Cross border Tax

US-Canadian Cross-Border Tax

Are you an American or Canadian crossing the border to live, work, and or invest? Let us plan for you.

Whether you are living, working, or investing on either side of the border, we can help you better understand your tax obligations and devise a plan that works for you.

Our Service

If you are an American moving to Canada or if you are a Canadian moving to the United States, it’s important to plan ahead so that you can minimize taxes. Our cross-border tax services is catered towards both individuals and corporations. We develop specific tax planning that minimizes your overall tax obligations through eliminating double taxation while ensuring full compliance with the IRS and CRA. For corporations that are looking to move and conduct business across the border, we can devise a cross-border corporate structure that will reduce overall tax liability.

Key Elements of our Cross-Border Tax Services

  • Smart tax planning to avoid double taxation in Canada and the United States
  • Full compliance with IRS and CRA filing requirements
  • Advice on how to minimize Canadian and American personal and corporate income taxes
  • Development of a cross-border corporate structure to avoid a high tax bill

 

 

Client Testimonial:

I had a great experience with Madan Chartered Accountant Firm. I required a US Tax number their knowledge was invaluable to me. I received my tax number in short order at a very reasonable cost. Thank you Brandon for all of your help - Leslie Whitton, President of D-Fence Products Inc.

Need more information? Call us at (905) 268-0150

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Comments 23

  1. I work in the US and Canada as well. On my 1099 slip it shows the income taxes, social security and the medicare taxes paid.

    What amount should I report on the T1 return to claim foreign tax credit?

  2. Hi Enrico,

    Hi, you should report all the income taxes, social security and the medicare taxes paid as shown on the 1099 slip. Please be sure to convert the amounts in CDN using the average conversion rate for that year.

    Thank you.

  3. Hi, I have an US LLP which owns an LLC which further owns a rental real estate. The value of the real estate is more than $100,000. Should I report this on the T1135 form?

  4. Hi Maurice,

    If the cost of the shares of the LLP is less than $100,000, you wouldn’t have to file the T1135 form.

  5. If I move to the USA and become a non resident in Canada. Will I be able to vote and apply for benefits such as CCTB and GST Credit.

  6. Hi Martin,

    The citizenship status wont be affected with your non residency for tax purposes. You would still be able to vote however, the benefits payments such as the CCTB and GST credits wont be available to you as you for them you have to be a resident of Canada.

  7. Hi
    What would be my tax implications if I earn USD$ 90000/ year for a company based in New York but I work from home here in Ontario. If the company deducts US taxes will I receive a credit when I file my taxes and what amounts will I be liable for if the company does not deduct any US taxes.

    Thanking you for your help.

  8. Hi Maddy,

    If you receive a W2 and are an employee of an American company, you will have to report and pay tax on your US earnings in both the US and Canada.

    You will have to file a 1040 NR (US return) and a Canadian Tax Return (T1). To avoid double taxation, you will receive a foreign tax credit on your Canadian tax return for American taxes paid.

    However, if you operate as a self employed person from Canada, then you do not have to file a US return. You still have to file a Canadian tax return and pay Canadian income taxes on your US self employment income.

    Thanks,

  9. Hello Allan,
    I recently went to Florida for my sister’s birthday and we went to the casino. I ended up getting a fair
    amount of winnings. Are there any implications when I come back home to Ontario? IS there anything I
    need to know before coming home?
    Thanks,
    Gerri

  10. Hi Moe,

    If you are a Canadian resident, then you will be double taxed. You will first pay US personal taxes on your share of the S-corporation’s taxable profit. You will then pay Canadian personal taxes on any distributions (i.e. dividends) paid to you by the S-corporation.

    The CRA does not recognize S-corporation’s as flow-through entities, but instead classifies them as foreign corporations. You will not receive a foreign tax credit on your Canadian tax return for the American taxes paid.

  11. I want to invest in the US in Real Estate (flipping house or buy/renovate & sell) in Atlanta. I am Canadian citizen. What kind of company should I set up (LLC/Corporate/ LP)? I just want to minimize taxes when transferring the money to Canada

  12. Hello Madan & team,
    I was working in the US until Jan 2018, and was a green card holder. Left Canada several years ago and did not have income in Canada. Everything was fine until this week.

