, while states like Florida don’t have such regulations.
There are other cases as well which we shall discuss in subsequent posts. But if you are a Canadian snowbird, you need to get in touch with the best Canadian tax consulting service, theaccountingandtax.com.
Mansoor Suhail has been providing Accounting, Bookkeeping and Taxation services since 2001 in Toronto, Canada. He is fully competent in Canada and U.S.A tax filings and consultation. He can handle Personal, Small Business, Partnerships and Corporations tax issues with full confidence. He is also able to handle International tax issues for Foreign Students, Expatriates and Foreign Corporations.
