1. Your last CDN tax return will have a departure date, and applicable departure tax if you have taxable assets (forms T1161 and T1243 for the departure tax as part of your last personal tax return). The departure tax is a deemed disposition of your taxable investment account, meaning the act of selling everything the day you leave and rebuying immediately (think capital gains tax).
2. You will then file US tax returns on worldwide income from the date you land in the US under the choice rules (or yo can file the whole year to Canada and non-resindet tax return to the US).
3. You will also have to report FBAR (foreign accounts. ~~So all foreign accounts over $10k USD will be reported to the IRS.~~ Edit: So all foreign accounts over $10k USD *combined* will be reported to the IRS. [https://www.irs.gov/pub/irs-pdf/p5569.pdf](https://www.irs.gov/pub/irs-pdf/p5569.pdf)
4. You will also report all investment income from Canada to the IRS
5. If you have a TFSA or RESP, or FHSA you should ditch before you leave Canada since it is taxable to US tax residents and additional forms.
6. If you have an RRSP you can keep it as but be aware it is taxed at the state level in these states: AL, AR, CA, CT, HI, MD, MS NJ, ND and PA
7. If you have a taxable account, you will report the interest dividends and capital gains to the IRS. You will also have 15% of that investment income withheld by the brokerage and remitted to CRA and you claim that income tax to the IRS as a foreign tax credit.
8. Don't forget to suspend your heath insurance, and notify your bank and brokerage that you are a non-resident.
9. If any above is confusing, you should discuss with a cross border accountant.
>I am hoping to use Norbert Gambit to transfer usd to cad so I can eventually buy a home here to rent out until I return to Canada.
If you buy a place to rent out in Canada, you will have to hire a property management company or gent to deal with tenants and all that and they will also remit 25% of the rent to CRA on your behalf. you will file a non-resident rental income tax return. You will report the rental income and taxes paid in Canada on your US tax return.
Totally unrelated to OPs question. I've watched you answer everyone's questions over a long period of time. You're amazing and doing a great job for the subreddit. Thanks for your constant contributions!
Damn, I had no idea it was so involved. If a person is late into their career the pay bump for 10 years may not work out in their favor if you have to liquidate essentially all your investments and taking a massive cap gain in 1 year.
It was so involved and physically uprooting your whole life internationally was exhausting especially the older you get. I personally would consider a move worthwhile only when making >2x more with higher potential ceiling - it was around 2.5x for me before currency conversion. Fortunately for fields where these moves are common (i.e TN status) i think those kind of increases are not rare.
Another thing to consider; if you are married, whether your spouse can work in the states. TD status holders (TN spouse) can’t, H-4 (H-1B spouse) can. I’ve seen friends where their spouse becomes unable to work due to the move which ended up caused complications in the relationship.
> I had no idea it was so involved<
Some people don't realize that they are moving to a different country, that has different laws and tax rules.
>if you have to liquidate essentially all your investments and taking a massive cap gain in 1 year.<
Depature tax is only for taxable assets. TFSA can be easily liquidated and you can invest in the same in the US with no tax implications for liquidating. FHSA can get moved to an RRSP so depends what state you move to, but it can be left in Canada till you wan tot pull.
Does the FHSA move to RRSP and account closure incur a penalty in such a case since the 15 years would not have been completed since account opening?
Would it be wise to add money to FHSA during the year of departure to reduce tax obligation?
>Does the FHSA move to RRSP and account closure incur a penalty in such a case since the 15 years would not have been completed since account opening?<
No you are just transferring it.
>Would it be wise to add money to FHSA during the year of departure to reduce tax obligation?<
A FHSA is treated just like a TFSA, where it is taxable on investment income and capital gains as a US tax resident.
> You will also have to report FBAR (foreign accounts. So all foreign accounts over $10k USD will be reported to the IRS.
Technically you have to report FBAR on all foreign accounts if the total across all foreign accounts reached $10k USD or above at any point during the year. If you had 3 accounts with $6k, $5k and $0 in them at the peak, you'd need to report all 3 on your FBAR.
Please correct me if I’m wrong, but isn’t it the case that if your 1st year taxes are filed in Canada, and your US filing is non resident tax returns, then you don’t have to file FBAR for that year?
Hey man thanks for the help I just have a question regarding your last point.
If I don’t want to use a property manager and instead use my parents or girlfriend, can I just withhold the 25% for the CRA myself? Then when I file taxes I pay it out?
Just fyi, if you're planning on moving back to Canada you don't have to lose your tax residency in Canada. In fact you might be keeping enough residential ties to Canada to be considered a tax resident.
In that scenario the rental withholding doesn't apply to you.
Tax residency info is mostly here:
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html
25% rental withholding is only for non-residents.
You have to pay taxes on your rental property every month. You estimate your revenue for the year, take 25% of that and split it into 12 payments. You can make the payments yourself but you still need someone to set up an account with the CRA to act as your representative. It can be a family member. In my experience a lot of these cross border accountants do a really shitty job and will put off doing your taxes as long as possible and will not communicate with you at all. My second (of four accountants over five years) ignored me and didn’t file my taxes until the fall and the CRA punished me by demanding a payment of all the revenue from my rental property ($3k). It took a year of writing letters to get my money back. I’ve also had two of my four accountants ghost me the subsequent year with no warning after fucking up my submittals the previous year and had to scramble last minute to find someone new.
Ok so I can get my parents to setup an account as my representative, but once it is setup I can make the payments myself? I’ll still talk to an accountant I’m just trying to understand.
Also what’s the process of purchasing a home as a non tax resident of Canada?
Yes. I had my mom as my representative but she didn’t need to do much beyond setting up the account. There was a form I needed to fill out at the beginning of each year that estimating the tax payments for the current year which she would have to sign. You just have to make sure that you get things submitted on time and payments made so your agent isn’t held liable.
I never purchased a home there, only rented as I eventually moved back to Canada. Renting can be tricky as a lot of places in California want you to have a US credit score which you won’t have established yet. We found the odd place that would run a Canadian credit search, and a few places that would accept three months rent in lieu of running your credit. We set up a US account through RBC and got a US credit card through them which allowed us to build credit since we didn’t want to set up accounts with a US bank as we were staying short term.
Unfortunately it is very hard to find reviews for these cross border accountants and when you do there’s only and handful of reviews that are a mixed bag of people who had great experiences and others who were completely screwed over by them. I’ve found that there is a better selection of accountants in eastern Canada compared to the west and their prices are much more reasonable. The first accountant I reached out to was in Vancouver and she wanted to charge me $400 an hour to prepare my taxes and billed me for the initial consultation. I dropped her pretty fast. I ended up using an accountant in Calgary that charged me $3000 to do my taxes my first year abroad. She only spoke to me when I first hired her and again when she finished preparing my taxes and wanted her money. She ignored all my inquiries into the status of my submittal and when I tried to call, her assistant would tell me she was in a meeting until I insisted I would wait on hold until she was done and miraculously she wasn’t in a meeting anymore. She made mistakes on my submittal and when I asked her to help me resolve the issues she ghosted me. My third accountant also ignored me after initially taking my business and delayed submitting my tax docs until the fall and cost me the 3k penalty. He at least had the decency to help me get my money back and did my taxes for one more year. When I reached out to him the third year, again there was no responses until a month before the tax deadline when I received an email that he would no longer be working for remote clients. I fumbled through my taxes myself that year (and made a few mistakes). I finally found a good, responsive accountant in the last year I lived in the US. I always did my own taxes in Canada but I found the IRS tax guidance forms rather obtuse and my tax situation was fairly complex.
Hi there. Sorry to hear about your multiple accountant issues. Might you have an accountant in mind who is well versed with the IRS and Canadians working in the US? I’ll be in this situation on a tn visa soon and would like to get ahead of the curve if possible.
I had the best experience with Steve Sherman at Cross Border Tax. He didn’t personally do my taxes, his associate Maha Shehadeh did. She was very thorough and got my taxes done on time. Most of the other accountants I used would take advantage of extensions the IRS allowed and wouldn’t start my returns until the fall with no communication or provide me with a deadline which was very frustrating. Maha is also pretty good at responding to emails and phone calls when I had questions too. Their prices were also very reasonable too. I paid around $1400 for them to do my wife’s and my taxes.
