Cross Border Financial Planner or Accountant or?

[paulsinbc]

Just discovered this forum and glad I did.  Thanks for having me. 

I'm a dual citizen residing in BC with my Canadian wife.  95 percent of my retirement is in the US (IRAs, pension and a small amount in Roth).  I am semi-retired, my wife is working, and we keep our finances mostly separate.  So far I have been doing my taxes with H and R in Canada and Turbo Tax in the US since my situation is pretty simple and so far no problems.  I am a long way off from having to make RMDs. 

Recently I have been considering a cross border accountant and/or a financial planner but have sticker shock from some of the quotes from accountants and the financial planners require that I transfer all my assets on both sides of the border to them to manage and that scares me a little.  Actually, it scares me a lot.   I would gladly pay a cross border accountant but I don't think they would be doing anything different.  i found a cross border advisor but they want $500 for a one-hour consult.  If I really need to do either of the above I would but just don't know if I need to at this time. 

That's it in a nutshell.  I try and do everything above board (FBAR, no TFSAs, etc...) but wonder if I am missing something. 

Anyone in a similar situation?  If a cross border specialist of some kind needs to be involved, who do you recommend? 

Thank You,

[elaine amj]

We pay a cross border accountant because I couldn’t really understand some of the complexities of US accounting (I did read it but it quickly turned to mumbo jumbo). It costs us about $600-700 every return for both Canadian and Us taxes for DH and I. We pay $0 US taxes. Before I used to do all our own taxes, even when we had business taxes. But I found the cross border stuff pretty confusing.

As for investments, we manage our US investments in the US and manage our Canadian in Canada. Didn’t see a point in transferring it to one country. We live in Canada and it’s nice to have US dollars especially since we shop and travel there a lot.

US credit cards are also way more lucrative for travel hacking so our daily credit card is actually a US card with no foreign transaction fee. So a chunk of our daily spend in Canada is paid for with our US dollars.

One other nice thing about having savings in both currencies is we almost never worry about currency exchange rates. Especially since the bulk of our US stash was earned when the exchange was 1:1. (I think that is a mental thing though lol).

One way to handle investments is to use VTI in the US and then in Canada, a chunk of investments are in a fund that excludes North America. I don’t keep a perfect balance though. Or I could quickly spiral into letting perfect be the enemy of good.

It might not be a bad idea to have a for-fee cross border financial advisor advise you on the best strategies for your investment plan.


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[FLBiker]

We're in a similar boat -- US citizens and Canadian permanent residents.  We moved July 2020, and have paid a crossborder tax specialist for these first two years.  In the next year or two, though, I think I'm going to try going back to doing our taxes ourselves.

In terms of financial planning, so far, I haven't hired anyone.  I've toyed with the idea a few times, and had some free introductory meetings, but I've come away from them feeling like I know what I need to know.  That said, I've done a LOT of reading on this stuff, and I really kind of enjoy it.  And I don't think $500 for an hour meeting is crazy for a crossborder financial planner.  That said, I've found that my crossborder tax accountant is really the person I have questions for, and he doesn't cost as much as a CFP.  I may ultimately engage a CFP (perhaps to confirm that we're ready to retire) but I feel like I have a good handle on stuff.

Two planners that I liked in my initial consult (but I've never engaged them) are: https://objectivefinancialpartners.com/ and https://springplans.ca/

In terms of things to be aware of that you didn't mention:
1) Roth IRAs are recognized in Canada and withdrawals will be tax free as long as you declare them to the CRA during your first tax filing AND don't contribute to them post-arrival in Canada.
2) To avoid PFICs, only hold US-domiciled funds outside of registered accounts in Canada.  We do this by having our non-registered account in Canada in USD, but you could also do it in CAD by investing in individual stocks.

We also left most of our US stuff in the US, with the exception of our taxable / non-registered account as no brokerage really wanted to keep that, so we moved it from Vanguard to Questrade (transfer in kind, keeping it in USD).  It took some time to go through, but it was simple.

I've also started a website where I'm compiling crossborder finance info as I learn it and I've got some other resources there: https://chopwoodcarryfire.com/

[paulsinbc]

Thank you for the responses. 

elaine amj:
$600-$700 taxes for both the US and Canada is a bargain especially if you are using a cross border accountant.  I was quoted $2000 CAD for both countries and about $1500 CAD just for the US plus another $500 for consulting.  Another firm in WA State starts at $2500 USD just for doing US Taxes that have a Canadian or foreign component.  I have since learned the former is reasonable but the $2500 is pricey.  Is your accountant taking on new clients:)?

And possibly a dumb question but does VTI refer to the Vanguard ETF?

FLBiker:
Thanks for links for the advisors and for creating your website.  I will dive into those after I am done typing here. 
Have you ever look at MCA Cross Border Advisors?   They are on RBC's list of recommended Cross Border Advisors and the one I have been considering contacting but again, I will look at the two you recommended.  I will at least contact an advisor this year. 

I have a small amount in a Roth IRA (about $16k) but didn't realize I was supposed to declare it and that is something I need to investigate.  Should I be worried?  Fortunately, I haven't added to it. 
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I recently transferred all of my IRAs from Vanguard to Charles Schwab based on a friend's recommendation since Schwab allows Canadian residents to move things to ETFs.  With Vanguard I couldn't transact at all.  It's nice having some form of control again.  Keeping my IRA in the US makes the most sense and self-managing at least for now. 

Thank you both again.  This is all extremely helpful. 

[FLBiker]

@paulsinbc - I think you're OK with the Roth IRA, as long as you haven't contributed to it post-moving, but it would probably be better to file your election with the CRA sooner than later.  You can find more info on that here: https://philhogan.com/roth-ira/

[elaine amj]

I’m in a small city in Ontario - and $600-800 is about the going rate for cross border taxes here. Can accountants even handle cross province taxes?


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[Rockies]

I use HR Block (if you call around they should have a few accountants that specialize in USA/Canada taxes located in Canada). They charge me 700-900$ for my filing depending on the year. I previously used BDO and they started out charging me $2000/year and I finally had enough when they quoted me $3200 for a single year of tax filing, ouch!

I've always intended on figuring out how to file on my own, but I feel like each year some new situation comes up I am not able to fully understand, so I just bite the bullet and shell out the money.  USA tax filing from abroad is quite complicated and as far as I understand it, it is fully based on recent court judgements, so it is not the easiest thing to deal with.