Cross Border Considerations While Living in the USA
By Tracey Feist
The Organization for Economic Cooperation and Development estimates that of the 1.1 million people who were born in Canada residing abroad, 82 per cent of that population live in the USA. Regardless of whether or not that move is temporary or permanent, many of those Canadians are unaware of the financial upkeep that needs to occur when it comes to banking, immigration, taxes and estate planning while living in the USA.
Those topics were the focus of a “Cross-Border Immigration Issues Affecting Canadians Living in the U.S.” seminar held in Denver on May 15, 2014; the event was organized and sponsored by the Canada Colorado Association, with support from the Canadian Consulate in Denver.
Four speakers discussed their areas of expertise in banking, taxation, immigration, and estate planning. The following is a brief summary of those presentations and links back to the presenter’s paper handouts.
Stern & Curray, LLC, Global Immigration Law
Ken Stern has been working with “hundreds, if not thousands”, of Canadian citizens residing in the United States over the past 35 years. Ken states, “While each person has his own individual goals, interests and concerns, the following is a list of the most common questions that I have received over the years from my Canadian ex-pat clients and friends”:
For the answers to those questions, click HERE to review Ken’s presentation.
Alain Forget, VP Head of Sales & Business Development
Sr. Relationship Manager
Janine.Terracciano@rbc.com 561-691-5324 or 561-876-9786
Canadian clients with complex U.S. banking and financial management needs require a level of expertise and guidance that go beyond traditional client service options. An expat himself, Alain confided to the group how hard it had been to establish a credit rating and open bank accounts when his family first came to the U.S. 20 years ago.
Alain was charged with developing the strategy for making it easier for those Canadians, living in the USA, to manage their cross border banking needs, all under the auspices of the Royal Bank of Canada. Now, 10 years later, RBC US now has over 190,000 clients in the U.S. who are able to seamlessly transfer funds up to $25,000 per day!from a Canadian to U.S. account, deposit funds through cheque capture and even pay their bills on the Canadian side of the border.
RBC uses a unique approach: “we combine relevant and ongoing advice with flexible cross-border banking solutions, valuable professional partnerships and an exclusive level of service to accommodate and simply all aspects of clients’ U.S. financial dealings.”
Jordan Friedman, CPA, M.T.
Nothing is certain except death and taxes. Jordan Friedman echoed that old adage during his presentation of U.S Tax Compliance for Multi-National Taxpayers. Jordan says that two of the biggest mistakes many Canadians make when moving to the USA are not becoming tax compliant while living in the U.S., or they not properly take a financial inventory so to avoid potential disclosure errors. “Tax maintenance costs less than tax remediation. Many disclosure violations are criminal matters, not just tax matters,” he says. “Non-willful violations carry penalties of $10,000 or more, and willful violations can carry jail time,” says Jordan.
From the ‘FBAR’ Form FinCEN114 Foreign Bank Account Report for Aggregate Accounts Greater than $10,000 to Form 8865 Disclosure of Ownership in a Foreign Partnership, Jordan contends that disclosure is always the best policy when it comes to Canadians becoming compliant when paying taxes in the US.
Ian Barclay, CPA/PFS
Jones Barclay Boston Wealth Management
In his discussion on the financial and tax aspects for Canadians living in the US, Ian Barclay says his firm uses a comprehensive approach when providing guidance on financial, investment, tax and estate matters. Ian says he could spend a full day discussing the intricacies of the material the seminar group only briefly glossed over!
“A proper tax analysis must look at the Canadian (and sometimes provincial), U.S. (and most often state) consequences to see if the Canada-U.S. Tax otherwise known as the Tax Treaty applies.” Other questions Ian says Canadians must answer are important ones such as: ‘What is your current status, or what do your Canadian savings, pension and compensation plans look like?’
“The U.S. doesn't tax the portion of pensions that result from non-deductible contributions made by the taxpayer. For example, since you do not get a U.S. tax deduction for contributions to RRSPs, you have a ‘step-up in basis’ to the extent of these contributions as well as any earnings and accretions occurring while being a non-resident,” says Ian.
For more information on healthcare, owning property in Canada and returning to Canada and other topics, click on Ian Barclay’s Presentation.
Whether it is for education or employment, Canadians need to tackle the complexities of tax, immigration and financial planning as they move through the different stages of life while living on U.S. soil. Planning for the future means understanding the laws that are specific to the USA, but it also means potentially employing those individuals who can help define and direct them down the right a path that may keep them in the U.S., or lead them back home.