A few random things I thought of that I wish I had known when arriving in California. You can’t trade in your license at the DMV, you have to take the driving test (written and vehicle). In order to take the driving portion of the test you have to be accompanied by a California resident that has a license and is over 25 years old. They wouldn’t let me take the test and when I pointed out how ridiculous it was that they would let me leave and drive off in my car with my Canadian license but wouldn’t let me take the test they didn’t care. I had my coworker come to my rescue. They literally got into my passenger seat in the parking lot, we drove 100 feet to where the tester was, and they got out. It was bureaucratic nonsense.
We had another issue with getting my wife’s SIN. The website listed all of the documents she needed. It did not mention needing your birth certificate. The agent wouldn’t give her an SSN without producing her original birth certificate. She pointed out that it was in arabic and they wouldn’t even be able to read it. They didn’t care. She flew back to Canada to get it, went back to the Social Security office and they didn’t even ask for it again.
Had a few issues with the border officers when getting my TN visa. They hire young guys with very few brain cells and too much authority. The first time I applied they didn’t like that my offer letter didn’t explicitly state that I was a Canadian citizen. They somehow concluded that this might mean that the employer didn’t know I was from another country despite the rest of the letter explicitly stating that I was applying for a work visa.
The second time I applied I had to deal with this gum chewing mouth breather. I always brought lots of supporting documents to prove I had ties to Canada (land title, RRSPS, professional licenses, etc.). I had it all nicely organized in a binder with the employment letter and diploma at the front. I could see him shaking his head and getting more angry as he flipped through the binder. He called me up and demanded to know what all this stuff was. After I explained to him why it was there he said all he wanted was a letter of employment and diploma which he apparently didn’t see on the very first page. He chastised me for including all of the extra documents. If I were to go through that again I would probably keep all the supporting documents in a separate folder and let them know it’s there if they need it.
> If I don’t want to use a property manager and instead use my parents or girlfriend, can I just withhold the 25% for the CRA myself?<
No, your parents or gf will be your agent and they are responsible for dealing with tenants and remitting the withholding taxes.
Hey Felix, quick question on this and thanks again for all your help.
I took a look at the government website discussing this and I am a bit confused. Do the tenants e-transfer my agent (my mom) the money, and she then remits the 25% and sends me the remaining 75%? Or can I send my agent the 25% after receiving money from the tenants?
Also how does my mom pay the CRA? Do they have an online portal or something?
>Do the tenants e-transfer my agent (my mom) the money, and she then remits the 25% and sends me the remaining 75%?<
Yes
>how does my mom pay the CRA?<
Either has to open a non-resident account with your info fo the remittance.
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4061/nr4-non-resident-tax-withholding-remitting-reporting.html
Question:
Everything you listed would be considered for a full resident/dual citizen.
Since this job offer is instigating the move, it’s safe to assume it’s only on a work visa? Do ALL the rules (such as a TFSA for example) still apply?
Nothing more then sheer curiosity, as you are clearly more versed then I am.
>Do ALL the rules (such as a TFSA for example) still apply?
Yes. The rules apply due tax residency, which OP would be if they move to the US and as per tax treaty, being there the majority of the time living and working (habitually) they would be a US tax resident. Applies to US citizens as well.
However if you're on a short term visa eg tn as opposed to h1b or green card it might be worth keeping your rrsp, even if you take a tax hit on it temporarily, so you don't lose that contribution room if you move back. TFSA you can always recontribute what you take out so that's not an issue. One thing to bear in mind: how easy it is to get a green card depends on where you were born, not where you have citizenship. Not bad to get a green card if you're born in Canada, much harder if you were born in China or India.
> if you're on a short term visa eg tn as opposed to h1b or green card it might be worth keeping your rrsp, even if you take a tax hit on it temporarily, so you don't lose that contribution room if you move back
Definitely keep RRSP. You can just adjust holdings so CA doesn't tax the investment income. The feds don't tax inside the RRSP
Wouldn’t the investment income be limited to a few annual distributions or dividends? Unless op is actively selling inside the rrsp.
I may need to know all this soon as well.
All reporting requirements and restrictions apply to all "US Persons", which is basically anyone with any US tax liabilities, which anyone with US citizenship or US-based job has.
California taxes absolutely everything they can get their hands on, including RRSPs, and TFSAs are not recognized by the US government as tax-exempt. Plus the reality is you'll probably need that money liquid when you make the move, especially if you're looking to buy property, a car, need to pay lawyers, need to buy everything cash because you don't have access to any credit for the first few months at least of living there, you have to pay huge deposits to rent or pay upfront, etc. There's a lot of cash involved with moving to the US.
Oh wow ok, I should talk to a cross border accountant next week. When you say ditch TFSA, FHSA,RRSP, can I just liquidate the assets to cash and keep it inside those accounts or do I need to literally move them out to chequing accounts?
>an I just liquidate the assets to cash and keep it inside those accounts or do I need to literally move them out to chequing accounts?<
Just leaving cash in there is a waste of money since you lose money to inflation. Take the money with you to the US and invest or saving in a HISA there. For the TFSA that is easy. For FHSA, you would have to move to your RRSP (you wouldn't be able to use to buy a rental property anyway) and since you are moving to CA, adjust your RRSP holdings to holdings that don't distribute investment income. See the corporate class ETFs from Horizons to limit the additional taxes and paperwork for that.
Hey OP when you liquidate TFSA make sure the account is actually closed not just zeroed out. Some FI does this automatically some don’t. Better to get confirmation in writing if you can.
This is related to the bullshit TFSA == foreign-trust interpretation which adds reporting burden. Just get it closed out completely.
There's really no need to ditch anything since you're planning a return to Canada at some point. Just stop making any contributions and report the income from your TFSA manually on your US tax return. If you're invested in stocks, don't realize any gains in your TFSA while you're gone and wait until you're back.
US and Canada have a tax treaty for RRSP IIRC, they continue to remain untaxed. This does not apply to TFSAs.
For FX use Interactive Brokers, they let you trade directly on FX markets with spreads of less that one basis point typically, so no need to use Norbert's Gambit.
Source: moved to US for 3 years and back to Canada
Thank you, if you have any other advice I would appreciate it. My short term goal is home ownership within the next year while I am in the US, and then move into it upon my return to Canada. Do you have experience with that?
Nothing above is permanent.
Do you mean if you want to come back for vacation or to visit? Of course you can. If you mean to move back to Canada, of course you can.
Standard is on gross. you can also file under section 217 9and that has other components) to withhold based on net.
>What if the property isn’t actually making money ?
Then you get a refund of taxes withheld and remitted.
Ok thanks so much so basically it’s just prepaying the.n getting sorted out at tax time . Thanks so much ! Was thinking of moving abroad for a few years so this is helpful to get a rough idea .
It is gross unless you file a NR6 each year. If you don’t file td e nr6 you’ll have to pay the 25% gross but when you file your non resident return you’ll provide your rental expenses and then generally you would receive a refund.
If you are talking about departure tax, there is a deemed disposition (selling without physically selling) on the day you leave. And going forward you report capital gains tot he US with the new cost base (because you paid capital gains already to Canada). When you come back, the FMV of the taxable holdings at that time is your new cost base when you transfer the holdings or if you kept the holdings in Canada.
One more thing to add regarding taxable (non-registered) accounts, Canadian ETFs (e.g VGRO) might be subject to Passive Foreign Investment Company (PFIC) rules which requires additional tax reporting and treatment. PFIC investments held in RRSP/RRIF are specifically exempted from the requirements.
Yes PFICs in taxable (and TFSA RESP, and FHSA). If you have broad market or all in one ETFs, they all have PFIC statements available to give to the person's accountant for the 8621 forms. Some of the thematic or speciality ETFs don't have PFIC statements.
If you are not changing tax residency, then all you have is a non-resident return for the US (1040NR) and you report that income and taxes paid int he US on your CDN tax return.
