Author Topic: Can"EH"dian Tax - You have questions, I have answers  (Read 106118 times)

Retire-Canada

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #650 on: January 14, 2017, 06:41:34 PM »
Our big question to figure out is if we can claim our moving expenses. We quit our jobs and moved and found higher paying ones once here (3 months off between jobs). So we didn't move for jobs but our jobs improved because of the move if that makes any difference.

If you know what can you claim? Movers? Reasonable travel expenses? (We did a trip for 2.5 weeks and would be able to find some hotel receipts and credit card bills) house commissions? Without counting our trip we'd be close to $25k

Here is a link to the relevant CRA info: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/219/menu-eng.html

TOgirl

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #651 on: January 17, 2017, 10:15:59 AM »
This might be a silly question, but....

I used to do our taxes on my own, without issue, using TurboTax or an equivalent.

My husband now has a job where he is issued a T2200 for work from home expenses, etc. Since he has had this job, I thought I needed to get an accountant to do our taxes to ensure we were using the deductions properly.

My question is - would this type of employment deductions be easily dealt with on my own using the tax software? I want it done accurately, however when the accountant has increased his rates for the past few years, it makes me wonder if it's worth going to him anymore. It will cost approx $200 for him to do it, or $30 for software.

Thank you for any advice.

daverobev

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #652 on: January 17, 2017, 10:26:40 AM »
This might be a silly question, but....

I used to do our taxes on my own, without issue, using TurboTax or an equivalent.

My husband now has a job where he is issued a T2200 for work from home expenses, etc. Since he has had this job, I thought I needed to get an accountant to do our taxes to ensure we were using the deductions properly.

My question is - would this type of employment deductions be easily dealt with on my own using the tax software? I want it done accurately, however when the accountant has increased his rates for the past few years, it makes me wonder if it's worth going to him anymore. It will cost approx $200 for him to do it, or $30 for software.

Thank you for any advice.

simpletax.ca

I'd be surprised if what I assume is a straightforward form wasn't there. As it's free, there's no issue checking to see!
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Koogie

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #653 on: January 17, 2017, 10:29:47 AM »
This might be a silly question, but....
I used to do our taxes on my own, without issue, using TurboTax or an equivalent.
My husband now has a job where he is issued a T2200 for work from home expenses, etc. Since he has had this job, I thought I needed to get an accountant to do our taxes to ensure we were using the deductions properly.
My question is - would this type of employment deductions be easily dealt with on my own using the tax software? I want it done accurately, however when the accountant has increased his rates for the past few years, it makes me wonder if it's worth going to him anymore. It will cost approx $200 for him to do it, or $30 for software.
Thank you for any advice.

simpletax.ca

I'd be surprised if what I assume is a straightforward form wasn't there. As it's free, there's no issue checking to see!

And you can double check the results with other free tax softwares.  Studio Tax, Taxfreeway, etc..
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Prairie Stash

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #654 on: January 19, 2017, 11:30:58 AM »
This might be a silly question, but....

I used to do our taxes on my own, without issue, using TurboTax or an equivalent.

My husband now has a job where he is issued a T2200 for work from home expenses, etc. Since he has had this job, I thought I needed to get an accountant to do our taxes to ensure we were using the deductions properly.

My question is - would this type of employment deductions be easily dealt with on my own using the tax software? I want it done accurately, however when the accountant has increased his rates for the past few years, it makes me wonder if it's worth going to him anymore. It will cost approx $200 for him to do it, or $30 for software.

Thank you for any advice.
Simpletax and do the 2015 taxes in it. When you get the same results you can confidently do 2016 taxes.

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TOgirl

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #655 on: January 23, 2017, 08:20:34 AM »
Thank you for the replies, I will try it out using the 2015 and compare.

Heckler

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #656 on: January 30, 2017, 07:52:54 AM »
Is a UK ISA account owned by a Canadian (former UK) Resident considered a Taxable investment account?  Are income and capital gains taxes due annually to CRA?
« Last Edit: January 30, 2017, 07:54:54 AM by Heckler »

Heckler

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #657 on: February 01, 2017, 07:41:46 AM »
That's a tough one, isn't it?

daverobev

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #658 on: February 01, 2017, 10:05:14 AM »
That's a tough one, isn't it?

I'd call them (CRA). I did try to search but found no info. If it's not in the tax treaty, you're out of luck.
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Koogie

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #659 on: February 04, 2017, 08:35:17 AM »
That's a tough one, isn't it?

You might find this thread on Canadian Money Forum helpful.  It is from a Canadian moving to the UK, so sort of backwards, but he and the posters address a lot of CA/UK tax issues.      http://canadianmoneyforum.com/showthread.php/65170-Canadian-Moving-to-UK/page3

He seems to indicate that the UK does not recognize the TFSA as a tax free vehicle (much like the US)    Likely the reverse is true with an ISA....       you might even ask him.

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Heckler

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #660 on: February 04, 2017, 07:25:43 PM »
Thanks for the link Koogie.  I've passed it on to the stranger who asked in another thread of mine.

Love the hive mind!

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #661 on: March 05, 2017, 05:56:02 PM »
Is there a simple formula or rule of thumb to help me figure out whether it's worth claiming medical expenses this year? We have a very unusual, for us, year tax wise with both very high household income and higher than normal medical expenses.

Going forward, we may have more eligible expense, but lower income so I'm interested in this from that angle too.

Gathering the million and one medical receipts and insurance statements from 2016 (some were covered and I think CRA will request proof that the claimed expenses weren't eligible for reimbursement) will be a PITA if it ends up not reducing our tax bill.

