U.S.A tax filing if you move to Canada
If you are U.S green cardholder or citizen and wish to move to Canada, you need to do some planning before you make the move to Canada.
Tax planning is absolutely different than tax preparation. Tax preparation is solely based on your tax slips. You input data from these slips in a software and calculate your taxes. Tax planning on the other hand uses legal tax avoidance techniques to reduce your tax bill and ensure you pay the appropriate amount of taxes.
Remember, U.S green card holders and citizens in any part of the world are required to file their taxes every year and have to declare their worldwide income.
American citizens who earn U.S wages and have U.S withholding are not entitled to automatic extension.
American citizens or green card holders who move to Canada should have their taxes prepared with the one who knows both American and Canadian tax laws. If you have your taxes prepared by two different people, chances are that your returns are not fully optimized.
U.S citizens or Green card holders working in Canada have to file U.S tax return annually and declare their worldwide income, including any Canadian employment income, investment income, rental income, business income, capital gains etc. All income has to be converted to U.S dollars.
You can request an extension to file your taxes by filing form 4868. This will not provide you an extension to pay your taxes. All tax owing must be paid before April 15th.
U.S green card holders who return to Canada and do not obtain a U.S. immigration reentry can put their green cards at risk of forfeiture. If you don’t file your taxes in the U.S and spend majority of the time in Canada, you have very high chances of losing your green card.
To know more visit The Accounting and Tax or call 416-283-8774
