Hi,
I'm a dual us & canadian citizen who is working in US for past 7 years. I have IRA/401K and non-taxable account holding tax-free municipal bond funds. I'm moving to Canada for employment purposes in the next several months and will settle down in Canada and probably won't return to US.
Does anyone have any suggestions of what I need to do before I actually move?
Thanks. :roll:
Dual US & Canadian Citizen moving to Canada
Moderator: Mark T Serbinski CA CPA
there is 2 things tha twill help you in the long run:
Consider converting as much of your IRA/401(K) to a Roth as possible before moving to canada. This may create a tax hit now, but will make more of your income tax free in both US and (especailly important) Canada later.
Sell any winning stock positions before leaving US. You will proboably never pay US tax again, so you want to get all your gains on the books before leaving, as you will also be starting with fresh values in canada. This is especailly the case if you are carrying losses forward from year to year.
Consider converting as much of your IRA/401(K) to a Roth as possible before moving to canada. This may create a tax hit now, but will make more of your income tax free in both US and (especailly important) Canada later.
Sell any winning stock positions before leaving US. You will proboably never pay US tax again, so you want to get all your gains on the books before leaving, as you will also be starting with fresh values in canada. This is especailly the case if you are carrying losses forward from year to year.
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
Thanks NelsonA! In response to your suggestions:
a) You mentioned sell winning stock positions & also converting to roth-IRA and take a tax hit now. Can this tax be used to deduct on the amount owed on Canadian taxes (if I do it the year I move i.e. before I move to canada but in the same fiscal tax year?)
b) Is there any benefit of having investments in non-IRA accounts such as ETFs while in canada? I'm aware that Canada taxes world-wide income. I was considering that since brokers like TD Ameritrade & Vanguard have ETFs that are commission free unlike the brokers in Canada.
c) Also, pertaining to the above, if non-IRA investments generate income are they subject to US withholding tax? Can this tax be used as a 'foreign tax credit' to deduct on Canadian taxes?
Thanks! This is a great forum and I read your posts on other people's replies and they are very insightful & helpful!
a) You mentioned sell winning stock positions & also converting to roth-IRA and take a tax hit now. Can this tax be used to deduct on the amount owed on Canadian taxes (if I do it the year I move i.e. before I move to canada but in the same fiscal tax year?)
b) Is there any benefit of having investments in non-IRA accounts such as ETFs while in canada? I'm aware that Canada taxes world-wide income. I was considering that since brokers like TD Ameritrade & Vanguard have ETFs that are commission free unlike the brokers in Canada.
c) Also, pertaining to the above, if non-IRA investments generate income are they subject to US withholding tax? Can this tax be used as a 'foreign tax credit' to deduct on Canadian taxes?
Thanks! This is a great forum and I read your posts on other people's replies and they are very insightful & helpful!