Heckler

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #662 on: March 06, 2017, 07:09:28 AM »
Re: medical exp, my spproach would be

0, start a manila envelope to collect 2017 reciepts.  Now.
1, am I eligible to claim?
2, if yes, what is my estimated expense claim - ballpark, from Mint or credit cards reciepts
3, put that number into tax software and compare refund claiming vs not
4, if its "worth it" to you, dig for all your 2016 reciepts

jambongris

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #663 on: March 06, 2017, 11:26:39 AM »
CPA CB,

I have a question about child care expense deductions. The deduction limit is currently sitting at $8000 dollars per child. If I have two children under the age of 6 can I only claim $8k per child or are the deductions transferrable between children. For example, if we incur expenses of $10,000 for one child and $6000 for the other can we still claim the full $16,000? Form T778 seems to imply that you can based on the way the calculations are presented and I couldn't find anything in the instructions that clarified the situation one way or another.

Thanks.

Hi Jam,

It's $8,000 per child, but not 'globally' $16,000.

That being said, many expenses can realistically be split between children in a way that would maximize the utilizable value for you. I wouldn't call this 'by the book' (at least not in CRA's eyes) but I think it's a reasonable interpretation of the Income Tax Act (if your assumptions in split are reasonable).

Cheers

CPA CB

Just to follow up on this question from last year. I was preparing my taxes last night using the online version of TurboTax and the $8000 child care deduction does appear to be transferable between children based on what I saw.

I have two children in daycare at the moment and the younger just started at the end of 2016 so our daycare expenses for 2016 were approximately:

Child 1: $20,000
Child 2: $1,000

I entered that information into TurboTax, making sure to apportion the correct amounts to each child as indicated above, and TurboTax then showed a deduction of $16,000 for me (as opposed to $9,000 if there was no transferability of the deduction between children).

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #664 on: March 07, 2017, 05:02:05 PM »
Jambongris - taxtips runs through the example. They have a case example like yours.

http://www.taxtips.ca/filing/childcarecosts.htm

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f3/s1-f3-c1-eng.html#N1068E
The CRA website.

Follow the table and you will see the $16,000 is correct. You paid 21,000, max allowed is $16,000, therefore you can clam 16,000. CRA allows a total max, not an individual comparison for each child. Its a global, family amount, not an individual amount listed on the CRA forms.

jambongris

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #665 on: March 07, 2017, 06:41:43 PM »
Jambongris - taxtips runs through the example. They have a case example like yours.

http://www.taxtips.ca/filing/childcarecosts.htm

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f3/s1-f3-c1-eng.html#N1068E
The CRA website.

Follow the table and you will see the $16,000 is correct. You paid 21,000, max allowed is $16,000, therefore you can clam 16,000. CRA allows a total max, not an individual comparison for each child. Its a global, family amount, not an individual amount listed on the CRA forms.

That Tax Tips website provides a nice summary. I clearly need to work on my google-fu as I was unable to find it on my own.

I was pretty sure I was correct based on the wording of CRA form T778 but I interpreted CPA CB's response as saying that I was wrong. It was a nice surprise when I saw the numbers in TurboTax and your further confirmation is the cherry on top. Obviously this has a significant effect on our taxes going forward.

WinterSkies

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #666 on: March 13, 2017, 09:43:48 AM »
I have a question regarding RRSP deductions that I'm looking for help with.  I have 12.3k in unused deductions from previous years, and about another $8500 that I will have contributed this year.  I have not used my full deductions for the past several years (since 2013 tax year) due to two maternity/parental leaves that crossed tax years and left me with a significantly lower income than a full working year. I used just enough of my deductions to ensure I was under the approx. $45k boundary for federal tax brackets and to pay off my HBP amount owing ($323 per year). I carried the rest of the deductions forward as I knew that in 2016, I would be back to fully salary for an entire tax year.

This year, my income is about $75k.  When I use my RRSP deductions to lower my income, I become the lower income spouse, meaning that I claim both the final 6 months of UCCB income (2k), and also our 2016 child care expenses (12.3k).  I do not actually need to use all of the RRSP deductions available - using about 19k gets me down under the $45k boundary.  What I am wondering, and hoping for feedback on, is whether this is the best approach.  Is there any reason not to do this? Is there a better way to use these deductions that I haven't considered?  Unless I change jobs or get a big raise (unlikely in both cases right now), I am not going to be approaching the next tax bracket for at least 5 years or so.  My thoughts are get the money back from the government now, and invest it back into our RRSPs/house (fence, landscaping - we built on a bare lot) rather than let that money languish with the government for 5 more years.  If we go this route, our return will be in the region of 8.8k, which is a massive amount of money that could be working for us.
 
I would really appreciate any feedback you all have on this approach.  My husband is semi-mustachian, but is much less interested in the small details.  He just wants to get the big refund and be done with it.  I want to make sure we get as much back as we can.  Thank you!

daverobev

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #667 on: March 13, 2017, 11:16:08 AM »
I have a question regarding RRSP deductions that I'm looking for help with.  I have 12.3k in unused deductions from previous years, and about another $8500 that I will have contributed this year.  I have not used my full deductions for the past several years (since 2013 tax year) due to two maternity/parental leaves that crossed tax years and left me with a significantly lower income than a full working year. I used just enough of my deductions to ensure I was under the approx. $45k boundary for federal tax brackets and to pay off my HBP amount owing ($323 per year). I carried the rest of the deductions forward as I knew that in 2016, I would be back to fully salary for an entire tax year.

