Moving back to Canada

newfie99 · Post by **newfie99** » Sat May 29, 2010 9:48 pm

Hi Nelsona
I have read in several of your replies about getting all US income prior to moving back to Canada. Just curious why this is important. I am moving back to Canada in a couple of weeks but my final paycheck will not be deposited into my account until after I leave. Is that a problem? I plan on leaving my checking & money market accounts open here in the US until I get some things situated in Canada & pay all my final bills down here. Then I will close everything down & transfer it all to Canada.

Also, am I correct in assuming I will file a dual status US tax return for 2010? I have a green card but will be returning it once I move back. Do I report income from US (before my move) on my Canadian taxes & vise versa for my US taxes?

Thank you for all the great info you provide here...it's been a huge help!

nelsona · Post by **nelsona** » Sun May 30, 2010 8:27 am

By taking all your US-source income before moving back, you avois having to report any of it on your Cdn return. Leaving it in a US bank does not avoid the need to report it, if you recieved it after moving.

As to how you will file in US, you can file a dual-status return. However, even if you give back your GC, you can file a full year 1040, to get beterr tax rate and/or standard deduction. Any Cdn wages you have can be exmpted with 2555 or tax cedited with 1116.

I would think twice about giving back GC.

nelsona · Post by **nelsona** » Sun May 30, 2010 8:28 am

What about your pension, etc. Are you sure you don't want to transfer it to Roth before leaving.

Is there a reason that you are moving so quickly to break US ties?

newfie99 · Post by **newfie99** » Sun May 30, 2010 1:37 pm

Not rushing. I planned this move for a while. I just wanted to work up to a week before I leave to make some extra $$ so there really isn't any way to avoid getting my pay after I leave...unless I stay here just to get my paycheck which is kind of silly since then I would have to pay rent etc for an extra month. Reporting that little bit of income on my Canadian taxes won't make that much difference to my payable tax will it? Is that final paycheck the only US income I will have to report on my Canadian taxes? Also, shouldn't the US tax I pay on that income be counted as a credit? The amount paid to me after I leave should be less than $2000. The money I already have in my accounts does not factor in since I have already received it, right? Can I just transfer it once my accounts are opened in Canada?

So, even if I hand over my GC I can still file as a resident for the entire year but report my Canadian earnings? Basically I would be filing as a resident in Canada & a resident in the US? Is that right?

On a previous topic you recommended officially turning in my GC since I do not plan to live in the US again. I should have gotten my citizenship but it is too late to worry about that now. I have resigned from my job & accepted a position in Canada. We talked about my 401k previously & your advice was great but I am unable to convert to Roth before I leave so I plan on just leaving it where it is. It will be around 6 weeks after my last day of work before my employer notifies Fidelity of my separation so I really don't have any options there. I don't own any real estate & my only accounts are my checking, money master, & 401k so my finances aren't horribly complicated.

Thanks

nelsona · Post by **nelsona** » Sun May 30, 2010 4:32 pm

Sounds OK. I always picture most people moving back to canada are usually looking to take a break, not jump from one job to another.

Do realize that the few weeks of pay you will get now, will be more than made up in future taxes, unless your pension is only in the 5-digit range.

But, yes, the Cdn tax you will pay on that last paycheck will be small.

newfie99 · Post by **newfie99** » Sun May 30, 2010 5:42 pm

Actually my 401k IS only in that range...it's practically non-existent...less than $20,000. I had planned on cashing it out but after reading some stuff here I figured I should just leave it alone for now. So were the other things I assumed correct?

newfie99 · Post by **newfie99** » Sun May 30, 2010 6:01 pm

Just looked at my calender & realized that I will actually get paid the day before I cross the border (I'm driving & doing some visiting along the way)...so does that mean I will not have to report ANY of my US earnings on my Canadian return?

nelsona · Post by **nelsona** » Sun May 30, 2010 6:04 pm

I would think the answer would be pretty clear from what I said earlier.