newcomer to canada

[juliani]

hello! I want to thank you in advance for your generosity with your time and advice, it is really and highly appreciated, and I hope God will return the favor!

I am an eastern european working in US under H1B (working visa) being taxed as a US resident. I have a roth IRA, little cash and a small property under litigation in Europe: I may lose my property rights, since there is a lawsuit pending. I am not sure that things will clarify by the time i'll move to canada.

I "landed" as Canadian immigrant (permanent resident) on Sept 1, 2007,(just stayed there for a couple of days) but planning to actually relocate to vancouver on August 2010 when my working visa will expire. I have a roth IRA.

Questions:
1) Should I worry to consider myself a canadian resident from taxation point of view right now? It didn't even occurred to me until I read these posts, how complicated all these taxes are! I was planning to open a checking (no interest) account with a canadian bank and buy some cdn dollars, from time to time, considering the favorable rate of exchange USD/cdn. Could I do that if I don't have a SIN number? And if I do so, will I be considered a factual resident with ties to canada, even if my money won't earn interest (I'll just keep them on a checking account)?

2) from what I read on this forum, in 2010 when I'll permanently move to canada I will have to file 2 tax returns: the usual 1040 for the 6-7 months worked in US, then the 2nd as a newcomer in Canada. Do I have to include my earnings for the whole year 2010 for tax deduction, or just the my future earnings in Canada? What about the other savings, which were already taxed in US?

3) Now I am given the chance to contribute to a 401K (no employer match, though) for 2008-2010, that would relieve my tax burden, however I think i'd better stick to my roth IRA to avoid future tax complications in canada; however, I am almost certain that my earnings will decrease significantly in Canada, so probably I'D be better off saving on taxes (i.e. investing in 401K) right now; I am so confused: how much tax would I have to pay on a 401K distribution, assuming, say 50,000 CDN y earnings?

4) Do I have to have all cash with me when I move to canada, otherwise it will be taxed again? Whe I landed as immigrant I had a list of all possesions, but the officer didn't even look, he said I'll declare when we'll actually come and settle.

Any information will help.
Many thanks again!
Julia

[nelsona]

1. If you open a bank account in canada while living in US, you will not be considered a Cdn resident. Even if you earn interst, you will not be taxable in canada on it (in US you will of course).

You should be trying to get your SIN number now.

2. In the year you leave US, you will probably file a full year tax return (1040) in US reporting all you made in that entire year, and also a Cdn arrival return on which you will report only income .

3. Your best solution is proably to contribute as much as you can to your 401(k) and then just before leaving US, convert this to a Roth. This will get you tax deduction now, and then when you convert you will pay US tax on it then. This will allow you to contrbute more to your Roth (30-45K) in thee long run that what you can contribute to your Roth on your own.

4. What is with so many peaople thinking that Canada taxes people on their money? They don't. Canada taxes your INCOME. Money is not income.