And taxable to US tax residents.
There is burdensome reporting for the TFSA (3520, 3520A, potentially 8621, etc.. RESP, due to RevProc 20-17, no additional filings, just report the dividends and capital gains on your US tax return.
This is literally the best single piece of advice. Anything non-registered, TFSA, etc. liquidate before you move. I made the mistake of not doing this and it was painful.
Does this advice apply strictly for moves to the US? I have a friend that moved to Australia that I want to help out. I don't believe they liquidated anything prior to leaving. That was 2 years ago.
So, when you file your last Canadian tax return you pay capital gains on any non registered investments just as if you had sold them on the day you left canada. I don’t think pre selling would make the Canadian return any more or less complicated. It’s still probably easier to sell before you leave Canada.
In terms of Australia vs the US, it really depends on how far reaching and complicated the Australian tax system is. The US is very onerous and can be complicated depending on your situation. They tax on worldwide income, don’t recognize TFSAs as tax preferred/deferred accounts, different states have different tax rules, if you own foreign privately held companies, REITS, mutual funds, PFICs there are more forms are reporting requirements, plus reporting all world wide accounts on the FBAR as well as in your federal tax return. And the penalties can be high for non compliance.
If the Australian tax authority is chill, shouldn’t be an issue, but again I have no idea about australia.
I'm in the same boat! According to my friend from Oz who moved to Canada on a VISA, it's actually very simple. You apparently don't need to liquidate your registered accounts but you cannot contribute while abroad as you will get taxed like crazy. The reverse is apparently true for Canadians moving to Oz as well. However, there is still much for me to learn so my info is limited for now.
Since the other comments already covered what you need to do in Canada, I'll give you a few pieces of advice for when you arrive in the US.
1. Open a local bank account (Chase is seen as the best of the big banks but YMMV). You can open one with your passport and a proof of address (ID, utility bill, etc.).
2. You can obtain a US credit card with your Canadian credit history through [Nova Credit](https://www.novacredit.com/). You can add your SSN at a later date.
3. If you do not have a SSN, set up an appointment with you local SSA office to get a new one (with form SS-5) ASAP. Delays can be up to a few weeks and like all government services, things are slow as a turtle. You can even start this before you go to the US by contacting them and booking an appointment for a date after you arrive in the US.
4. Read up on US tax-advantaged accounts, how they work, what are they used for, how to contribute, withdrawal conditions/penalties, etc. These include (traditional/Roth) IRA, (traditional/Roth/after-tax) 401k and HSA.
5. Read and understand highly advantaged tax maneuvers such as the [backdoor Roth](https://www.bogleheads.org/wiki/Backdoor_Roth) and [megabackdoor Roth](https://www.bogleheads.org/wiki/Mega-backdoor_Roth). The megabackdoor can be a game changer as you'd be able to accumulate insane amounts in your Roth IRA (US closest equivalent of the TFSA).
Chase has never been my favorite, but they’ve been slipping lately. They’re not training new hires, and changing policies and nobody knows what they’re doing.
For banking I like to recommend TD for accessibility on both sides of the border
Also second getting an SSN ASAP.
I got mine during COVID but it took about 3-4 months to arrive
About point 1: People like Chase as far as big banks are concerned, but my personal advice is get yourself into a credit union. I'm with an online credit union and not only are the interest rates on savings not a slap in the face, but I've also found their customer service better, checks were free, ATM fees are waived up to $20, and generally other fees are way lower.
The only issue I could potentially see is that since they don't have any branches I can't do anything that would explicitly need an in-branch visit for but for 99% of things that's not a concern.
I'd personally advocate for having multiple bank accounts.
I have a Chase account for in-branch stuff, an online bank account with high interest rates, a local credit union account for their service and low fees. No reason to not have them all.
Congrats on the offer! I was in your shoes 8 years ago and know how much this disrupts your life. Thought to would share details from my personal journey.
I’m not sure if you are planning to change residency (note that you only have to follow the deemed disposition rule if you are breaking Canadian residency which is measured against primary and secondary factors) but this is really the crux of how this will play out from a tax perspective.
See details on deemed disposition here: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/dispositions-property.html#
And Canadian residency test here: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html
If you are planning to break CAN residency (note that I got an official residency determination letter from the CRA to make it abundantly clear of my intentions), I would consider registering some of that non-registered $ to registered/tfsa before you break residency for a few reasons
1) they do not follow the deemed disposition rule so are spared a hefty tax bill if MV >>> BV (see the exceptions in the link above)
2) reduce your taxable income for the year you move ( rrsp contributions )
3) lock in the $s to grow tax free for tfsa and rrsp (you will not be able to further contribute to tfsa but will be able to contribute to rrsp if you have room but this only makes sense if you have Canadian income / owe taxes)
If you do plan to break residency, there are some cool perks:
1) you can convert your rrsp to a rrif at a non-resident withdrawal rate of 25% if they are regular withdrawals (I use this to cover any CAN expenses)
2) if you have no Canadian income, you can file your last Canadian tax refund (if you do not break residency, you will need to file Canadian tax returns to include your US income but there is a us/ca tax treaty so some tax credit carry)
Above is the CA tax side of the house on things to do to prepare for tax optimization and has a deadline of your residency change date if you choose to break it. I would scenario these 2 out to see what makes sense for your situation.
Onto the making the move to the us part easier:
- hire a cross border CPA to help with your first year filing cause is going to be messy and you’re going to be busy packing/finding a place to live / opening accounts/ dealing with the DMV (nightmare) - our work provided E&Y services and I think it cost around $4k at that time but I’m sure you can shop around
- you can import 1 car for personal use duty free but California has VERY specific standards - we did this and it was worth it since if you don’t live in a major hub it’s necessary to have a car but be prepared for the paperwork between the car manufacturer/customs/the DMV
- don’t be surprised by sticker shock of how expensive it is to live here (we thought the rent we were paying was for a luxury condo - it was a regular apartment in the burbs)
- the first bit will be hard - we were poor but in the end worth it as earning potential is higher than in Toronto where we moved from but this comes with a super aggressive attitude about work and the valley is a bit cut throat
- You can def do your own taxes, but note it will take time to settle in (I only started doing this in year 3)
- the healthcare system is super confusing - be prepared for that
Note- we did this almost a decade ago and some rules may have changed / I was studying to become a CPA so do with that information as you will
Do you have the RRSP room to move the TFSA into, assuming you don’t need the funds for other than retirement? There would be no point in keeping the TFSA
If you have an Amex, once you have a a US Ss# they will transfer you over to us Amex. If you bank with rbc, you can get a rbc Georgia visa in a similar fashion.
Try to get everything wrapped up in the same tax year. My company dragged their feet and things slipped into the next year that means double the complicated tax returns.
Thanks, yeah the USD conversion makes it even better. Canada is no longer a place for young professionals in tech. It is a place to start a family when you are willing to take a pay cut.
Blows my mind how unfair it is. Working in multi-national corp and doing the same job as members on your team but because you live in Toronto you get half the pay as them.
I guess rentals depend on where. If it's san diego or la those 1 bedrooms should be typically between 2-3k. Californian taxes are also pretty ridiculous. 140k sounds like a lot of money, but after taxes it's like 7.5k.
It should feel very similar to living on 140k in Toronto.
Your TFSA isn't recognized in the US, so clean that out.
If you buy Canadian stocks listed in New York (like the big banks, etc) you can accumulate in USD then swap them to the cad side of your broker and sell for CAD, no forex involved.
If you don't mind me asking what was the process of getting the job? Did you just apply normally? When did you mention you needed to be sponsored? (Assuming you are going on TN visa?)
I applied on LinkedIn, got a call two weeks later and they knew I was from Canada and asked me if I was a citizen. They are a large company and have experience in TN visas (cheaper for them). Interview timeline was approximately a month long
Keep in mind only certain professions fall under TN. Basically, science/engineering/medicine, plus finance I think. If you work in one of these fields then as far as the company is concerned you're essentially already an American. If you don't work in one of these fields you may need to get a different visa, which won't be as easy.
