I am a Canadian citizen on a TN visa for several years. A move back to Canada looks to be happening this spring/summer.
I'm trying to sort out a checklist for leaving the US, with respect to taxes. I will contact an accountant, but for now I just want to understand the process.
I understand form 1040-C must be filed before leaving, but I'm not sure what form 2063 (aka the departure/sailing permit) is. Can someone explain? Aside from these forms, are there are any others of which I should be aware?
On a related note, how much time is necessary to reasonably get these forms into the IRS? e.g. if one gave 2 weeks notice to the employer, and then 7-10 days for a "wrap up", would that seem reasonable?
thanks
M.
checklist for leaving USA
Moderator: Mark T Serbinski CA CPA
This i what I would do, if I were a non-GC holder, like you.
1. Make sure all US-source payments are made to me before moving to Canada. Delay moving date if necessary.
2. Ensure that your pension funds are in an account with a manager that will deal with you after you are in canada.
3. Decide if you will roll all your pension/etc into a Roth, or as much as possible. This needs to be decided before returning to Canada. Paying the extra tax now in US, will likely be worth it. This can take a few weeks, so you may want to plan to hang back in US. I would be submitting an I-539 to change to B2 status, and seriously consideringa temporary move to a no-state tax state, to avoid any state tax on my Roll conversion.
The follwing applies specifically to non-GC holders, not to GC or US citizens.
4. it is likely that, if you leave more than 1 or 2 months into the tax year, that you will file a FULL year 1040 in US, to take advantage of MFJ and standard deduction. This means that you will want to avoid selling any non-retirement investemnts that have GAINED, until after the new year (that way you will not owe any US tax on the gain). You should sell any LOSING investments before moving back (so you can clim the loss on this years 1040). The deemdd acquisition rules in Canada make pre-arrival losses of no use to you in Canada, but also sheild pre-arrival gains. Waiting until the new year to sell will mean small Cdn tax and nothing to report in US at all. Note that selling is not the same as transferring the investments to Cdn accoount as is. To triogger losses, you need to sell them. Likewise, until you sell you do not trigger gains either.
5. Decide if you should collapse your RRSP before going back, paying the 25% Cdn tax, and whatever US tax you might owe, or keep it intact.
1. Make sure all US-source payments are made to me before moving to Canada. Delay moving date if necessary.
2. Ensure that your pension funds are in an account with a manager that will deal with you after you are in canada.
3. Decide if you will roll all your pension/etc into a Roth, or as much as possible. This needs to be decided before returning to Canada. Paying the extra tax now in US, will likely be worth it. This can take a few weeks, so you may want to plan to hang back in US. I would be submitting an I-539 to change to B2 status, and seriously consideringa temporary move to a no-state tax state, to avoid any state tax on my Roll conversion.
The follwing applies specifically to non-GC holders, not to GC or US citizens.
4. it is likely that, if you leave more than 1 or 2 months into the tax year, that you will file a FULL year 1040 in US, to take advantage of MFJ and standard deduction. This means that you will want to avoid selling any non-retirement investemnts that have GAINED, until after the new year (that way you will not owe any US tax on the gain). You should sell any LOSING investments before moving back (so you can clim the loss on this years 1040). The deemdd acquisition rules in Canada make pre-arrival losses of no use to you in Canada, but also sheild pre-arrival gains. Waiting until the new year to sell will mean small Cdn tax and nothing to report in US at all. Note that selling is not the same as transferring the investments to Cdn accoount as is. To triogger losses, you need to sell them. Likewise, until you sell you do not trigger gains either.
5. Decide if you should collapse your RRSP before going back, paying the 25% Cdn tax, and whatever US tax you might owe, or keep it intact.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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keyofdminor
- Posts: 9
- Joined: Sun Apr 04, 2010 7:25 pm
Focus on the more important things.
Cdns, by treaty, can pretty much ignore anything that is a requirement for non-resident aliens, unless they opt to use it, since they can treat themeselves the same way US citizens do (Article XXV). USCs don't file any of this when leaving US, nor should you.
Cdns, by treaty, can pretty much ignore anything that is a requirement for non-resident aliens, unless they opt to use it, since they can treat themeselves the same way US citizens do (Article XXV). USCs don't file any of this when leaving US, nor should you.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best