I'm currently on TN and single 30 year old, moved to NYC since 2016 and non resident of Canada.
My TN job will end in 07/2018 (TN status valid until 05/2019) and I will have to find another job either before that or within the 60 days + 180 days for the grace period and B2 status before settling back in Canada for good.
Question, as I'm currently filing my taxes for 2017 and have the following planned. If I don't find a job for a few months my income for 2018 will be significantly lower than 2017 and I would like to plan it to my advantage.
I will:
- Contribute 5500 max to Roth 401k by April
- Hold off on selling stocks until 1 year mark (long term) in my US investment accounts, then sell off losses after 1 year mark and hold winners until I figure out if I return to Canada
Additionally, can I return to Canada right after layoff (say few days) and claim American unemployment insurance benefits while keeping personal assets/properties in the US? I will be actively looking for a job in Canada (both in Canada/US) while being eligible for the benefits. If so, do I become CAN resident right away or is it until I retrieve all my properties back from US?
2018 US/CAN tax planning for TN termination
Moderator: Mark T Serbinski CA CPA
These are some good questions.
First, if your Income in 2017 is higher than your income in 2018 will be, I would suggest, rather than a Roth contrib, that you put it in an IRA before the deadline, get the tax deduction, and convert to Roth a few days later, thus making it taxable in 2018. This will essentially shove $5500 of taxable income from 2017 to 2018. You may also want to contribute your 2018 Roth early, before you leave.
if you are thinking of moving from US, I agree you should hold off from selling ALL winners until after you move (sell losers before leaving -- it doesn't matter if losses are short-term or long-term). This will avoid US taxation on these gains altogether. You may wish to wait until the end of the tax year that you move until you know how you will file for 2018.
To claim UI, you will have to live in Canada, I'm afraid, certainly enough to make you resident (you will need an address). So you may wish to wait in US and try to find work instead of coming back, but that will depend on your comfort level.
Remember too, that if you leave US to get UI, you will not likely be let back into US until you can demonstrate that you actually live in Canada (CBP doesn't like to admit job-seekers, and you will have recently lived in US and have a place there to live -- not a good candidate for being admitted as a tourist). You will forfeit the TN grace period, as well as the ability to file for B2 grace period. Typically you need sufficient time to establish a lease, utilities, etc, and carry proof thereof before attempting to come back. Another indication that you are a Cdn tax resident at that point.
Remember to file for B2 DURING the 60 day TN grace period , and realize that you might not get the full 180 days. You need to indicate why you would need so much time (the USCIS is already giving you 60 days) given you are single and have lived in US less than 2 years. it has never been automatic 6 months, and likely less so now with the 60 day layoff grace.
First, if your Income in 2017 is higher than your income in 2018 will be, I would suggest, rather than a Roth contrib, that you put it in an IRA before the deadline, get the tax deduction, and convert to Roth a few days later, thus making it taxable in 2018. This will essentially shove $5500 of taxable income from 2017 to 2018. You may also want to contribute your 2018 Roth early, before you leave.
if you are thinking of moving from US, I agree you should hold off from selling ALL winners until after you move (sell losers before leaving -- it doesn't matter if losses are short-term or long-term). This will avoid US taxation on these gains altogether. You may wish to wait until the end of the tax year that you move until you know how you will file for 2018.
To claim UI, you will have to live in Canada, I'm afraid, certainly enough to make you resident (you will need an address). So you may wish to wait in US and try to find work instead of coming back, but that will depend on your comfort level.
Remember too, that if you leave US to get UI, you will not likely be let back into US until you can demonstrate that you actually live in Canada (CBP doesn't like to admit job-seekers, and you will have recently lived in US and have a place there to live -- not a good candidate for being admitted as a tourist). You will forfeit the TN grace period, as well as the ability to file for B2 grace period. Typically you need sufficient time to establish a lease, utilities, etc, and carry proof thereof before attempting to come back. Another indication that you are a Cdn tax resident at that point.
Remember to file for B2 DURING the 60 day TN grace period , and realize that you might not get the full 180 days. You need to indicate why you would need so much time (the USCIS is already giving you 60 days) given you are single and have lived in US less than 2 years. it has never been automatic 6 months, and likely less so now with the 60 day layoff grace.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
For going back to Canada, remember the following:
1. Try to receive as much of your US income owed to you before becoming Cdn resident.
2. make sure you do not contribute to Roth after becoming Cdn resident
3. Consider taking all IRA/401(K)s and convert to Roth before leaving. It will be taxed that year in US, but will then be tax-free forever.
1. Try to receive as much of your US income owed to you before becoming Cdn resident.
2. make sure you do not contribute to Roth after becoming Cdn resident
3. Consider taking all IRA/401(K)s and convert to Roth before leaving. It will be taxed that year in US, but will then be tax-free forever.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Thanks.
I also have about 1k in HSA and 6k in employer sponsored Roth 401k. Should I try to use the HSA before I leave or does it not matter, and I assume I should also convert the Roth 401k to Roth IRA? Is it only to avoid the investment fees since both are after after tax?
Lastly, the day I land in Canada after job ends will be the day I become Canadian resident right? If so I need to plan the date carefully and avoid travel in the next few months.
I also have about 1k in HSA and 6k in employer sponsored Roth 401k. Should I try to use the HSA before I leave or does it not matter, and I assume I should also convert the Roth 401k to Roth IRA? Is it only to avoid the investment fees since both are after after tax?
Lastly, the day I land in Canada after job ends will be the day I become Canadian resident right? If so I need to plan the date carefully and avoid travel in the next few months.
Well, it is always good to have matching, but the matching will be taxable in future as it is put in a non-Roth 401(k).
The choice to leave the funds with your employer-sponsored account after you leave is up to you, depending on fees, diversification of investmebts etc.
What I was highlighting would be to convert any IRA or 401(k) (ie. taxable funds) to Roths before you return to Canada, so you can pay tax on those conversions now, in US, and then have all these funds sheltered forever.
I would not put too much stock in running to Canada to get UI. Personally I would stay in US at least for the 60 days, get my finances in order, and hopefully find another US job. Your UI would not cover the hassle of moving and moving back, in my opinion.
I'm not sure what you mean by avoiding travel 'the next few months'. Until you are laid off, you can travel freely, and it has no impact on when you become a Cdn resident. You don't need to count days. But you do need to plan not to travel AFTER your layoff, unless you're returning to Canada to stay for at least two months.
The choice to leave the funds with your employer-sponsored account after you leave is up to you, depending on fees, diversification of investmebts etc.
What I was highlighting would be to convert any IRA or 401(k) (ie. taxable funds) to Roths before you return to Canada, so you can pay tax on those conversions now, in US, and then have all these funds sheltered forever.
I would not put too much stock in running to Canada to get UI. Personally I would stay in US at least for the 60 days, get my finances in order, and hopefully find another US job. Your UI would not cover the hassle of moving and moving back, in my opinion.
I'm not sure what you mean by avoiding travel 'the next few months'. Until you are laid off, you can travel freely, and it has no impact on when you become a Cdn resident. You don't need to count days. But you do need to plan not to travel AFTER your layoff, unless you're returning to Canada to stay for at least two months.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
So I checked and turns out I can't contribute to traditional IRA for 2017 due to my income level. I only have 5500 available for Roth IRA for 2017 which I think I should fill regardless of future plans.
Question, if I become non resident of US, can I still hold investment/IRA accounts with trade brokers (TDAmeritrade) and regular bank accounts or will they not want to do business with me?
Question, if I become non resident of US, can I still hold investment/IRA accounts with trade brokers (TDAmeritrade) and regular bank accounts or will they not want to do business with me?