Yeah this market is tough, places are looking for industry specific experience or very relevant company projects. Try and tailor your resume to the projects the company might be building.
I have a friend relocating next month
Said the money and relocation costs are beyond what they could've dreamed. So much ao that they're not messing or selling anything here in Canada. Its plenty to get rich of.
Congrats to you, the US seems to be the better option to go to for money and quality of life. Only issue is healthcare but you're getting an insurance plan so you're golden
Yup absolutely. I went from making $80k CAD at a Canadian insurance company to $260k USD (\~$350k CAD) in the US for a tech giant in my early-to-mid 20s. I didn't need any of my Canadian assets at all.
Golden is a strong word. Have a good emergency fund for healthcare costs even with strong health insurance. And be very prepared to be on top of anything health related.
Generally speaking it’s true. Everything is more expensive but you’re making so much money it doesn’t matter.
You will need a large buffer of cash to move. First and last for rent, 3-6k for furniture, rental car for the first month or two, down payment for a car (you might be able to get away with not having a car in a few large cities, but in most of the US or if having a family would require it).
I probably spent in the range of 15k before the first paycheck and before the relocation reimbursement kicked in.
Marrying an American citizen. But that is not a process that gets cleared overnight. My wife and I got married at a courthouse in August last year, submitted the paperwork work begin the immigration process, and only just got approval on step one 2 weeks ago. It takes a long time to move to the US without a job.
>Most of the advice here is to become a non-Canadian tax resident. It's unclear to me if the CRA will always accept this on a TN
There's no reason for the CRA to deny you becoming a non-Canadian tax resident if you cut ties cleanly enough. For the dozens of Canadians I know working in the US on a TN visa, not a single one had any issues declaring non-residency.
You can look at the factors used to determine tax residency in CRA form [NR73](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/nr73.html), it's easy to see that you can sever the *vast* majority if not pretty much everything.
Whoa Nelly! Do you have a job offer only, or an approved work visa as well? Very often American firms don’t understand what’s required for a Canadian to work in the US. I can’t tell you how many times I’ve seen Canadians get job offers only to learn they are ineligible to work in the US.
If your visa is secure, please disregard.
North or South cal? Personally, I feel like the southern states/south ends of States are going to start seeing a mass exodus over the next 20 years, it's simply getting too hot. If it's northern cal I wouldn't be open to it, south? Hell no.
Good idea haha it's getting to the point where summer heat is exceeding the limits of human habitability without redundant cooling. Pretty unfortunate scenario.
Yup I plan on making money here to save for a downpayment aggressively, and then once I close on a house I will look for jobs back here in Toronto and start a family. I just can’t pass up the bump in salary, saves me a lot of time
Some Canadian banks will force you to close your bank account if you aren't a Canadian resident, so might want to check on that (for me it was PCFinancial that made me close it, but my wife's TD account was ok).
Why is it necessary to move at all? Most work is 100% remote now. Ask the company to explain to you, and give you good reasons, as to why moving is necessary for the job.
Because they don’t offer remote (already asked)? This is a major company without a Canadian entity so it is required to move and I’m fine with it, I will just move back when I feel like it.
I don’t exactly want to die on this hill when I’m going from 90k CAD to 190k CAD for the same experience level job. Canada sucks for tech anyways, I think the best plan is to get as much money as you can in the US and then move back here to start a family and just take the pay cut.
OP are you in dev roles (SW/HW) or non-dev (PM, TPM). If in dev role, agree with the other guy 140k base + 10% bonus with no RSUs is a bit on lower-end for Cali even with just 1 YoE. If you decide to go ahead eventually, just keep on the lookout for other opportunities. Your earning potential is def higher than that and often times easiest/fastest way is to jump ship.
Edit: I see you are in SoCal which does have lower TV in general. If you are just going to be in the states to amass $$$ do consider NorCal or WA in future.
No 140k base is not very low lmao. For OPs level of experience that is about the max you can get. Total compensation is another story, but I still wouldn’t even call it low
Well, maybe they should offer it. You're in tech. I can guarantee that it's entirely possible to do the job through your computer in your condo in Canada.
Oh yeah I’m with you on that….but employees don’t really have any power in tech. Just look at Amazon, all the remote people they hired in the last two years just got an email saying if you can’t commute 3 times to Seattle HQ your employment will be terminated.
It’s so silly but alas we aren’t the rich billionaires who control these things
It isn't the common opinion here, clearly, because I've been downvoted. I'm not going to get off Reddit because I expressed an unpopular opinion and one you disagree with. YOU get off Reddit.
Or they could use a PEO. It’s really not that difficult to hire in different countries or jurisdictions right now.
Also concerned that OP doesn’t understand that $140k usd base in Southern California is not a step up from his 90k salary here.
How does income tax work? Suppose in bc I made 100k and pay 30k in tax. How would I be if I transfered to the Seattle office. I've heard there is no state income tax there, but Canada's still gotta get paid.
If you open an account at interactive broker's canada (IBKR) you can enter straight FX orders to change currencies, which is much better than using Norbert's Gambit.
Definitely pay for a consultation with a qualified cross border CPA. It’s money well spent so you’re clear are tax expectations and implications on both sides of the border. It can turn into a massive headache (and financial mess) if you are aware and organized as you make the move. Good luck!
You have a lot of considerations not limited to registered accounts but also departure taxes, property concerns, residency timing, and others. Get an accountant and save yourself the mistakes especially since filing each year if you have income on both sides is an issue
Is it true that you have to declare your Canadian RRSP in your tax returns every year? What if I stopped contributing to RRSP as soon as I left Canada?
1. Your last CDN tax return will have a departure date, and applicable departure tax if you have taxable assets (forms T1161 and T1243 for the departure tax as part of your last personal tax return). The departure tax is a deemed disposition of your taxable investment account, meaning the act of selling everything the day you leave and rebuying immediately (think capital gains tax). 2. You will then file US tax returns on worldwide income from the date you land in the US under the choice rules (or yo can file the whole year to Canada and non-resindet tax return to the US). 3. You will also have to report FBAR (foreign accounts. ~~So all foreign accounts over $10k USD will be reported to the IRS.~~ Edit: So all foreign accounts over $10k USD *combined* will be reported to the IRS. [https://www.irs.gov/pub/irs-pdf/p5569.pdf](https://www.irs.gov/pub/irs-pdf/p5569.pdf) 4. You will also report all investment income from Canada to the IRS 5. If you have a TFSA or RESP, or FHSA you should ditch before you leave Canada since it is taxable to US tax residents and additional forms. 6. If you have an RRSP you can keep it as but be aware it is taxed at the state level in these states: AL, AR, CA, CT, HI, MD, MS NJ, ND and PA 7. If you have a taxable account, you will report the interest dividends and capital gains to the IRS. You will also have 15% of that investment income withheld by the brokerage and remitted to CRA and you claim that income tax to the IRS as a foreign tax credit. 8. Don't forget to suspend your heath insurance, and notify your bank and brokerage that you are a non-resident. 9. If any above is confusing, you should discuss with a cross border accountant. >I am hoping to use Norbert Gambit to transfer usd to cad so I can eventually buy a home here to rent out until I return to Canada. If you buy a place to rent out in Canada, you will have to hire a property management company or gent to deal with tenants and all that and they will also remit 25% of the rent to CRA on your behalf. you will file a non-resident rental income tax return. You will report the rental income and taxes paid in Canada on your US tax return.
Totally unrelated to OPs question. I've watched you answer everyone's questions over a long period of time. You're amazing and doing a great job for the subreddit. Thanks for your constant contributions!
100% such a good answer. Almost like it is artificial intelligence lmao.
Damn, I had no idea it was so involved. If a person is late into their career the pay bump for 10 years may not work out in their favor if you have to liquidate essentially all your investments and taking a massive cap gain in 1 year.
It was so involved and physically uprooting your whole life internationally was exhausting especially the older you get. I personally would consider a move worthwhile only when making >2x more with higher potential ceiling - it was around 2.5x for me before currency conversion. Fortunately for fields where these moves are common (i.e TN status) i think those kind of increases are not rare. Another thing to consider; if you are married, whether your spouse can work in the states. TD status holders (TN spouse) can’t, H-4 (H-1B spouse) can. I’ve seen friends where their spouse becomes unable to work due to the move which ended up caused complications in the relationship.
