Author Topic: Canadian expat in US needs Mustachian assistance  (Read 1254 times)

trezzinator

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Canadian expat in US needs Mustachian assistance
« on: July 29, 2014, 08:50:28 PM »
Hi everyone,
So, I'm a Canadian who moved to the US for school and just married an American and will be getting my green card soon.
I have maxed out RSPs and TFSA, and a very nice rental property in Canada that I just sold.

What do I need to consider, especially tax-wise, now that I'm about to become a permanent resident? I've been told it can get pretty complicated to have investments on both sides of the border... I've even read some blogs suggesting I close out my Canadian tax-sheltered accounts.

I'm also curious what the best thing to do is with my big ol' lump sum from the sale of my property. I'd like to invest it until I'm ready to buy again (which won't be for a few years; my industry is pretty volatile) but would obviously like to minimize taxes on my sweet sweet Canadian nest egg.

Thanks in advance... oh, and I'm a relatively recent convert to Mustachianism, so I'd appreciate everything as layman-terms as possible :)

pksr

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Re: Canadian expat in US needs Mustachian assistance
« Reply #1 on: July 31, 2014, 02:42:03 PM »
I did want to flag one of the new requirements you're going to have: the Report of Foreign Bank and Financial Accounts (FBAR). You can be subject to massive penalties if you don't file it (if you married this year I think you'll have til June 2015 for your first). Welcome to the USA!

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR

In general you should receive a tax credit in the U.S. for any tax paid in Canada. But since the U.S. government in its wisdom is going to tax all your earnings / accounts you own in the universe, it would indeed simplify your life to close any taxable Canadian accounts. But I don't believe it's necessary as long as you stay on top of the filing and tax requirements.

As for closing your Canadian tax-sheltered accounts: you'd need to list them on the FBAR (we're just trying to smoke out you Canadian master criminals / money launderers), but I don't believe they'd be income for U.S. IRS purposes (please confirm that with a tax expert, though).