Canadian American Tax Accountant: Expertise in Cross-Border Tax Matters
A Canadian American tax accountant offers critical support as Canadians often deal with diverse tax obligations that require both compliance with Canadian law every year, and U.S. tax law. We often have Canadian-American (businesses or individuals) asking us questions on joint tax systems, treaties and reporting obligations; thus, there appears to be complexity around managing taxes on both sides of the border.
Why You Should Hire a Canadian American Tax Accountant
When it comes to cross-border finances, a Canadian American tax accountant offers valuable assistance in:
- Dual Tax Filing Obligations: Both Canada and the U. S. tax systems require their citizens to report income, in some cases even when living abroad so this means dual tax filing obligations.
- Tax Treaty Benefits: The Canada-U.S. Tax Treaties can mitigate the double taxation on certain types of income, to comprehend its provision, it takes a little bit of expertise to understand it properly.
- Retirement and Investment Accounts: Whether it is RRSPs in Canada or IRAs in the U.S., retirement plans tend to have a tax treatment all their own, so it’s another area that needs proper planning.
What Services Does a Canadian American Tax Accountant Provide?
A Canadian American tax accountant provides high-quality professional services to fulfill your cross-border tax needs:
- Filing in Both Countries: Cross-border tax professionals ensure you file properly in both countries and that meets the reporting requirements of each country.
- Foreign Account Reporting: U.S. citizens and residents must report foreign bank accounts above a certain threshold using the IRS FBAR form and Form 8938 for the U.S.
- Tax Treaty Analysis: The U.S. Tax Treaty has a number of provisions to eliminate or minimize double taxation. An accountant with experience will read the treaty and apply the benefits accordingly.
- Retirement Planning: Canadian and U.S. retirement accounts each come with a unique set of tax implications that can require planning to minimize taxes in both countries.
Common Tax Situations Managed by Canadian American Tax Accountants
Cross-border tax accountants are those who focus on your individual situation and needs, such as:
- Living and Working Across Borders: Expats as well as repeaters between Canada and the U.S. face difficulty around income reporting.
- U.S. or Canadian Investments: Cross-border investors will have additional reporting requirements (and taxes) due to their non-residency.
- Property Ownership: Taxes apply to property owned in either country, particularly if it generates rental income.
Why Dimov CPA is Your Best Option for American Canadian Tax Accounting
Dimov CPA specializes in working with Canadians and Americans facing cross-border tax issues:
- Specialist Dual-Filing Services: We offer a coordinated filing service for your Canadian and U.S. tax obligations.
- Retirement Accounts: We know Canadian RRSPs and U.S. IRAs well, advising clients on how to get the most out of their retirement savings, in addition to basics like tax-deferred accounts.
- Comprehensive Understanding of Tax Treaties: Our team takes advantage of the Canada-U. U. Tax Treaty to reduce tax obligations for qualifying clients.
Typical Errors in US – Canada Cross-Border Taxation
- Not reporting worldwide income: Canada and the US both have a requirement to report world-wide income. Overseas income that you fail to report can be a ticket for penalties.
- Failing to Leverage Tax Treaty Benefits: Risk of Double Taxation US-Canada Tax Treaty.
- Under-reporting of foreign accounts when filing FBAR and FATCA: If you misreport a foreign account there will be penalties.
- Mismanagement of Cross-Border Retirement Account: Getting these accounts wrong can lead to unforeseen liabilities.
- Filing Deadlines That Are Missed: Canada and the US each have their own deadlines for filing, which means one party may incur late fees.
- Failing to Properly Report Rental Income: This can cause problems when it comes to compliance and taxation even for the most steadfast property investors.
Our Services
Here are some services on its menu that can help with cross-border tax issues: Dimov CPA
- Preparation and filing of tax returns
- US Immigration Letters: Acquisition of USCIS Required Tax Return Transcripts in Relation to your US immigration-related purpose.
- Help with Canadian tax return to be filed by US expatriates or dual citizens
- Cross-Border Tax Planning
- Tax Treaty Benefits: Using the US-Canada Tax Treaty To Avoid Double Taxation Through Foreign Tax Credits
- Retirement Accounts: Tips on handling RRSPs, RRIFs, 401(k)s and IRAs.
- Taxes for dual citizens — What you need to know about your tax obligations
- FBAR Reporting — Helping you comply with IRS obligations for foreign bank account reporting.
- FINCEN Form 8938: Information in respect of specified foreign financial assets under FATCA.
- Taxing Your Rental Business and Investments
- Cross Border Property: Tax advisory for rental properties held in different jurisdictions
- Capital Gains Tax: Keywords for identifying tax liabilities resulting from the sale of real estate or investments sold in Canada or USA.
- Business Tax Services
- Cross Border Business Advisory: Structuring business activities to comply with tax regimes of both jurisdictions
- According to Canadian internal taxation law, non-residents of Canada who receive certain types of passive income from Canadian-sourced, investments (such as dividends, interest, or rental income) may be subject to withholding tax thereon in the amount prescribed by law (generally 30%, but this rate can be reduced or eliminated by virtue of a tax treaty). The IRS and CRA enforce the statute wherein they collect withholding taxes on behalf of each other.
Contact Us
Get in touch with our team today to get expert assistance on cross-border tax issues. Our cross-border tax experts will work to comply with both Canadian and U.S. tax requirements, but at the same time alleviate burdensome taxes where possible.
FAQs
If I reside in Canada, do I need to pay US taxes?
Yes, all your income is US taxes if you reside in Canada and are a US Citizen or green card holder. The US-Canada Tax Treaty can help mitigate double taxation.
What is FBAR and do I need to file it?
You must file the FBAR (Foreign Bank Account Report) if the total of your foreign accounts is over $10,000 at any time throughout the year.
Am I eligible to claim as a credit on my US tax return the taxes paid in Canada?
Yes, US taxpayers who pay Canadian taxes can reduce their US income tax with a credit.
If I live in Canada, how do I return rental income from a property located in the US?
For Canadian residents receiving US rental income, you will need to prepare a US non-resident tax return and report this income (in Canadian dollars) to the Canada Revenue Agency as well. One option is to rely on the US-Canada Tax Treaty in order to help avoid double taxation.
If I relocate Canada, what happens to the income tax treatment of my 401 (k)?
Your 401(k) remains under the jurisdiction of US tax law after you move to Canada. Moreover, whereas net withdrawals (as opposed to actual losses) may itself be subject to tax in Canada, the provisions of the US-Canada Tax Treaty work to mitigate double taxation.
Is it possible to deduct moving expenses if I move between Canada and the US for work?
Canadian tax law allows you to deduct moving expenses, the same thing applies for the U.S. Armed Forces members. That deduction was removed for most folks by recent U.S. tax changes, however. You should call a cross-border tax accountant for the details.