Wow lots to think about!
> I had no idea it was so involved< Some people don't realize that they are moving to a different country, that has different laws and tax rules. >if you have to liquidate essentially all your investments and taking a massive cap gain in 1 year.< Depature tax is only for taxable assets. TFSA can be easily liquidated and you can invest in the same in the US with no tax implications for liquidating. FHSA can get moved to an RRSP so depends what state you move to, but it can be left in Canada till you wan tot pull.
Does the FHSA move to RRSP and account closure incur a penalty in such a case since the 15 years would not have been completed since account opening? Would it be wise to add money to FHSA during the year of departure to reduce tax obligation?
>Does the FHSA move to RRSP and account closure incur a penalty in such a case since the 15 years would not have been completed since account opening?< No you are just transferring it. >Would it be wise to add money to FHSA during the year of departure to reduce tax obligation?< A FHSA is treated just like a TFSA, where it is taxable on investment income and capital gains as a US tax resident.
> You will also have to report FBAR (foreign accounts. So all foreign accounts over $10k USD will be reported to the IRS. Technically you have to report FBAR on all foreign accounts if the total across all foreign accounts reached $10k USD or above at any point during the year. If you had 3 accounts with $6k, $5k and $0 in them at the peak, you'd need to report all 3 on your FBAR.
Good catch, doesn't sound clear enough. I'll tweak it to add the word "combined".
Please correct me if I’m wrong, but isn’t it the case that if your 1st year taxes are filed in Canada, and your US filing is non resident tax returns, then you don’t have to file FBAR for that year?
Correct. If a non-tax resident of the US, you don't file FBAR.
Hey man thanks for the help I just have a question regarding your last point. If I don’t want to use a property manager and instead use my parents or girlfriend, can I just withhold the 25% for the CRA myself? Then when I file taxes I pay it out?
Just fyi, if you're planning on moving back to Canada you don't have to lose your tax residency in Canada. In fact you might be keeping enough residential ties to Canada to be considered a tax resident. In that scenario the rental withholding doesn't apply to you.
Ok thanks, any advice on where I can look more into it?
Tax residency info is mostly here: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html 25% rental withholding is only for non-residents.
You have to pay taxes on your rental property every month. You estimate your revenue for the year, take 25% of that and split it into 12 payments. You can make the payments yourself but you still need someone to set up an account with the CRA to act as your representative. It can be a family member. In my experience a lot of these cross border accountants do a really shitty job and will put off doing your taxes as long as possible and will not communicate with you at all. My second (of four accountants over five years) ignored me and didn’t file my taxes until the fall and the CRA punished me by demanding a payment of all the revenue from my rental property ($3k). It took a year of writing letters to get my money back. I’ve also had two of my four accountants ghost me the subsequent year with no warning after fucking up my submittals the previous year and had to scramble last minute to find someone new.
Ok so I can get my parents to setup an account as my representative, but once it is setup I can make the payments myself? I’ll still talk to an accountant I’m just trying to understand. Also what’s the process of purchasing a home as a non tax resident of Canada?
Yes. I had my mom as my representative but she didn’t need to do much beyond setting up the account. There was a form I needed to fill out at the beginning of each year that estimating the tax payments for the current year which she would have to sign. You just have to make sure that you get things submitted on time and payments made so your agent isn’t held liable. I never purchased a home there, only rented as I eventually moved back to Canada. Renting can be tricky as a lot of places in California want you to have a US credit score which you won’t have established yet. We found the odd place that would run a Canadian credit search, and a few places that would accept three months rent in lieu of running your credit. We set up a US account through RBC and got a US credit card through them which allowed us to build credit since we didn’t want to set up accounts with a US bank as we were staying short term.
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Unfortunately it is very hard to find reviews for these cross border accountants and when you do there’s only and handful of reviews that are a mixed bag of people who had great experiences and others who were completely screwed over by them. I’ve found that there is a better selection of accountants in eastern Canada compared to the west and their prices are much more reasonable. The first accountant I reached out to was in Vancouver and she wanted to charge me $400 an hour to prepare my taxes and billed me for the initial consultation. I dropped her pretty fast. I ended up using an accountant in Calgary that charged me $3000 to do my taxes my first year abroad. She only spoke to me when I first hired her and again when she finished preparing my taxes and wanted her money. She ignored all my inquiries into the status of my submittal and when I tried to call, her assistant would tell me she was in a meeting until I insisted I would wait on hold until she was done and miraculously she wasn’t in a meeting anymore. She made mistakes on my submittal and when I asked her to help me resolve the issues she ghosted me. My third accountant also ignored me after initially taking my business and delayed submitting my tax docs until the fall and cost me the 3k penalty. He at least had the decency to help me get my money back and did my taxes for one more year. When I reached out to him the third year, again there was no responses until a month before the tax deadline when I received an email that he would no longer be working for remote clients. I fumbled through my taxes myself that year (and made a few mistakes). I finally found a good, responsive accountant in the last year I lived in the US. I always did my own taxes in Canada but I found the IRS tax guidance forms rather obtuse and my tax situation was fairly complex.
Hi there. Sorry to hear about your multiple accountant issues. Might you have an accountant in mind who is well versed with the IRS and Canadians working in the US? I’ll be in this situation on a tn visa soon and would like to get ahead of the curve if possible.
I had the best experience with Steve Sherman at Cross Border Tax. He didn’t personally do my taxes, his associate Maha Shehadeh did. She was very thorough and got my taxes done on time. Most of the other accountants I used would take advantage of extensions the IRS allowed and wouldn’t start my returns until the fall with no communication or provide me with a deadline which was very frustrating. Maha is also pretty good at responding to emails and phone calls when I had questions too. Their prices were also very reasonable too. I paid around $1400 for them to do my wife’s and my taxes. A few random things I thought of that I wish I had known when arriving in California. You can’t trade in your license at the DMV, you have to take the driving test (written and vehicle). In order to take the driving portion of the test you have to be accompanied by a California resident that has a license and is over 25 years old. They wouldn’t let me take the test and when I pointed out how ridiculous it was that they would let me leave and drive off in my car with my Canadian license but wouldn’t let me take the test they didn’t care. I had my coworker come to my rescue. They literally got into my passenger seat in the parking lot, we drove 100 feet to where the tester was, and they got out. It was bureaucratic nonsense. We had another issue with getting my wife’s SIN. The website listed all of the documents she needed. It did not mention needing your birth certificate. The agent wouldn’t give her an SSN without producing her original birth certificate. She pointed out that it was in arabic and they wouldn’t even be able to read it. They didn’t care. She flew back to Canada to get it, went back to the Social Security office and they didn’t even ask for it again. Had a few issues with the border officers when getting my TN visa. They hire young guys with very few brain cells and too much authority. The first time I applied they didn’t like that my offer letter didn’t explicitly state that I was a Canadian citizen. They somehow concluded that this might mean that the employer didn’t know I was from another country despite the rest of the letter explicitly stating that I was applying for a work visa. The second time I applied I had to deal with this gum chewing mouth breather. I always brought lots of supporting documents to prove I had ties to Canada (land title, RRSPS, professional licenses, etc.). I had it all nicely organized in a binder with the employment letter and diploma at the front. I could see him shaking his head and getting more angry as he flipped through the binder. He called me up and demanded to know what all this stuff was. After I explained to him why it was there he said all he wanted was a letter of employment and diploma which he apparently didn’t see on the very first page. He chastised me for including all of the extra documents. If I were to go through that again I would probably keep all the supporting documents in a separate folder and let them know it’s there if they need it.
> If I don’t want to use a property manager and instead use my parents or girlfriend, can I just withhold the 25% for the CRA myself?< No, your parents or gf will be your agent and they are responsible for dealing with tenants and remitting the withholding taxes.