This year, my income is about $75k.  When I use my RRSP deductions to lower my income, I become the lower income spouse, meaning that I claim both the final 6 months of UCCB income (2k), and also our 2016 child care expenses (12.3k).  I do not actually need to use all of the RRSP deductions available - using about 19k gets me down under the $45k boundary.  What I am wondering, and hoping for feedback on, is whether this is the best approach.  Is there any reason not to do this? Is there a better way to use these deductions that I haven't considered?  Unless I change jobs or get a big raise (unlikely in both cases right now), I am not going to be approaching the next tax bracket for at least 5 years or so.  My thoughts are get the money back from the government now, and invest it back into our RRSPs/house (fence, landscaping - we built on a bare lot) rather than let that money languish with the government for 5 more years.  If we go this route, our return will be in the region of 8.8k, which is a massive amount of money that could be working for us.
 
I would really appreciate any feedback you all have on this approach.  My husband is semi-mustachian, but is much less interested in the small details.  He just wants to get the big refund and be done with it.  I want to make sure we get as much back as we can.  Thank you!

1. Is your TFSA (both of them) full?

2. RRSP = tax deferral. You are only 'losing' on the growth of the stuff you don't have invested. At 30% tax rate, on say $10k of contributions, that's $3k; but it's the *growth* of that $3k that is relevant. IE, it's not as big a deal as you think - vs investing unregistered, and saving using the RRSP room til you're earning more (if you think that IS likely).

3. More RRSP contribs = lower net income = greater CTB.

If you're not expecting a significant raise for a while I'd probably just catch up with the room gradually. I mean, it depends on your needs in retirement vs how much you already have inside, too - no point putting so much in that you'll struggle to get it out/get OAS clawed back/end up losing vs just doing it unreg.
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Prairie Stash

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #668 on: March 13, 2017, 11:49:59 AM »
I have a question regarding RRSP deductions that I'm looking for help with.  I have 12.3k in unused deductions from previous years, and about another $8500 that I will have contributed this year.  I have not used my full deductions for the past several years (since 2013 tax year) due to two maternity/parental leaves that crossed tax years and left me with a significantly lower income than a full working year. I used just enough of my deductions to ensure I was under the approx. $45k boundary for federal tax brackets and to pay off my HBP amount owing ($323 per year). I carried the rest of the deductions forward as I knew that in 2016, I would be back to fully salary for an entire tax year.

This year, my income is about $75k.  When I use my RRSP deductions to lower my income, I become the lower income spouse, meaning that I claim both the final 6 months of UCCB income (2k), and also our 2016 child care expenses (12.3k).  I do not actually need to use all of the RRSP deductions available - using about 19k gets me down under the $45k boundary.  What I am wondering, and hoping for feedback on, is whether this is the best approach.  Is there any reason not to do this? Is there a better way to use these deductions that I haven't considered?  Unless I change jobs or get a big raise (unlikely in both cases right now), I am not going to be approaching the next tax bracket for at least 5 years or so.  My thoughts are get the money back from the government now, and invest it back into our RRSPs/house (fence, landscaping - we built on a bare lot) rather than let that money languish with the government for 5 more years.  If we go this route, our return will be in the region of 8.8k, which is a massive amount of money that could be working for us.
 
I would really appreciate any feedback you all have on this approach.  My husband is semi-mustachian, but is much less interested in the small details.  He just wants to get the big refund and be done with it.  I want to make sure we get as much back as we can.  Thank you!
I'll expand on a secret, there's another tax bracket that isn't listed. At $65,000 for the combined household income there's additional deductions on the CCB. In my case I have 2 kids under 6, for RRSP contributions I get an additional 5.7%, paid out on the CCB cheques. It might not be called a tax deduction, but having extra money come in for additional RRSP contributions sure feels like it.

You're pondering getting 27.75% now or 33.25% in 5 years. If you take the return now, invest it all, can your investment make up the difference? if its $10K you would get $2775 now, can it grow to $3,325 in 5 years? that's some pretty low returns, I sure hope so. 

I agree with daverobev, TFSA should also be full. If they're not take the refund and slide it into the TFSA.

yyc-phil

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #669 on: March 14, 2017, 09:44:09 PM »
Where will my principal place of residence be in 2017, for tax purposes?

Seems like an easy question but I am having a hard time finding the correct answer.

For the past 4 years, I have been working full-time and residing in the NWT on a permanent basis. Last year, after my job was unexpectedly downgraded to part-time, I negotiated a remote work arrangement with my employer that allows me to work wherever I want, whenever I want. Under this arrangement, I can chose to work in Yellowknife, or in Japan or Mexico if I want as long as I am physically present in Yellowknife twice a year for a week-long board meetings. DW and I took this as a great opportunity to travel and decided to go on a long and slow road trip to Mexico for the winter. We just came back a few weeks ago: DW is in Calgary and lives in a condo I own, I am now back in Yellowknife to work here until the fall. My plan is to spend a little over 6 months in Yellowknife, a couple of weeks in Calgary, and the rest of the year outside Canada. Wash, rinse, repeat.

Here in Yellowknife, I do not own or rent a dwelling. To reduce my expenses to the minimum, I will be house-sitting as I did in the past 4 years, and will likely camp when it gets warmer. I will not spend any time in Calgary except perhaps a week or so at the end of September to pick DW, pack our stuff in the SUV, lock the condo, and leave the country for the winter, with the plan of returning to Yellowknife in May 2018. Wash, rinse, repeat.

