US citizen, independent contractor... moving to Canada

[curtin144]

Hi. I'm in the process of applying for permanent residency in Canada. I'm a US citizen, and I've been an independent contractor with a company for a couple of years. I'd like to keep working for them if I move to Canada (Manitoba). They're just a small outfit; they have no Canadian presence.

I've read through the forum, and I think I have a sense of some of the implications, but wanted to confirm and get some details...

1) I know I'd continue filing with the IRS. But I'd primarily be paying income taxes to Canada, and would be able to claim taxes paid as a credit somewhere in my 1040, correct? Is it a 1:1 credit, i.e. paying $10k in income tax to Canada would reduce the US tax bill by $10k? Looking real quickly at rates, should I expect to pay more in Canada than I would in the US, and consequently have a small or zero US tax bill?
1a) For the company I'm working with, do they still send a 1099-MISC to the IRS with my SSN, like usual?

2) What about FICA taxes? Would I owe the US any part of the 15.3%? (I guess 13.3% if I make it in 2011!) If not, I'll still get some Social Security payback for the 10 years I've contributed, right? Does Canada have some equivalent payroll/self-employment tax?

3) I have two accounts with TD Ameritrade -- a regular brokerage and a Roth IRA. I know I have to notify them of my change in address. But if they're unwilling to accommodate this (do we know if Ameritrade is accommodating?), I'll have to transfer the accounts to a Canadian firm, correct?
3a) I've seen in other posts that, upon a transfer, the Canadian gov't recognizes the cost basis as the value of the investments on the date of the transfer. Is that right? Does this mean there's a taxable event in the US, as if all investments were sold? If not, is there no capital gains tax to be paid to the US on the original investment?
3b) If it can stay in the US, I assume I'd pay taxes on dividends and capital gains to the US... What about to Canada?
3c) What happens to the Roth? If I understand other posts, I can't contribute any more to it, but the investments will still grow tax-free? And that's true in either case: if it stays at Ameritrade, or if a Canadian brokerage knows how to hold it?


Thanks very much in advance. This site seems like it has a ton of answers... even if everyone (especially including me) has some really complex questions!

[nelsona]

Too many questions at this time. What you need to know is that you need to sell any losing investments BEFORE leaving US, and you need to make sure your US broker is comfortable handsling your retirement accounts whwn you live in canada. You will have to close your uS non-sheltered brokerage accounts.

It is not the transfer that will trigger Cdn cost basis. It will be date of YOUR arrival in canada. The transfers will trigger nothing.

The other thing is that US citizens living in canada rarely have any US tax obligation in the end.

Regardless of hwre the f=unds are kept they will need to always be reported on both returns, with various tax credits given so that you will end up paying the higher tax rate (usually Cdn) on each type of income.

[curtin144]

Ok, thanks. I know it's a crazy time of year, so I appreciate the advice... It's a long way off in any event.