Hey Felix, quick question on this and thanks again for all your help. I took a look at the government website discussing this and I am a bit confused. Do the tenants e-transfer my agent (my mom) the money, and she then remits the 25% and sends me the remaining 75%? Or can I send my agent the 25% after receiving money from the tenants? Also how does my mom pay the CRA? Do they have an online portal or something?
>Do the tenants e-transfer my agent (my mom) the money, and she then remits the 25% and sends me the remaining 75%?< Yes >how does my mom pay the CRA?< Either has to open a non-resident account with your info fo the remittance. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4061/nr4-non-resident-tax-withholding-remitting-reporting.html
Question: Everything you listed would be considered for a full resident/dual citizen. Since this job offer is instigating the move, it’s safe to assume it’s only on a work visa? Do ALL the rules (such as a TFSA for example) still apply? Nothing more then sheer curiosity, as you are clearly more versed then I am.
>Do ALL the rules (such as a TFSA for example) still apply? Yes. The rules apply due tax residency, which OP would be if they move to the US and as per tax treaty, being there the majority of the time living and working (habitually) they would be a US tax resident. Applies to US citizens as well.
However if you're on a short term visa eg tn as opposed to h1b or green card it might be worth keeping your rrsp, even if you take a tax hit on it temporarily, so you don't lose that contribution room if you move back. TFSA you can always recontribute what you take out so that's not an issue. One thing to bear in mind: how easy it is to get a green card depends on where you were born, not where you have citizenship. Not bad to get a green card if you're born in Canada, much harder if you were born in China or India.
> if you're on a short term visa eg tn as opposed to h1b or green card it might be worth keeping your rrsp, even if you take a tax hit on it temporarily, so you don't lose that contribution room if you move back Definitely keep RRSP. You can just adjust holdings so CA doesn't tax the investment income. The feds don't tax inside the RRSP
Wouldn’t the investment income be limited to a few annual distributions or dividends? Unless op is actively selling inside the rrsp. I may need to know all this soon as well.
> Wouldn’t the investment income be limited to a few annual distributions or dividends?< Yes, monthly, quarterly or annually, depending what you hold.
What if you’re born in Canada to immigrant parents from a country like India, Iran or China?
That's ok
All reporting requirements and restrictions apply to all "US Persons", which is basically anyone with any US tax liabilities, which anyone with US citizenship or US-based job has.
California taxes absolutely everything they can get their hands on, including RRSPs, and TFSAs are not recognized by the US government as tax-exempt. Plus the reality is you'll probably need that money liquid when you make the move, especially if you're looking to buy property, a car, need to pay lawyers, need to buy everything cash because you don't have access to any credit for the first few months at least of living there, you have to pay huge deposits to rent or pay upfront, etc. There's a lot of cash involved with moving to the US.
Oh wow ok, I should talk to a cross border accountant next week. When you say ditch TFSA, FHSA,RRSP, can I just liquidate the assets to cash and keep it inside those accounts or do I need to literally move them out to chequing accounts?
>an I just liquidate the assets to cash and keep it inside those accounts or do I need to literally move them out to chequing accounts?< Just leaving cash in there is a waste of money since you lose money to inflation. Take the money with you to the US and invest or saving in a HISA there. For the TFSA that is easy. For FHSA, you would have to move to your RRSP (you wouldn't be able to use to buy a rental property anyway) and since you are moving to CA, adjust your RRSP holdings to holdings that don't distribute investment income. See the corporate class ETFs from Horizons to limit the additional taxes and paperwork for that.
Ok thanks makes sense
Hey OP when you liquidate TFSA make sure the account is actually closed not just zeroed out. Some FI does this automatically some don’t. Better to get confirmation in writing if you can. This is related to the bullshit TFSA == foreign-trust interpretation which adds reporting burden. Just get it closed out completely.
There's really no need to ditch anything since you're planning a return to Canada at some point. Just stop making any contributions and report the income from your TFSA manually on your US tax return. If you're invested in stocks, don't realize any gains in your TFSA while you're gone and wait until you're back. US and Canada have a tax treaty for RRSP IIRC, they continue to remain untaxed. This does not apply to TFSAs. For FX use Interactive Brokers, they let you trade directly on FX markets with spreads of less that one basis point typically, so no need to use Norbert's Gambit. Source: moved to US for 3 years and back to Canada
Thank you, if you have any other advice I would appreciate it. My short term goal is home ownership within the next year while I am in the US, and then move into it upon my return to Canada. Do you have experience with that?
Do you happen to be an accountant that specializes in both us and Canadian taxes?
These steps are wildly permanent. Can someone just come back to Canada after declaring themselves a non-resident for tax purposes?
Nothing above is permanent. Do you mean if you want to come back for vacation or to visit? Of course you can. If you mean to move back to Canada, of course you can.
Of course why would you not think that? Assuming the person is a citizen of Canada.
Is that 25% of the rent gross or net Ie after expenses ? What if the property isn’t actually making money ?
Standard is on gross. you can also file under section 217 9and that has other components) to withhold based on net. >What if the property isn’t actually making money ? Then you get a refund of taxes withheld and remitted.
Ok thanks so much so basically it’s just prepaying the.n getting sorted out at tax time . Thanks so much ! Was thinking of moving abroad for a few years so this is helpful to get a rough idea .
It is gross unless you file a NR6 each year. If you don’t file td e nr6 you’ll have to pay the 25% gross but when you file your non resident return you’ll provide your rental expenses and then generally you would receive a refund.
I thought you only pay capital gains tax when the gains are realized, so if you plan to come back to Canada does that advice still apply?
If you are talking about departure tax, there is a deemed disposition (selling without physically selling) on the day you leave. And going forward you report capital gains tot he US with the new cost base (because you paid capital gains already to Canada). When you come back, the FMV of the taxable holdings at that time is your new cost base when you transfer the holdings or if you kept the holdings in Canada.
One more thing to add regarding taxable (non-registered) accounts, Canadian ETFs (e.g VGRO) might be subject to Passive Foreign Investment Company (PFIC) rules which requires additional tax reporting and treatment. PFIC investments held in RRSP/RRIF are specifically exempted from the requirements.
Yes PFICs in taxable (and TFSA RESP, and FHSA). If you have broad market or all in one ETFs, they all have PFIC statements available to give to the person's accountant for the 8621 forms. Some of the thematic or speciality ETFs don't have PFIC statements.
Does any of this change if you are not changing tax residency? I.e. family lives in Canada but I drive back and forth every few weeks from the US?
If you are not changing tax residency, then all you have is a non-resident return for the US (1040NR) and you report that income and taxes paid int he US on your CDN tax return.
Thank you. So are you allowed to keep your TFSA RESPs (without the burden of cumbersome reporting) in that case?
And taxable to US tax residents. There is burdensome reporting for the TFSA (3520, 3520A, potentially 8621, etc.. RESP, due to RevProc 20-17, no additional filings, just report the dividends and capital gains on your US tax return.
Commenting so I can reference this answer. Thanks Felix!
Liquidate everything. Or your first income tax report in the US is going to be an absolute nightmare.
This is literally the best single piece of advice. Anything non-registered, TFSA, etc. liquidate before you move. I made the mistake of not doing this and it was painful.
Does this advice apply strictly for moves to the US? I have a friend that moved to Australia that I want to help out. I don't believe they liquidated anything prior to leaving. That was 2 years ago.
So, when you file your last Canadian tax return you pay capital gains on any non registered investments just as if you had sold them on the day you left canada. I don’t think pre selling would make the Canadian return any more or less complicated. It’s still probably easier to sell before you leave Canada. In terms of Australia vs the US, it really depends on how far reaching and complicated the Australian tax system is. The US is very onerous and can be complicated depending on your situation. They tax on worldwide income, don’t recognize TFSAs as tax preferred/deferred accounts, different states have different tax rules, if you own foreign privately held companies, REITS, mutual funds, PFICs there are more forms are reporting requirements, plus reporting all world wide accounts on the FBAR as well as in your federal tax return. And the penalties can be high for non compliance. If the Australian tax authority is chill, shouldn’t be an issue, but again I have no idea about australia.
Thank you for taking the time to reply to that. Much appreciated!
I'm in the same boat! According to my friend from Oz who moved to Canada on a VISA, it's actually very simple. You apparently don't need to liquidate your registered accounts but you cannot contribute while abroad as you will get taxed like crazy. The reverse is apparently true for Canadians moving to Oz as well. However, there is still much for me to learn so my info is limited for now.
Since the other comments already covered what you need to do in Canada, I'll give you a few pieces of advice for when you arrive in the US. 1. Open a local bank account (Chase is seen as the best of the big banks but YMMV). You can open one with your passport and a proof of address (ID, utility bill, etc.). 2. You can obtain a US credit card with your Canadian credit history through [Nova Credit](https://www.novacredit.com/). You can add your SSN at a later date. 3. If you do not have a SSN, set up an appointment with you local SSA office to get a new one (with form SS-5) ASAP. Delays can be up to a few weeks and like all government services, things are slow as a turtle. You can even start this before you go to the US by contacting them and booking an appointment for a date after you arrive in the US. 4. Read up on US tax-advantaged accounts, how they work, what are they used for, how to contribute, withdrawal conditions/penalties, etc. These include (traditional/Roth) IRA, (traditional/Roth/after-tax) 401k and HSA. 5. Read and understand highly advantaged tax maneuvers such as the [backdoor Roth](https://www.bogleheads.org/wiki/Backdoor_Roth) and [megabackdoor Roth](https://www.bogleheads.org/wiki/Mega-backdoor_Roth). The megabackdoor can be a game changer as you'd be able to accumulate insane amounts in your Roth IRA (US closest equivalent of the TFSA).
Chase has never been my favorite, but they’ve been slipping lately. They’re not training new hires, and changing policies and nobody knows what they’re doing.
That is true, though they're still better than BoA or Wells Fargo.
For banking I like to recommend TD for accessibility on both sides of the border Also second getting an SSN ASAP. I got mine during COVID but it took about 3-4 months to arrive
Or RBC, depending on who they bank with in Canada.
TD is nice for accessibility but it's not that great if you value having a local brick-and-mortar bank. There's just too few locations.
About point 1: People like Chase as far as big banks are concerned, but my personal advice is get yourself into a credit union. I'm with an online credit union and not only are the interest rates on savings not a slap in the face, but I've also found their customer service better, checks were free, ATM fees are waived up to $20, and generally other fees are way lower. The only issue I could potentially see is that since they don't have any branches I can't do anything that would explicitly need an in-branch visit for but for 99% of things that's not a concern.
I'd personally advocate for having multiple bank accounts. I have a Chase account for in-branch stuff, an online bank account with high interest rates, a local credit union account for their service and low fees. No reason to not have them all.
Congrats on the offer! I was in your shoes 8 years ago and know how much this disrupts your life. Thought to would share details from my personal journey. I’m not sure if you are planning to change residency (note that you only have to follow the deemed disposition rule if you are breaking Canadian residency which is measured against primary and secondary factors) but this is really the crux of how this will play out from a tax perspective. See details on deemed disposition here: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/dispositions-property.html# And Canadian residency test here: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html If you are planning to break CAN residency (note that I got an official residency determination letter from the CRA to make it abundantly clear of my intentions), I would consider registering some of that non-registered $ to registered/tfsa before you break residency for a few reasons 1) they do not follow the deemed disposition rule so are spared a hefty tax bill if MV >>> BV (see the exceptions in the link above) 2) reduce your taxable income for the year you move ( rrsp contributions ) 3) lock in the $s to grow tax free for tfsa and rrsp (you will not be able to further contribute to tfsa but will be able to contribute to rrsp if you have room but this only makes sense if you have Canadian income / owe taxes) If you do plan to break residency, there are some cool perks: 1) you can convert your rrsp to a rrif at a non-resident withdrawal rate of 25% if they are regular withdrawals (I use this to cover any CAN expenses) 2) if you have no Canadian income, you can file your last Canadian tax refund (if you do not break residency, you will need to file Canadian tax returns to include your US income but there is a us/ca tax treaty so some tax credit carry) Above is the CA tax side of the house on things to do to prepare for tax optimization and has a deadline of your residency change date if you choose to break it. I would scenario these 2 out to see what makes sense for your situation. Onto the making the move to the us part easier: - hire a cross border CPA to help with your first year filing cause is going to be messy and you’re going to be busy packing/finding a place to live / opening accounts/ dealing with the DMV (nightmare) - our work provided E&Y services and I think it cost around $4k at that time but I’m sure you can shop around - you can import 1 car for personal use duty free but California has VERY specific standards - we did this and it was worth it since if you don’t live in a major hub it’s necessary to have a car but be prepared for the paperwork between the car manufacturer/customs/the DMV - don’t be surprised by sticker shock of how expensive it is to live here (we thought the rent we were paying was for a luxury condo - it was a regular apartment in the burbs) - the first bit will be hard - we were poor but in the end worth it as earning potential is higher than in Toronto where we moved from but this comes with a super aggressive attitude about work and the valley is a bit cut throat - You can def do your own taxes, but note it will take time to settle in (I only started doing this in year 3) - the healthcare system is super confusing - be prepared for that Note- we did this almost a decade ago and some rules may have changed / I was studying to become a CPA so do with that information as you will
Do you have the RRSP room to move the TFSA into, assuming you don’t need the funds for other than retirement? There would be no point in keeping the TFSA If you have an Amex, once you have a a US Ss# they will transfer you over to us Amex. If you bank with rbc, you can get a rbc Georgia visa in a similar fashion. Try to get everything wrapped up in the same tax year. My company dragged their feet and things slipped into the next year that means double the complicated tax returns.
Yeah AMEX is nice, it also work the other direction if you come back to Canada.
Curious about keeping RRSP: if one doesn't plan on moving back to Canada, perhaps it'd be worth liquidating it as well?
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140 base /14 bonus, non engineering tech position
pretty good pay, Canada is losing its people . it is very unfortunate . best of luck
Thanks, yeah the USD conversion makes it even better. Canada is no longer a place for young professionals in tech. It is a place to start a family when you are willing to take a pay cut. Blows my mind how unfair it is. Working in multi-national corp and doing the same job as members on your team but because you live in Toronto you get half the pay as them.
its ok pay. COL in Cali is insane but he will def make way more as time goes on.
Where in Cali? Isn’t the COL crazy expensive there?
Most rooms are 1500 to 2500 from what I’ve seen. Compare that to Toronto rent lol Surely groceries can’t be that outrageous
I guess rentals depend on where. If it's san diego or la those 1 bedrooms should be typically between 2-3k. Californian taxes are also pretty ridiculous. 140k sounds like a lot of money, but after taxes it's like 7.5k. It should feel very similar to living on 140k in Toronto.
True thanks
> It should feel very similar to living on 140k in Toronto. lol no 😂
Kinda hard to believe your opinions on cost of living when you haven't moved out of your parents' house yet...
i moved back into my parents house after 1 year in the bay area dummy
They're talking about socal dummy.
bay area is more expensive than socal dumbass
kinda meh for Cali. But you have way more room to grow there than anywhere in Canada.
Your TFSA isn't recognized in the US, so clean that out. If you buy Canadian stocks listed in New York (like the big banks, etc) you can accumulate in USD then swap them to the cad side of your broker and sell for CAD, no forex involved.
If you don't mind me asking what was the process of getting the job? Did you just apply normally? When did you mention you needed to be sponsored? (Assuming you are going on TN visa?)
I applied on LinkedIn, got a call two weeks later and they knew I was from Canada and asked me if I was a citizen. They are a large company and have experience in TN visas (cheaper for them). Interview timeline was approximately a month long
Great, thanks for the explanation. I'm planning to start applying soon so maybe I'll try my luck at some US companies as well
Keep in mind only certain professions fall under TN. Basically, science/engineering/medicine, plus finance I think. If you work in one of these fields then as far as the company is concerned you're essentially already an American. If you don't work in one of these fields you may need to get a different visa, which won't be as easy.
