Moving back US to Canada: What taxes to worry with Severance

[calicanuck]

Hello,

I had a question regarding tax issues (or ways to make a severance package tax efficient). I am currently resident in the US but likely to move back to Canada next year. I will be receiving a severance package lump sum in the US (from a US company) but I was looking for ways to make it tax efficient. The only way I can make it more efficient is to try to defer severance payment until Jan 2009 so I'm in a lower marginal tax bracket this year. However, by doing that, I'm worried that will complicate things if I am moving back to Canada near end of this year (or early next year). I guess if I move next year than it may be okay as I still get taxed US. However, if I move back this year, then deferring may not be so 'efficient'. Are there any other ways to structure US severance package so to minimize taxes

[nelsona]

The only way is to do both: delay the severance until early in the new year AND delay your move back until after you receive it.

The next best is to wait in US to get severance, regardless of time of year.

The worst would be to move back near the end of the year and then get your severance. OUCH.