Common Mistakes of Cross Border Taxes - US Canada Taxes
USA Canada Tax Issues
Ensure you know the cross border tax implications before filing for your taxes in the U.S. and Canada. More importantly, before you move speak to a Tax specialist and ensure you have put your affairs in order in your home country so you do not have tax issues while abroad.
This article will help you identify if you are making mistakes with declaring your financial assets for tax preparation. This is one of the main areas of confusion, frustration and stress.
Tax Preparation - Mistakes
Here are the key cross border tax preparation mistakes people make that you will want to avoid.
1. Filing your taxes in a vacuum.
It is important to realize that you should not prepare your cross border taxes in a vacuum. That is, information in one tax return will be required to finish the other.
2. Worldwide income declaration.
Depending on your situation, one or both countries will need information about worldwide income.
3. Not Reporting funds in your foreign bank accounts.
Foreign bank accounts and any combination of accounts totaling greater than ten thousand dollars ($10,000) will need to be reported in your U.S. taxes.
4. RRSP reporting.
Earnings within your RRSPs and RRIFs may need to be reported.
5. Foreign tax credits can help you save on your taxes.
There are many tax credits you can use to your advantage. Most people are not aware of all the tax credits they can leverage in their new country as well as the credits available to you as a foreigner.
6. Not Declaring non-residency when leaving Canada to save on your taxes.
On the departure year you may be able to declare being a non-resident and save on your taxes. Do it correctly and your future taxes can be much lower.
When the US dollar falls against most currencies, it presents an opportunity for you to save on your taxes.
Tax Preparation - Next Steps
1. Find a Cross border Tax Specialist to speak to about your situation.
IMPORTANT TN Visa Expert Tips:
1. Speaking to a tax specialist about your situation is free. You should not be charged for the initial consultation (via email or phone).
2. A Cross border tax specialist will listen to your situation and identify any issues you may need to deal with based on your situation as well as opportunities for tax savings.
3. Find a tax specialist you feel comfortable with and feel you can trust. You want to work with someone you can trust. By contacting a Tax specialist, you will quickly be able to determine if you feel comfortable asking them questions, if they are responsive, if they have a nice personality and if they are able to intelligently answer your questions.
4. Ask them about their fees. Ensure you know what their fees are. You are hiring them to strategize and prepare your taxes and it is their responsibility to quote you a price so there are no surprises.
TN Visa Tax Specialists: