Timing of Move US to Canada
Moderator: Mark T Serbinski CA CPA
Timing of Move US to Canada
I’m planning on moving from US to Canada in next 16 months. I have some flexibility in move timing. Are there any timing implications that I should consider? I was thinking a move earlier in the year would be beneficial as I have some traditional 401k money to convert to Roth IRAs (from a previous employer) that could be executed at lower tax rate given US income from a few months of working. Any thoughts here?
Re: Timing of Move US to Canada
I’m also a green card holder and plan to renounce it. Am I only taxed in US pre-renounciation in the tax year?
Re: Timing of Move US to Canada
Generally, one files a full year 1040 when leaving US, regardless of renunciation or not. There is no tax advantage in renouncing immediately.
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Re: Timing of Move US to Canada
If I minimize my US income in a given year, wouldn’t my US tax rate be lower? I’m trying to understand if I should time accordingly the Roth conversion from a tax standpoint.
Re: Timing of Move US to Canada
You didn't ask about minimizing your income, you asked about timing a move to/from US.
1040NR will give a higher tax than 1040, which requires reporting full year world income. If you are minimizing income, then yes, converting to Roth in a year with low income is best.
1040NR will give a higher tax than 1040, which requires reporting full year world income. If you are minimizing income, then yes, converting to Roth in a year with low income is best.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: Timing of Move US to Canada
Would the US income alone for the year we move be considered as the base on which marginal tax for 401k to roth conversion be applied or would the canadian income be added and that would be the base?
Re: Timing of Move US to Canada
Depends how you file and when you leave US. It is often better to file full year (with Cdn income) in departure year. for better tax rate. But any Cdn wages you would earn after departure, would likely be excludable using Foreign earned income exclusion.
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