I am a dual citizen of the U.S. and Canada. I'm from New York, but as of about a year ago I now live and work in Montreal. I am early in my Mustachian journey and have not yet begun investing yet. I'd like to start putting little bits of savings into index funds but given my tax situation I'm confused as to what the best way to do it is. Should I invest in U.S. funds, pay the U.S. tax on my passive income, and claim credit in Canada, or should I keep all my income and investing in Canada and claim credit on it on the U.S. return? I would have thought the latter sounded simpler, but I briefly talked to a Canadian CPA who told me that given my situation, I should keep all my investing in the U.S. because doing it the other way makes it allegedly a complicated nightmare claiming credit on the U.S. return for foreign passive income, even if I'm not living in the U.S. Is there any truth to this? If I were to do this, does it matter what country the bank account handling the investments would be in? Obviously I'm concerned about losing money on a consistent basis in terms of currency conversion if I have to do that every time I either deposit or withdraw. Although I'm attracted by what seems like more investing options in the U.S. market, so I could go either way depending on which is more logical overall in the long term. I've also heard that it matters what currency the investments are in, so if the investments are through a something like Vanguard Canada but in U.S. currency instead of Canadian currency it's the same maybe as doing it entirely through the U.S. for tax purposes. Lots of contradictory info, not a lot of simple straight forward advice for someone in my position.
I just want to do the right thing personally and legally and not run into problems down the line by starting things out on the wrong path, particularly because I'd ideally like to be able to do the returns myself. What do you think makes the most sense to do?
Thanks in advance for any advice!