    I took a job with the Federal Govt.and moved to Canada this week. I plan to stay on the US side to visit family and also maintain residency requirements for the family. I get paid in Canada, but found s place to live in the US side and will commute. Can be Managed as I will be alone in Canada. Rest of the family is still in USA.

    For 2018 USA tax, I intend to file MFJ, declare the US income from my spouse and my Canadian income.

    For 2018 Canada tax, I plan to file my income alone, as the family is not claiming anything from Canada.

    Also, since we (family in US, and me commuting from US side in to Canada) technically don’t live in Canada, I suppose we will not get health coverage for any of us from Canada. Also, GST credits cannot be claimed. Any complication you see here, pls advise so we can correct and comply. Thanks!

    1. Hi BVP, your understanding is correct. You will have to file a non-resident return with the CRA and pay Canadian income taxes on your Canadian income. To avoid double taxation, you can claim a foreign tax credit on your US return for the American taxes paid.

  13. Hi there,
    When I left Canada and moved to US (to take up jobs) in 2016, I filled NR73 and stated in there to CRA that I have house, credit cards, accounts in RBC and TD Bank, driver’s license, health cards, TFSA, RRSP for me and my spouse in Canada. However, I was still termed as deemed non-resident in Canada, which was surprising. Do you agree with that assessment or should I write back to CRA regarding residency status? I file income tax return for the rental income (Part 13 return, have NRK account, request NR6 performa). For 2016, I filed my income tax return for part of year (3 months) when I was in Canada and then for the remainder of year as a resident alien in US (since I met the substantial presence test, more than 183 days). While filing my US income tax return, do I need to declare my TFSA accounts (they have non-redeemable GICs) in Canadian bank? If so, how?

    Thank you

    1. Hi Saurabh, pursuant to the Canada-US tax treaty, you are a resident of the country where your permanent home is located. As I understand, you have a rental property in Canada, and not a home in Canada where you can live. That is likely the reason the CRA said that you became a non-resident of Canada after you moved to the US.

      You have to file forms 3520 and 3520A with the IRS in respect of your Canadian TFSA.

  14. Hi Alen

    I am a canadian citizen who maintain residential ties in Canada ( my wife lives in Canada) but I live and work in US. I am a resident of US for tax purposes … Am I considered deemed non resident now in Canada?

    1. Hi Goli, according to the Canada-US Tax Treaty, you are a resident of the country where your permanent home is located. A permanent home can either be rented or owned. However, if you have a permanent home in both countries, then you are a resident of the country where your personal and economic ties are strongest.

      I do not have enough information about you and your ties to help you make a determination on your residence status. However, you could be considered as a Canadian tax resident because you have a home in Canada and your wife lives in Canada. In other words, you are in the US only for work, while you maintain ties to Canada.

  15. Hello Allan,
    I’ve been watching your videos and reading your articles and you are very informative. Thank you!

    I live in Toronto, and willing to open an online store. I will most probably get sales from the US. Do I need a cross border bank account? Will my taxes be cross border?

    Thanks.

    1. Hi Maria,

      Your Canadian company will not be liable for US profits tax, unless it has a fixed place of business in the US. If you plan on collecting US dollars from customers, then your company should open up a US dollar business account with a Canadian bank.

  16. 1. As a US citizen, living in Canada and a CA Resident, should I avoid interest bearing savings (i.e TFSA) and checking accounts?
    2. Recently married, should we file joint or separate? Wife (CA citizen) and myself (US citizen and CA resident). Should we hold joint checking or saving account?

    1. Hi Mike,
      Thank you for your questions. Avoid opening up a TFSA because TFSA’s are treated as non-resident trusts for US tax purposes. As a result, income earned in a TFSA is taxable in the US. In addition, TFSAs result in additional tax compliance for US citizens; specifically, forms 3520 / 3520A have to be filed for a TFSA owned by a US citizen.

      Canadian checking and savings accounts are okay for you to hold. Have your spouse keep her accounts separate from yours, so that they do not need to be reported to the IRS on the US FBAR.

      If you file jointly with your spouse, you will receive a higher standard deduction and you will benefit from tax rates applicable for joint-filers, which are better than those for separate filers. However, if your spouse is a high income earner, you may be pushed into a higher tax bracket, making you worse-off. To determine whether MFJ or MFS is better, prepare you returns under both methods to determine which one results in overall lower taxes.

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