Help Tax Planning on becoming a non-resident with Complications

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Sinbad
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Joined: Thu Aug 22, 2019 1:37 pm

Help Tax Planning on becoming a non-resident with Complications

Post by Sinbad » Thu Aug 22, 2019 1:50 pm

Hello Everyone,

I'm new to the forum and one of my friends which is an accountant told me to try posting my situation here.
I'm a dual US/Canadian Citizen living in Canada and is moving to the US on October 1. I work for a Canadian company which has a Sister US Company that they will transfer me to.
I sold my condo (principal residence) moved back home and sold all my stocks/mutual funds/TFSAs and are all sitting in cash. I've have about 100k of RRSP contribution room and I have used the First Home Buyers plan by pulling 25,000$. I will be importing my car from Canada to the US this year. (Trying to cut all my principal ties)

1)
I'm trying to reduce my tax impact. I was told that I should tell Canada I'm a non-resident Jan 4, 2020, mail my medical card and drivers license and not pay back my FHB 25,000$ and file it as an income. https://www.canada.ca/en/revenue-agency ... l#nn_rsdnt
• include the remaining HBP balance as RRSP income on line 129 of your income tax and benefit return for the year that you become a non-resident.
This would trigger a 25,000$ Canadian based income and would have about 1500$ tax impact. Is that true? or will it be considered as a non-resident tax at 25%? Also will the US consider that as another source of income and tax me? From my understanding it does not meet the definition as a source of income in the US.

2)
2nd concern is my work. When I start working in the US in October they will start filing a W2 for the US. Will I need to report this to Canada as a source of income ? Since I’ve stayed over 183 Days I can’t even tell them I’m a non-resident if I wanted to. I just want to confirm that I will not be double taxed?

3)
3rd concern. I do not want to close my Canadian bank accounts as I do not want to convert to USD as I'm hoping the rate in 5-10years would be back 1:1 for me to convert. Would that be considered as a Canadian tie and keep me as a Canadian Resident for tax purposes?

4)
Can I file re-location fee for expenses that is not paid by my work as a credit on my Canadian Return??


Thank you in advance!

Sinbad
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Joined: Thu Aug 22, 2019 1:37 pm

Re: Help Tax Planning on becoming a non-resident with Complications

Post by Sinbad » Sun Aug 25, 2019 1:47 pm

Bump?

nelsona
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by nelsona » Sun Aug 25, 2019 9:46 pm

If you leave in October, that is your departure date. You then have 60 days to pay your HBP or it becomes taxable on your departure return for 2019, added to your other income for the year.

You don't have to do anything to be considered non-resident except move to US.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nelsona
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by nelsona » Sun Aug 25, 2019 9:47 pm

4). No, only moved within Canada are eligible for moving expenses. US, of course, no longer allows moving expenses.
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Sinbad
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by Sinbad » Tue Aug 27, 2019 10:03 am

nelsona wrote:
> If you leave in October, that is your departure date. You then have 60 days
> to pay your HBP or it becomes taxable on your departure return for 2019,
> added to your other income for the year.
>
> You don't have to do anything to be considered non-resident except move to
> US.


I don't tell anyone I'm leaving in October. I'm keeping my car, drivers license, medicare card, investments, etc. I'm going to import my car, return my drivers license, medicare card and tell all the banks and investements in Canada to change my account to non-resident Jan 6, 2020.
Then call the CRA and say I'm a non-resident as of Jan 6, 2020.
They can't say no you become a non-resident in October can they??

Sinbad
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Joined: Thu Aug 22, 2019 1:37 pm

Re: Help Tax Planning on becoming a non-resident with Complications

Post by Sinbad » Tue Aug 27, 2019 10:05 am

nelsona wrote:
> 4). No, only moved within Canada are eligible for moving expenses. US, of
> course, no longer allows moving expenses.

Damn! Could I report the moving expenses on my US tax return?

nelsona
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by nelsona » Tue Sep 03, 2019 9:21 pm

As I said, you leave in October that is your departure date, doesn't matter who you "tell" or don't tell

, and, as I also said, US no longer accepts moving expenses as a deduction.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Sinbad
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by Sinbad » Tue Sep 10, 2019 5:51 pm

Got. What about Q1 about the First Home Buyers plan?

nelsona
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by nelsona » Thu Sep 12, 2019 7:59 am

What about it? Either pay it back or include it on your 2019 departure return. Your choice.
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nelsona
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by nelsona » Thu Sep 12, 2019 8:00 am

It would not be eligible for non-resident taxrate.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Sinbad
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by Sinbad » Thu Sep 12, 2019 10:03 am

Hello Nelsona,

So to confirm.
If on Jan 4th 2020. I tell Canada I'm a non resident and include it in my 2019 income. I would be taxed as if it is my entire income for 2020 and it would be
Federal tax: ~ $1,300
Quebec tax: ~ $1,325

Correct?

nelsona
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by nelsona » Thu Sep 12, 2019 6:17 pm

It would be included on your 2019 tax return, since you will use October as your departure date. It will be added to your 2019 Cdn income.
By reporting the correct departure date, you will not have to include US income earned in Oct to Dec, 2019.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Sinbad
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by Sinbad » Fri Sep 13, 2019 1:17 pm

What if I put my departure date as Jan 4, 2020?
So it would be in year 2020.

nelsona
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by nelsona » Sat Sep 14, 2019 1:59 pm

We,, you already said you are moving for work in October. So that would not be an accurate departure date. At minimum it would make your US wages taxable in Canada if you chose that later date.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

adeboloj
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Re: Help Tax Planning on becoming a non-resident with Complications

Post by adeboloj » Mon Sep 23, 2019 2:25 pm

Thanks Nelsona for good job here, i understand this more clearly now after reading couple of info here.
Seems it doesnt matter, as long as your departure date in Canada aligns with when you stop reporting income generated from your US income.
I see a number of people here say call CRA (and you said it doesnt matter who you tell or dont), some say mail back their health card etc,
Does this really matter, do one need to call CRA or mail back health card to say he or she is non resident.
Your ideology seems right to me, cos if you say departure date is Oct 1, it means that's the date you stop declaring outside income for CRA for tax purpose?
1. I just need some clarification around mailing back health card, calling CRA for departure.
2. Also when is departure tax due, would this be immediate or during the normal tax period say 2019 departure will be April of 2020?
3. I also read on CRA website, when you are non-resident, you dont have to close your TFSA etc but you cant contribute thereafter, so whats the implication of departure tax filling on RESP, RSP, TFSA among others.
4. Finally, I talked to my bank one time and they said as a non resident of Canada, you can keep your bank accounts among others but yet people here still refer that bank accounts need to be closed once you are non resident.

Reason for my question is to find out if there is anything required of me now or wait till my 2019 tax return filling.
Note- I have LLP balance and I have decided not to pay back during my departure year but will add to the balance (income for the departure year) as against paying the balance back i.e. pay taxes on the money rather than pay the amount back to the LLP.


thank you

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