On December 31, 2017, I will not be in the NWT, but I will have spent over 6 consecutive months in that jurisdiction, and at most two weeks in Alberta. Under which jurisdiction will I file my 2017 taxes?

Thanks in advance for shedding some light on my situation.
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #670 on: March 14, 2017, 10:37:23 PM »
Where will my principal place of residence be in 2017, for tax purposes?

Seems like an easy question but I am having a hard time finding the correct answer.

For the past 4 years, I have been working full-time and residing in the NWT on a permanent basis. Last year, after my job was unexpectedly downgraded to part-time, I negotiated a remote work arrangement with my employer that allows me to work wherever I want, whenever I want. Under this arrangement, I can chose to work in Yellowknife, or in Japan or Mexico if I want as long as I am physically present in Yellowknife twice a year for a week-long board meetings. DW and I took this as a great opportunity to travel and decided to go on a long and slow road trip to Mexico for the winter. We just came back a few weeks ago: DW is in Calgary and lives in a condo I own, I am now back in Yellowknife to work here until the fall. My plan is to spend a little over 6 months in Yellowknife, a couple of weeks in Calgary, and the rest of the year outside Canada. Wash, rinse, repeat.

Here in Yellowknife, I do not own or rent a dwelling. To reduce my expenses to the minimum, I will be house-sitting as I did in the past 4 years, and will likely camp when it gets warmer. I will not spend any time in Calgary except perhaps a week or so at the end of September to pick DW, pack our stuff in the SUV, lock the condo, and leave the country for the winter, with the plan of returning to Yellowknife in May 2018. Wash, rinse, repeat.

On December 31, 2017, I will not be in the NWT, but I will have spent over 6 consecutive months in that jurisdiction, and at most two weeks in Alberta. Under which jurisdiction will I file my 2017 taxes?

Thanks in advance for shedding some light on my situation.

Definitely an interesting case. I think that for the 2016 tax year it depends on a few factors. Did your wife live in NWT with you before the Mexico trip? Do you have a NWT address, drivers license, and vehicle registration? If so, these significant and secondary ties would put you there for tax purposes. Otherwise, Alberta would be your province because that is the location of your residence.

For future tax years your province of residence is likely to be Alberta as your wife living there gives you significant ties to that province and you own property there.

Here's the document that deals with this issue. Sections 1.2 throught 1.5, 1.11 through 1.15 are notable. http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #671 on: March 15, 2017, 12:36:50 PM »
Just wanted to pop back in and say thanks to Prairie Stash and daverobev for your feedback.  I am pretty new to all of this and haven't maxed out RRSPs or TFSAs yet, so I appreciate the information you've provided for me to ponder!

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #672 on: March 15, 2017, 02:17:05 PM »
Where will my principal place of residence be in 2017, for tax purposes?

Seems like an easy question but I am having a hard time finding the correct answer.

For the past 4 years, I have been working full-time and residing in the NWT on a permanent basis. Last year, after my job was unexpectedly downgraded to part-time, I negotiated a remote work arrangement with my employer that allows me to work wherever I want, whenever I want. Under this arrangement, I can chose to work in Yellowknife, or in Japan or Mexico if I want as long as I am physically present in Yellowknife twice a year for a week-long board meetings. DW and I took this as a great opportunity to travel and decided to go on a long and slow road trip to Mexico for the winter. We just came back a few weeks ago: DW is in Calgary and lives in a condo I own, I am now back in Yellowknife to work here until the fall. My plan is to spend a little over 6 months in Yellowknife, a couple of weeks in Calgary, and the rest of the year outside Canada. Wash, rinse, repeat.

Here in Yellowknife, I do not own or rent a dwelling. To reduce my expenses to the minimum, I will be house-sitting as I did in the past 4 years, and will likely camp when it gets warmer. I will not spend any time in Calgary except perhaps a week or so at the end of September to pick DW, pack our stuff in the SUV, lock the condo, and leave the country for the winter, with the plan of returning to Yellowknife in May 2018. Wash, rinse, repeat.

On December 31, 2017, I will not be in the NWT, but I will have spent over 6 consecutive months in that jurisdiction, and at most two weeks in Alberta. Under which jurisdiction will I file my 2017 taxes?

Thanks in advance for shedding some light on my situation.

Definitely an interesting case. I think that for the 2016 tax year it depends on a few factors. Did your wife live in NWT with you before the Mexico trip? Do you have a NWT address, drivers license, and vehicle registration? If so, these significant and secondary ties would put you there for tax purposes. Otherwise, Alberta would be your province because that is the location of your residence.

For future tax years your province of residence is likely to be Alberta as your wife living there gives you significant ties to that province and you own property there.

Here's the document that deals with this issue. Sections 1.2 throught 1.5, 1.11 through 1.15 are notable. http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html

Thank you so much for pointing me in the right direction, all of a sudden everything is very clear in my normally-confused mind. Cheers :)
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #673 on: April 19, 2017, 05:31:28 PM »
I accidentally over contributed to DH's RRSP.  This will be for 2017 taxes.  I realized I had probably made an error almost immediately, but now that I have his Notice of Assessment, it is confirmed.

I put the money in about two weeks ago.  I will transfer it out tomorrow.  What additional forms do I need to fill out to submit with 2017 taxes?


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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #674 on: April 20, 2017, 09:42:50 AM »
I accidentally over contributed to DH's RRSP.  This will be for 2017 taxes.  I realized I had probably made an error almost immediately, but now that I have his Notice of Assessment, it is confirmed.

