Hi,
I am being offered a position with a US Firm and will be living in Philadelphia, PA. I am currently a resident of Canada and I currently own a home in Toronto, ON Canada. I plan on renting my house out while I will be living in the US. I have been reading a lot of articles online and there seems to be no consistency in terms of how the tax stuff works. I by no means understand this stuff at all so please go easy on me if I sound stupid cause all this is foreign to me.
1. With my salary (Full time), the company will be deducting US taxes from my pay like any other company would whether it be in Canada or US. So when it comes time to file my taxes in the US, I follow standard procedures. But what about Canada? I understand I need to report my US income back to Canada as I still am a citizen and a resident of Canada though I physically no longer live there. What am I reporting?
2. When reporting to Canada my foreign income, what taxes am I paying to them? I keep reading something about some difference? What or which difference?
3. If I still have a house under my name in Canada and I am using it as a rental property, do I have to claim that in the US or just Canada? Is that considered Income? What if I don't report it as income? Realistically, all i am doing is having someone pay my mortgage while I am in the US as most likely after 5 or 6 years I plan on coming back to Canada.
4. If I have to pay taxes in US and Canada then what benefit is there for Canadians going to US for work? Is there some magic number where if you make over x salary then it is worth it? Example, let's say I am being offered $125K Annually.
Any help is appreciated please as I don't want to make a decision without understanding this stuff first as this will be the deciding factor for me if it is worth it for me.
CDN working for US firm on TN Visa....worth it? Tax wise
Moderator: Mark T Serbinski CA CPA
1. You will no longer be considered resident of canada (since you will be renting out your home and living in US), thus you will not be reporting any US incoem to canada after you move.
You will file a departure return for Canada, based on the date you leave.. Nothing in your situation makes for any "inconsistency".
2. See 1
3. Yes. You will pay Cdn tax on the renatl income (on a 216 return), and also report the income in US and get a credit for it. Please read up on "Emigrants" on CRA website, it is pretty clearly expalined there.
4. See 1
You will file a departure return for Canada, based on the date you leave.. Nothing in your situation makes for any "inconsistency".
2. See 1
3. Yes. You will pay Cdn tax on the renatl income (on a 216 return), and also report the income in US and get a credit for it. Please read up on "Emigrants" on CRA website, it is pretty clearly expalined there.
4. See 1
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
I understand what you are saying but why will I be considered a NON-RESIDENT? The home will still be under my name and I will frequently go back to Canada and still have my bank accounts in canada as well.
I don't want to loose my status as a Canadian Citizen as my wife will end up spending 3-4 months of the year back in Canada and we don't want to give up our health care if we ever needed, we could just go back.
I hope I am making sense here lol.
If I am considered a non resident and let's say 5 years down the road I decide to come back to Canada, will I be able to with no issues?
I don't want to loose my status as a Canadian Citizen as my wife will end up spending 3-4 months of the year back in Canada and we don't want to give up our health care if we ever needed, we could just go back.
I hope I am making sense here lol.
If I am considered a non resident and let's say 5 years down the road I decide to come back to Canada, will I be able to with no issues?
Did you read the Emigrants guide? It is really not that complicated.
You must have a home in canada to be resident there. IUnless you have some very tolerant tenants, you will not have a home in Canada once you rent it out. Additianally, even if you kept the home in Canada, if you also had a home in US, a job there, and your spouse there with you, the treaty would make you US resident and Cdn non-rtesident.
This has nothing to do with citizenship. You will have healthcare through your employer, and will get coverage back when you return. Besides, if you leave gfor as long as you say you are, your Cdn coverage lapses anyways. Also, your Cdn coverage is useless in US.
DO NOT try to fake a Cdn address if you do not live there> there is no point, it will cost you money, and will not achieve wah tyuou are trying to pretend to keep anyways.
You can return to Canada anytime you want. What do you think your citizenship means?
You must have a home in canada to be resident there. IUnless you have some very tolerant tenants, you will not have a home in Canada once you rent it out. Additianally, even if you kept the home in Canada, if you also had a home in US, a job there, and your spouse there with you, the treaty would make you US resident and Cdn non-rtesident.
This has nothing to do with citizenship. You will have healthcare through your employer, and will get coverage back when you return. Besides, if you leave gfor as long as you say you are, your Cdn coverage lapses anyways. Also, your Cdn coverage is useless in US.
DO NOT try to fake a Cdn address if you do not live there> there is no point, it will cost you money, and will not achieve wah tyuou are trying to pretend to keep anyways.
You can return to Canada anytime you want. What do you think your citizenship means?
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