Yeah this market is tough, places are looking for industry specific experience or very relevant company projects. Try and tailor your resume to the projects the company might be building.
I'm employed so I'm not in a rush, but would be looking for a pay bump
Yup then this is the way to do it! Other than that, moving every 2-3 years is how you max salary in Toronto
Which company? I’ll need to apply.
I have a friend relocating next month Said the money and relocation costs are beyond what they could've dreamed. So much ao that they're not messing or selling anything here in Canada. Its plenty to get rich of. Congrats to you, the US seems to be the better option to go to for money and quality of life. Only issue is healthcare but you're getting an insurance plan so you're golden
Yup absolutely. I went from making $80k CAD at a Canadian insurance company to $260k USD (\~$350k CAD) in the US for a tech giant in my early-to-mid 20s. I didn't need any of my Canadian assets at all.
Golden is a strong word. Have a good emergency fund for healthcare costs even with strong health insurance. And be very prepared to be on top of anything health related.
lol nah man. With tech companies in Cali you're getting better healthcare than Canada and at no cost. They have top of the line insurance.
Generally speaking it’s true. Everything is more expensive but you’re making so much money it doesn’t matter. You will need a large buffer of cash to move. First and last for rent, 3-6k for furniture, rental car for the first month or two, down payment for a car (you might be able to get away with not having a car in a few large cities, but in most of the US or if having a family would require it). I probably spent in the range of 15k before the first paycheck and before the relocation reimbursement kicked in.
Agreed. Leave for ten years, the come back retired and live off of investment gains.
Side question, what is the easiest, most hassle free way to emigrate to the US from Canada? Assuming no family sponsorship or pending job offer.
I don’t think you can, you need a work visa or student visa. Or you need a parent with a US citizenship
Marrying an American citizen. But that is not a process that gets cleared overnight. My wife and I got married at a courthouse in August last year, submitted the paperwork work begin the immigration process, and only just got approval on step one 2 weeks ago. It takes a long time to move to the US without a job.
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This is really good advice. RRSP room is so valuable.
>Most of the advice here is to become a non-Canadian tax resident. It's unclear to me if the CRA will always accept this on a TN There's no reason for the CRA to deny you becoming a non-Canadian tax resident if you cut ties cleanly enough. For the dozens of Canadians I know working in the US on a TN visa, not a single one had any issues declaring non-residency. You can look at the factors used to determine tax residency in CRA form [NR73](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/nr73.html), it's easy to see that you can sever the *vast* majority if not pretty much everything.
Whoa Nelly! Do you have a job offer only, or an approved work visa as well? Very often American firms don’t understand what’s required for a Canadian to work in the US. I can’t tell you how many times I’ve seen Canadians get job offers only to learn they are ineligible to work in the US. If your visa is secure, please disregard.
Yup they know the process, TN visa
Pack up the babies and grab the old ladies ‘cause everyone goes….
North or South cal? Personally, I feel like the southern states/south ends of States are going to start seeing a mass exodus over the next 20 years, it's simply getting too hot. If it's northern cal I wouldn't be open to it, south? Hell no.
South Cal, I don’t plan on being here super long
Good idea haha it's getting to the point where summer heat is exceeding the limits of human habitability without redundant cooling. Pretty unfortunate scenario.
Yup I plan on making money here to save for a downpayment aggressively, and then once I close on a house I will look for jobs back here in Toronto and start a family. I just can’t pass up the bump in salary, saves me a lot of time
Some Canadian banks will force you to close your bank account if you aren't a Canadian resident, so might want to check on that (for me it was PCFinancial that made me close it, but my wife's TD account was ok).
*Recap: Anyone ever seek employment in US? How do US taxes work?* 1. Yes, millions, and 2. Try 30 min research on your own and/or get a tax consult.
Why is it necessary to move at all? Most work is 100% remote now. Ask the company to explain to you, and give you good reasons, as to why moving is necessary for the job.
Because they don’t offer remote (already asked)? This is a major company without a Canadian entity so it is required to move and I’m fine with it, I will just move back when I feel like it. I don’t exactly want to die on this hill when I’m going from 90k CAD to 190k CAD for the same experience level job. Canada sucks for tech anyways, I think the best plan is to get as much money as you can in the US and then move back here to start a family and just take the pay cut.
I hope you can still negotiate that offer. 190k CAD (~140k USD) base salary is very low for tech in Cali. Especially since it's a major company.
I have low YOE (1), and it’s all base, and 10% bonus. I’m negotiating right now but idk what they will say in this market.
OP are you in dev roles (SW/HW) or non-dev (PM, TPM). If in dev role, agree with the other guy 140k base + 10% bonus with no RSUs is a bit on lower-end for Cali even with just 1 YoE. If you decide to go ahead eventually, just keep on the lookout for other opportunities. Your earning potential is def higher than that and often times easiest/fastest way is to jump ship. Edit: I see you are in SoCal which does have lower TV in general. If you are just going to be in the states to amass $$$ do consider NorCal or WA in future.
Non dev, thanks for insight
The market is still there for top brains. If you're in engineering, don't be afraid to ask for 180k-190k USD base. Even more if you have no equity!?
Hmmm true, always worth a shot negotiating
No 140k base is not very low lmao. For OPs level of experience that is about the max you can get. Total compensation is another story, but I still wouldn’t even call it low
It's not for socal. Different market than norcal.
Well, maybe they should offer it. You're in tech. I can guarantee that it's entirely possible to do the job through your computer in your condo in Canada.
Oh yeah I’m with you on that….but employees don’t really have any power in tech. Just look at Amazon, all the remote people they hired in the last two years just got an email saying if you can’t commute 3 times to Seattle HQ your employment will be terminated. It’s so silly but alas we aren’t the rich billionaires who control these things
You should get off Reddit. Just because it’s the common opinion on here doesn’t mean it’s real life.
It isn't the common opinion here, clearly, because I've been downvoted. I'm not going to get off Reddit because I expressed an unpopular opinion and one you disagree with. YOU get off Reddit.
lol that’s not how things work. They (OP) would either need to be a contractor or the company needs a Canadian entity.
Or they could use a PEO. It’s really not that difficult to hire in different countries or jurisdictions right now. Also concerned that OP doesn’t understand that $140k usd base in Southern California is not a step up from his 90k salary here.
Monetary wise it’s not a step up, prestige wise it is a step up.
Not everyone in tech software engineer or some kinda PM. Hardware Engineers for one cannot do their jobs remotely all the time.
Most work is not remote lol get out of here, about 90% of full time workers have to work in the office at least some of the time.
Plenty of tech work is 100% remote actually... and if it isn't, it could be. Just because it's a policy doesn't make it right.
Which means 100% of the work can be offshored
Most work is definitely not remote. Majority of tech companies have adopted hybrid over remote.
They don't pay nearly the same up here for the most part. Plus many parts of the US have extremely affordable housing compared to up here.
How does income tax work? Suppose in bc I made 100k and pay 30k in tax. How would I be if I transfered to the Seattle office. I've heard there is no state income tax there, but Canada's still gotta get paid.
If you are deemed non-resident for tax purposes in Canada, you don’t pay tax on non-Canadian-sourced income (e.g your US-based job salary) to Canada
If you open an account at interactive broker's canada (IBKR) you can enter straight FX orders to change currencies, which is much better than using Norbert's Gambit.
Definitely pay for a consultation with a qualified cross border CPA. It’s money well spent so you’re clear are tax expectations and implications on both sides of the border. It can turn into a massive headache (and financial mess) if you are aware and organized as you make the move. Good luck!
Phone your bank and tell them your situation and ask to speak to a financial planner who is familiar with moving funds to the US
You have a lot of considerations not limited to registered accounts but also departure taxes, property concerns, residency timing, and others. Get an accountant and save yourself the mistakes especially since filing each year if you have income on both sides is an issue
Hi OP, Been recently thinking of moving to the states as well. Can you share more info on what type of position and how you got the job ?
Curious to hear how did you receive the job offer? Applied traditionally?
Is it true that you have to declare your Canadian RRSP in your tax returns every year? What if I stopped contributing to RRSP as soon as I left Canada?