I put the money in about two weeks ago.  I will transfer it out tomorrow.  What additional forms do I need to fill out to submit with 2017 taxes?
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/cntrbtng/xcss-eng.html over contribution penalty form
If you write a letter you can request to have the penalty waived. If they waive anyone, they'll do yours (2 weeks, first time, innocent mistake).

http://www.mnp.ca/en/posts/rrsp-contributions-have-you-over-contributed             easy English article
By withdrawing you get a T4RSP slip, you can file a T746 to make it tax neutral.           
http://www.cra-arc.gc.ca/E/pbg/tf/t746/t746-16e.pdf   link to form

First off, please confirm you were over by more than $2000. Maybe you don't have to do anything? In any event, you'll likely avoid penalty if you withdraw promptly. The punishment is filling in the extra forms...I say that fits your crime ;)

Congrats on maxing out the RRSP early in the year!

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #675 on: April 20, 2017, 09:58:42 AM »
Does anyone have good cdn tax resources for landlords?
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #676 on: April 21, 2017, 09:28:05 AM »
I accidentally over contributed to DH's RRSP.  This will be for 2017 taxes.  I realized I had probably made an error almost immediately, but now that I have his Notice of Assessment, it is confirmed.

I put the money in about two weeks ago.  I will transfer it out tomorrow.  What additional forms do I need to fill out to submit with 2017 taxes?
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/cntrbtng/xcss-eng.html over contribution penalty form
If you write a letter you can request to have the penalty waived. If they waive anyone, they'll do yours (2 weeks, first time, innocent mistake).

http://www.mnp.ca/en/posts/rrsp-contributions-have-you-over-contributed             easy English article
By withdrawing you get a T4RSP slip, you can file a T746 to make it tax neutral.           
http://www.cra-arc.gc.ca/E/pbg/tf/t746/t746-16e.pdf   link to form

First off, please confirm you were over by more than $2000. Maybe you don't have to do anything? In any event, you'll likely avoid penalty if you withdraw promptly. The punishment is filling in the extra forms...I say that fits your crime ;)

Congrats on maxing out the RRSP early in the year!
I definitely over contributed by more than $2,000.  Essentially I somehow got a year ahead of myself.  The bank will not simply transfer the funds.  I sold the ETFs I needed to to free up the cash amount, but now they want me to fill out this form first: http://www.cra-arc.gc.ca/E/pbg/tf/t3012a/t3012a-16e.pdf so they don't have to withhold the taxes.

I hate forms.  This is definitely a fitting punishment.


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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #677 on: April 21, 2017, 09:49:10 AM »
M GF over-contributed to her RRSP one year. It was a pain and cost her a few $$, but she got it sorted and it's enough of hassle you are unlikely to ever do it again. Good luck dealing with the forms.

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #678 on: April 21, 2017, 01:17:03 PM »
Does anyone have good cdn tax resources for landlords?

I have a bunch of info in my head, but no official resources (short of Googling) to recommend. What did you want to know, specifically?

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #679 on: April 21, 2017, 02:08:27 PM »
Does anyone have good cdn tax resources for landlords?

I have a bunch of info in my head, but no official resources (short of Googling) to recommend. What did you want to know, specifically?

A general intro/ guide. The CRA has a lot of stuff, but I'd like some more practical and reader-friendly info.
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #680 on: April 21, 2017, 02:32:00 PM »
Does anyone have good cdn tax resources for landlords?

I have a bunch of info in my head, but no official resources (short of Googling) to recommend. What did you want to know, specifically?

A general intro/ guide. The CRA has a lot of stuff, but I'd like some more practical and reader-friendly info.

Like these?

https://turbotax.intuit.ca/tips/tax-deductions-on-rental-properties-6382

https://turbotax.intuit.ca/tips/dos-and-donts-cca-for-rental-property-explained-6377

http://www.taxplanningguide.ca/tax-planning-guide/section-3-investors/rental-properties/#what-happens-i-sell

I'd be sure to learn as much as possible about the potential future capital gains you may be subject to when you sell the rental. 2016 was the year I learned about how much cap gains can bite and it doesn't seem to be as talked about as all the deductions you can take to offset the rental income.

Just from reading the links above, I have a gut feeling (you'll want to verify with actual math) that you shouldn't claim the CCA, since your taxable income is likely to be low anyway, in favor of reducing the amount of cap gains you'll pay when you sell.

Furthermore, if you end up getting government payments based on having a lower income (disability, OAS, whatever the child payment is called now) the profit generated by selling the rental can wipe those out in the year after the sale (because your income will spike for that year). It's certainly not the end of the world (having more money never is), but it does take some planning from a cash flow perspective.

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #681 on: April 21, 2017, 02:46:30 PM »
Does anyone have good cdn tax resources for landlords?

I have a bunch of info in my head, but no official resources (short of Googling) to recommend. What did you want to know, specifically?

A general intro/ guide. The CRA has a lot of stuff, but I'd like some more practical and reader-friendly info.

Like these?

https://turbotax.intuit.ca/tips/tax-deductions-on-rental-properties-6382

https://turbotax.intuit.ca/tips/dos-and-donts-cca-for-rental-property-explained-6377

http://www.taxplanningguide.ca/tax-planning-guide/section-3-investors/rental-properties/#what-happens-i-sell

I'd be sure to learn as much as possible about the potential future capital gains you may be subject to when you sell the rental. 2016 was the year I learned about how much cap gains can bite and it doesn't seem to be as talked about as all the deductions you can take to offset the rental income.

