Posted on: 23-02-17 23:08:43
Hello All,
I am a Canadian citizen and I moved to USA with green card in Dec 2015 with my family. I am working and living in USA with my family. I sold my house as a non resident in Canada.
I still have Canadian Bank Account with my old address.
I took out money from my RRSP and transferred from Canadian bank to USA Bank to buy house in USA. My son got admission as a Undergraduate student In USA University. We contributed in Heritage RESP for last 18 years.
Last year, (2016) for his first year, we got RESP money from Heritage. We are going to get some money from his RESP from Heritage for another 3 years.
I am working in USA. Now, I am in dilemma, should I fill Canadian tax return for 2016? As my income is high(Around $130K in CDN$) and also I have taken out bunch of money from my RRSP, I am on high tax rate. I did not surrender my health card but I never used it after I moved to USA.
What is the best advise to file the Canadian Tax return?
As long as you have ties with Canada you need to file Canadian tax returns. The fact that you still have a bank account and a health card (irrespective of the fact that you haven't used it) demonstrates the fact that you still have ties with Canada.
Once you sever all ties you should file for non-residency, and then you wont have to file Canadian Taxes.
Now that you're in a higher tax bracket and have US income, you'd still land up paying tax in Canada on your US income.
How about your Driver's licence. Was that surrendered?
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Reiki Grand Master
I did not surrender my Driver license yet. If I surrender my health card and driver license and change address in Canadian account, can I skip filing Canadian tax return for 2016?
At present situation , what happens if I don`t file Canadian tax return for 2016?
For starters, you have NOT severed your ties here in Canada.(With Canada) It is not for me to tell you that. It has to be in writing from the Canada Revenue Agency. Pl.see the link.
In a way it is good. because you now do not have to pay any Capital gains on the sale of your Primary Home, (If it was one) There you saved your self some dough.
Do not worry about the taxes you will be paying on the withdrawals from your RRSP. Chalk it to experience. Your RRSP holder/Bank should have told you that when you withdrew the same. If you made $130,000 this year, you will have a chance to plough back a few bucks and adjust a few bucks in there. But it is an accountant's nightmare. I cannot tell you more about it not knowing all the facts and the amounts pulled out etc., and the dates to go with it. I only have your income figure that you quoted in here. You do not have to file your return till 1st of May 2017. Ample time to talk with a competent accountant. For the time being you are still a CANADIAN. So also your Family members. So, they will say that you have Canadian links. (F'king Crooks)
By the by, if you are living in the USA and paying taxes there, you will certainly will get a break for the taxes paid there and you can get credit for the amount paid there here in Canada. That is where the Accountant comes into the picture to help you AND tell you that.
Don't take too long to close out of Canada and sever your ties with canucks here. So, find a good accountant and get it all squared away, the sooner the better. I will give you a link under this for some materials that you can buy and keep.
*Block charges $350. A few others start so expect to pay more. Both sides will run you into 1K. BUT ASK.
*** Everything gets prorated for you here in Canada. The Accountant will brief you about it.
FH.
https://www.hutcheson.ca/severing-ties-with-canada/
http://www.garygauvin.com/links.html
http://www.ustaxservices.ca/
https://serbinski.com/working-in-usa/rrsp
http://madanca.com/free-tax-secrets/ Decent one.
https://forums.serbinski.com/
http://www.taxonweb.ca/pages/links.html Decent One
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Quote:***
Originally posted by desi1966
Hello All,
I am a Canadian citizen and I moved to USA with green card in Dec 2015 with my family. I am working and living in USA with my family. I sold my house as a non resident in Canada.
I still have Canadian Bank Account with my old address.
I took out money from my RRSP and transferred from Canadian bank to USA Bank to buy house in USA. My son got admission as a Undergraduate student In USA University. We contributed in Heritage RESP for last 18 years.
Last year, (2016) for his first year, we got RESP money from Heritage. We are going to get some money from his RESP from Heritage for another 3 years.
I am working in USA. Now, I am in dilemma, should I fill Canadian tax return for 2016? As my income is high(Around $130K in CDN$) and also I have taken out bunch of money from my RRSP, I am on high tax rate. I did not surrender my health card but I never used it after I moved to USA.
What is the best advise to file the Canadian Tax return?
https://turbotax.intuit.ca/tips/using-the-united-states-canada-income-tax-treaty-to-reduce-double-taxation-6229
Read the above link.
You will have to file taxes at both places. But due to DTAA - Double Tax Avoidance Agreement you will get credit for taxes paid in US with CRA.
But generally you will owe taxes with CRA as US taxes are lower than Canada taxes and their dollar is stronger.
Cancelling your health card, DL, Credit cards, Bank accounts, no permanent home or rental in Canada are some of the ways to severe ties with Canada and to be deemed a non resident for tax purposes by CRA.
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America Ka Vyapaari Canada Ka Bhikari
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When you did RRSP you got a break on your taxes with CRA. You don't avoid taxes with RRSP you just defer taxes, until withdrawal
Now that you have withdrawn from RRSP you are definitely paying taxes on them and it will considered income and added to your US income.
You can't have it both ways.
You will even get a T4 RSP slip from the financial institution.
If your income is $ 130 k cad and on top of it you withdrew from RRSP, expect almost 50 % of it to go to CRA. As now your income is $ 150 K +
IRS and CRA have close links. So if you don't file with CRA just a matter of time before they find out.
If you owe taxes And don't pay them CRA will add interest and penalties on top of the owed taxes.
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America Ka Vyapaari Canada Ka Bhikari
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Your bank account will retain your residency status, regardless everything else. You can leave TFSA and RRSP in frozen state but having any other bank account (savings, checking, or investment) will keep your residency active. You will have to do some major rework of all your banking, on top of officially returning driver license, health card etc. I had a super job offer from Saudi but when everything was added up (free housing, medical etc) it turned out that I would owe Canada about 70k a year in taxes!!! Needless to say, I turned down the offer (I was and still am neck deep in investments so these ties can not be killed easily without going thru major headaches trying to find places to park all the dough! lol. But I am quite content here.
You would need to get certified by CRA that you meet all the requirements to declare yourself a non-resident for taxation before you leave again. Good luck.
PS: Ask somebody who actually became a non-resident for taxes, for example, TamilKuravan
