Minimizing the amount of tax I have to pay

maushana · Post by **maushana** » Sat Dec 10, 2011 4:00 pm

Hi Guys,

I'm a Canadian citizen with a Green Card living in Canada with my wife who is an American citizen. We have a 2 year old who's born here in Canada but does not yet have his dual but is considered as dual anyway.

My wife has been in Canada since 2003 and is a permanent resident here in Canada. She has not filed US taxes since she came to Canada. She worked from 2006 to 2010 here in Canada. Took 2010 off for mat leave then came back to work Jan-2011 and got laid off Jul-2011 and is currently not working.

I got my GC 2.5 year ago and had no idea I had to do taxes in the US until last year. I have not done my taxes in the US either because I never worked or lived there. I got the GC as I was planning to go live there but never did find a job so it didn't happen and I never surrendered my GC.

Now that all this mess with the taxes is happening I want to cover my @55 and get some advise from the experts.

I have about $90K+ in different places like RRSP, Tax Free Account, Savings, properties etc. I have 3 properties here in Canada which 1 is for my parents, 1 I live in and the other is rented. I also have a corporation registered here in Canada shat I use for my business.

Here is what I want to know:

1) If I move any of the funds I have in my TFA and Savings for example into the Corporation will the IRS still be able to come after those funds or are they out of reach now?

2) Will moving this money into the corporation help minimize the IRS taxes I might have to pay or will it make it worse?

3) What do the experts recommend I do?

Any help is appreciated.

Thank you,

Mike

nelsona · Post by **nelsona** » Sat Dec 10, 2011 7:38 pm

Your talking crazy!

99.9% od US taxpayers living in Canada owe absolutely nothing to IRS. They simply have to file their taxes, just like any other US citizen.

Just file your 1040 (BOTH of you) and all other required forms for the past three years, and you will be fine.

We have written much guidance here of how to report all the things you've talked about, as well as how to clim varous exemptions and credits to reduce your tax to ZERO.

JGCA · Post by **JGCA** » Sat Dec 10, 2011 10:20 pm

Do not move funds into a corporation you shall pay more CND tax on the investment income than you do holding the funds personally especially if you collapse your TFSA, also putting money inside a corp can trigger further reporting requirements not less, the way to bring down teh corp tax on investment income is to pay yourself a taxable dividend to recover refundable dividend tax on hand you do not want to do this without professional advise.

maushana · Post by **maushana** » Mon Dec 12, 2011 9:57 am

Nelsona and JGCA,

Thank you both for the quick reply and info. This is very helpful and will let me sleep a bit better at night. I'm still worried that they might want my wife to pay something but not sure yet.

I would appreciate it if you can point me to where I can find the forms I need to fill please? This is my first time doing US taxes and I have no idea how that works. I want to start preparing all the info so I can file "keeping my fingers crossed". Any help is appreciated.

Thank you,

Mike