Just from reading the links above, I have a gut feeling (you'll want to verify with actual math) that you shouldn't claim the CCA, since your taxable income is likely to be low anyway, in favor of reducing the amount of cap gains you'll pay when you sell.

Furthermore, if you end up getting government payments based on having a lower income (disability, OAS, whatever the child payment is called now) the profit generated by selling the rental can wipe those out in the year after the sale (because your income will spike for that year). It's certainly not the end of the world (having more money never is), but it does take some planning from a cash flow perspective.

Those are great and will be bookmarked. Thanks!

The plan is to not sell any real estate until the kids are adults, so I don't get dinged in my child tax. After that it won't be so bad.
I'm keeping reciepts and records and reading whatever I can find, so hopefully it's all not too hard. I'd like a book to have on my shelf, just for the convenient reference. No matter.
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #682 on: April 27, 2017, 10:10:34 AM »
RRSP / Income tax question!

I'm expecting to receive a severance payment amount of roughly $30K pre-tax sometime in mid-2017.  I currently have $18K unused RRSP contribution room. Due to some specifics of the severance, I am unable to directly transfer $18K of this severance into my RRSP account.  Therefore I will receive the $30K severance as cash, taxed at my marginal rate.

Upon receiving the taxed severance amount ($17K-ish), I will be contributing $18K into my RRSP account.  My assumption is that I will have to wait for my 2017 taxes to be completed for a refund in early 2018.

Question #1 Is there any way to adjust my tax rate with CRA, lowering the amount of taxes paid for the remainder of 2017?
Question #2 Will my severance considered "earned income" in the eyes of the CRA for the 2017 tax year in such that I might be entitled to additional RRSP room in 2018?  Eg: 18% of $30K?

Many thanks!

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #683 on: April 27, 2017, 04:59:20 PM »
RRSP / Income tax question!

I'm expecting to receive a severance payment amount of roughly $30K pre-tax sometime in mid-2017.  I currently have $18K unused RRSP contribution room. Due to some specifics of the severance, I am unable to directly transfer $18K of this severance into my RRSP account.  Therefore I will receive the $30K severance as cash, taxed at my marginal rate.

Upon receiving the taxed severance amount ($17K-ish), I will be contributing $18K into my RRSP account.  My assumption is that I will have to wait for my 2017 taxes to be completed for a refund in early 2018.

Question #1 Is there any way to adjust my tax rate with CRA, lowering the amount of taxes paid for the remainder of 2017?
Question #2 Will my severance considered "earned income" in the eyes of the CRA for the 2017 tax year in such that I might be entitled to additional RRSP room in 2018?  Eg: 18% of $30K?

Many thanks!

For question #1 : Yes, there is a form you can fill to reduce remaining taxes. 1 fédéral, 1 provincial. I use it every year to reduce my tax return because I always max out RRSP
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #684 on: April 27, 2017, 05:45:56 PM »
RRSP / Income tax question!

I'm expecting to receive a severance payment amount of roughly $30K pre-tax sometime in mid-2017.  I currently have $18K unused RRSP contribution room. Due to some specifics of the severance, I am unable to directly transfer $18K of this severance into my RRSP account.  Therefore I will receive the $30K severance as cash, taxed at my marginal rate.

Upon receiving the taxed severance amount ($17K-ish), I will be contributing $18K into my RRSP account.  My assumption is that I will have to wait for my 2017 taxes to be completed for a refund in early 2018.

Question #1 Is there any way to adjust my tax rate with CRA, lowering the amount of taxes paid for the remainder of 2017?
Question #2 Will my severance considered "earned income" in the eyes of the CRA for the 2017 tax year in such that I might be entitled to additional RRSP room in 2018?  Eg: 18% of $30K?

Many thanks!

1: yes you can fill out a T1213
2: my understanding is that payments under Line 130 income are not included in the earned income calculation
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #685 on: April 28, 2017, 10:58:32 AM »
RRSP / Income tax question!

I'm expecting to receive a severance payment amount of roughly $30K pre-tax sometime in mid-2017.  I currently have $18K unused RRSP contribution room. Due to some specifics of the severance, I am unable to directly transfer $18K of this severance into my RRSP account.  Therefore I will receive the $30K severance as cash, taxed at my marginal rate.

Upon receiving the taxed severance amount ($17K-ish), I will be contributing $18K into my RRSP account.  My assumption is that I will have to wait for my 2017 taxes to be completed for a refund in early 2018.

Question #1 Is there any way to adjust my tax rate with CRA, lowering the amount of taxes paid for the remainder of 2017?
Question #2 Will my severance considered "earned income" in the eyes of the CRA for the 2017 tax year in such that I might be entitled to additional RRSP room in 2018?  Eg: 18% of $30K?

Many thanks!

1: yes you can fill out a T1213
2: my understanding is that payments under Line 130 income are not included in the earned income calculation

For the T1213, it looks like I have to make the RRSP contribution, then attach proof of the transaction along with the form.  Great news. 

I sort of assumed #2 would be no.  Oh well!

Thanks!

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #686 on: April 28, 2017, 05:32:40 PM »
RRSP / Income tax question!

I'm expecting to receive a severance payment amount of roughly $30K pre-tax sometime in mid-2017.  I currently have $18K unused RRSP contribution room. Due to some specifics of the severance, I am unable to directly transfer $18K of this severance into my RRSP account.  Therefore I will receive the $30K severance as cash, taxed at my marginal rate.

Upon receiving the taxed severance amount ($17K-ish), I will be contributing $18K into my RRSP account.  My assumption is that I will have to wait for my 2017 taxes to be completed for a refund in early 2018.

Question #1 Is there any way to adjust my tax rate with CRA, lowering the amount of taxes paid for the remainder of 2017?
Question #2 Will my severance considered "earned income" in the eyes of the CRA for the 2017 tax year in such that I might be entitled to additional RRSP room in 2018?  Eg: 18% of $30K?

Many thanks!

1: yes you can fill out a T1213
2: my understanding is that payments under Line 130 income are not included in the earned income calculation

For the T1213, it looks like I have to make the RRSP contribution, then attach proof of the transaction along with the form.  Great news. 

I sort of assumed #2 would be no.  Oh well!

Thanks!

I always sent T1213 without anything else. Only write down the ammount I intend to contribute. Never had any problems!
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powersuitrecall

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #687 on: April 29, 2017, 05:45:13 AM »
RRSP / Income tax question!

I'm expecting to receive a severance payment amount of roughly $30K pre-tax sometime in mid-2017.  I currently have $18K unused RRSP contribution room. Due to some specifics of the severance, I am unable to directly transfer $18K of this severance into my RRSP account.  Therefore I will receive the $30K severance as cash, taxed at my marginal rate.

Upon receiving the taxed severance amount ($17K-ish), I will be contributing $18K into my RRSP account.  My assumption is that I will have to wait for my 2017 taxes to be completed for a refund in early 2018.

Question #1 Is there any way to adjust my tax rate with CRA, lowering the amount of taxes paid for the remainder of 2017?
Question #2 Will my severance considered "earned income" in the eyes of the CRA for the 2017 tax year in such that I might be entitled to additional RRSP room in 2018?  Eg: 18% of $30K?

Many thanks!

1: yes you can fill out a T1213
2: my understanding is that payments under Line 130 income are not included in the earned income calculation

For the T1213, it looks like I have to make the RRSP contribution, then attach proof of the transaction along with the form.  Great news. 

I sort of assumed #2 would be no.  Oh well!

Thanks!

I always sent T1213 without anything else. Only write down the ammount I intend to contribute. Never had any problems!

That's cool.  How long did it take after submitting the T1213 before there was a reduction in taxes from your employer?

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #688 on: April 29, 2017, 06:58:54 AM »
RRSP / Income tax question!

I'm expecting to receive a severance payment amount of roughly $30K pre-tax sometime in mid-2017.  I currently have $18K unused RRSP contribution room. Due to some specifics of the severance, I am unable to directly transfer $18K of this severance into my RRSP account.  Therefore I will receive the $30K severance as cash, taxed at my marginal rate.

Upon receiving the taxed severance amount ($17K-ish), I will be contributing $18K into my RRSP account.  My assumption is that I will have to wait for my 2017 taxes to be completed for a refund in early 2018.

Question #1 Is there any way to adjust my tax rate with CRA, lowering the amount of taxes paid for the remainder of 2017?
Question #2 Will my severance considered "earned income" in the eyes of the CRA for the 2017 tax year in such that I might be entitled to additional RRSP room in 2018?  Eg: 18% of $30K?

Many thanks!

1: yes you can fill out a T1213
2: my understanding is that payments under Line 130 income are not included in the earned income calculation

For the T1213, it looks like I have to make the RRSP contribution, then attach proof of the transaction along with the form.  Great news. 

I sort of assumed #2 would be no.  Oh well!

Thanks!

I always sent T1213 without anything else. Only write down the ammount I intend to contribute. Never had any problems!

That's cool.  How long did it take after submitting the T1213 before there was a reduction in taxes from your employer?

About a few weeks, usualy 3-4 you receive a letter to give to the payroll dep.

Because I am in Quebec, I got to fill another form on top of T1213 and this one takes a bit longer to get
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #689 on: May 15, 2017, 07:48:53 PM »
Firstly I wanted to thank CPA CB and all the other knowledgeable tax gurus on this thread for your help with a variety of questions and situations. What an amazing resource!

I have a couple of questions, and I apologize in advance for my limited grasp on Canadian tax as I am a recent arrival to the country. I only just realised I can open tax-sheltered accounts here so I'm oh-so new to TFSAs and RRSPs.

1. My SO has been a high-ish earner for quite a while now, but only starting maxing out his RRSP contributions after he met me and discovered the concept of FI. He has a ton of contribution room from the previous 17 years and I was wondering if he can ever top that up. I'd always assumed it carried over, but I'm finding it hard to track down a definitive answer that yes, you can make a contribution and have it count towards, say, your 2014 contribution room (plus years 2001-2013). Is it just a matter of making a contribution then amending a previous tax return?

2. My SO (geez what a troublemaker) is also anticipating a large pension payout when he leaves his job in a few years. He has to get more details on exactly how it works, but from what I can gather some of it *has* to go towards RRSPs (or maybe even a LIRA, which would make more sense), but a large chunk of it is taken as cash. Is there any way to reduce the tax burden on getting a lump sum payment of about $100K? My thoughts are limit RRSP contributions until then, then dump it all in RRSPs (only works if you can use leftover room from previous years). Or stop work for a year so it's your only income (eg. going back to school). Or leave the country (I'm Australian and it's very likely we would be moving there after he leaves his job so we could make that timing work). Would any/all of those options work?

Much appreciated everyone!

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #690 on: May 15, 2017, 11:59:46 PM »
Firstly I wanted to thank CPA CB and all the other knowledgeable tax gurus on this thread for your help with a variety of questions and situations. What an amazing resource!

I have a couple of questions, and I apologize in advance for my limited grasp on Canadian tax as I am a recent arrival to the country. I only just realised I can open tax-sheltered accounts here so I'm oh-so new to TFSAs and RRSPs.

1. My SO has been a high-ish earner for quite a while now, but only starting maxing out his RRSP contributions after he met me and discovered the concept of FI. He has a ton of contribution room from the previous 17 years and I was wondering if he can ever top that up. I'd always assumed it carried over, but I'm finding it hard to track down a definitive answer that yes, you can make a contribution and have it count towards, say, your 2014 contribution room (plus years 2001-2013). Is it just a matter of making a contribution then amending a previous tax return?

2. My SO (geez what a troublemaker) is also anticipating a large pension payout when he leaves his job in a few years. He has to get more details on exactly how it works, but from what I can gather some of it *has* to go towards RRSPs (or maybe even a LIRA, which would make more sense), but a large chunk of it is taken as cash. Is there any way to reduce the tax burden on getting a lump sum payment of about $100K? My thoughts are limit RRSP contributions until then, then dump it all in RRSPs (only works if you can use leftover room from previous years). Or stop work for a year so it's your only income (eg. going back to school). Or leave the country (I'm Australian and it's very likely we would be moving there after he leaves his job so we could make that timing work). Would any/all of those options work?

Much appreciated everyone!

1. The RRSP room is cumulative. He can see the max cumulative contribution limit for 2017 on his Notice of Assessment or his online CRA account.

2. The only real way to reduce taxes on the "excess portion" is having a lot of RRSP room saved and using the payout to fill the RRSP. Other ways to minimize are retiring in January so you don't have a very high income year, taking out a massive short term investment loan to get interest expense write offs for a year, or deferring the payout (less ideal). Leaving the country generally won't work due to complex rules on tax residency and disposition rules.
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #691 on: June 15, 2017, 02:41:47 PM »
Hi,

Not sure where to post this question, but here goes. I am a Canadian citizen and worked in Canada up until the end of may this year earning approximately 25-30k. I moved to the states in early June on a spousal visa and am able to work under the TN visa if I am able to find a job. I intend to work, but probably not for at least a few months. I closed down my TFSA and merged most of my bank accounts. I pooled all my money into one account. What I want to do is transfer it over here in the USA and invest it in a vanguard brokerage account so I can earn income off of it to float me for a while. What if any are the tax implications? Is it simple to transfer a large amount of money across borders? Are there any downsides to doing this? Thanks for any help!

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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #692 on: June 15, 2017, 06:20:13 PM »
Hi,

Not sure where to post this question, but here goes. I am a Canadian citizen and worked in Canada up until the end of may this year earning approximately 25-30k. I moved to the states in early June on a spousal visa and am able to work under the TN visa if I am able to find a job. I intend to work, but probably not for at least a few months. I closed down my TFSA and merged most of my bank accounts. I pooled all my money into one account. What I want to do is transfer it over here in the USA and invest it in a vanguard brokerage account so I can earn income off of it to float me for a while. What if any are the tax implications? Is it simple to transfer a large amount of money across borders? Are there any downsides to doing this? Thanks for any help!

No tax implication in what you said. Conversion cost about 2-3% usualy...

How much money are you talking about? 5k$? 50k$?

I lately got a Visa from Amazon to pay for my USD expenses (while travelling, online shopping, etc) and then I pay with CAD at no fees, just the convertion rate of the day.

If your plan is to stay in US for many years and need that money, thats one thing. If you plan to stay for few months and work for money (do not need investments) thats something else!

Most big canadian banks (RBC, BMO) give you the opportunity to invest in USD and have branches in US. No need to close your accounts!
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #693 on: June 15, 2017, 08:12:47 PM »
PTF. Lots of good info here.
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Re: Can"EH"dian Tax - You have questions, I have answers
« Reply #694 on: June 21, 2017, 05:44:41 PM »
Hi,

Not sure where to post this question, but here goes. I am a Canadian citizen and worked in Canada up until the end of may this year earning approximately 25-30k. I moved to the states in early June on a spousal visa and am able to work under the TN visa if I am able to find a job. I intend to work, but probably not for at least a few months. I closed down my TFSA and merged most of my bank accounts. I pooled all my money into one account. What I want to do is transfer it over here in the USA and invest it in a vanguard brokerage account so I can earn income off of it to float me for a while. What if any are the tax implications? Is it simple to transfer a large amount of money across borders? Are there any downsides to doing this? Thanks for any help!


No tax implication in what you said. Conversion cost about 2-3% usualy...

How much money are you talking about? 5k$? 50k$?

I lately got a Visa from Amazon to pay for my USD expenses (while travelling, online shopping, etc) and then I pay with CAD at no fees, just the convertion rate of the day.

If your plan is to stay in US for many years and need that money, thats one thing. If you plan to stay for few months and work for money (do not need investments) thats something else!

Most big canadian banks (RBC, BMO) give you the opportunity to invest in USD and have branches in US. No need to close your accounts!

Thanks for the reply. I have about 160k in my lone canadian savings account currently. The plan is to stay a minimum of 1 year and a max of probably 10.It all depends how well we fair down here. Unfortunately none of the Canadian banks have any footprint in Washington State where we are located. All my investments were sold and pooled because this seemed to be the consensus advice to avoid costly tax preparation for the split residency year. I still have no idea how the taxes will play out, and I'm absolutely dreading paying for a cross border accountant to tidy everything up.