What month of the year should I move to avoid filing Canadian taxes


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texancanadian   
Member since: Jan 04
Posts: 132
Location: Houston, TX

Post ID: #PID Posted on: 18-10-06 14:15:02

I landed in Canada in April 2005 and moved back to US 2 weeks after landing. I have PR Card and Bank Account (dormant with no activity) in Canada. I do not have OHIP or Canadian drivers license yet.
I am most probably planning on moving to Windsor, ON and work in Detroit with my same company im working for right now. My question is regarding timing of moving and tax liability. I am planning on renting an apartment in Windsor (not purchasing home). After moving to Windsor I am planning on getting Canadian Drivers license and Ontario car insurance.
My question to all is when should I time my move to avoid filing Canadian taxes for the year of move. If I move in July 2007 will I be liable for paying Canadian taxes on all my income for 2007 ? What about August or September.
I realize that it would be best to coordinate and move either in January 07 or January 08 but I feel by moving in the January cold I may be setting myself up for failure because this cross border commute thing is going to be new for me anyway.
Please advice.
Thanks



tamilkuravan   
Member since: Jun 05
Posts: 5775
Location: God's own country

Post ID: #PID Posted on: 18-10-06 14:28:37

In Ontario taxes have to be filed for each year from Jan-01 to Dec. 31 st. or if you move in between a year, then from the period that you moved to 31 st. dec. of that year.
So it is up to you as to when you want to move.
SS of this board and Dimple 2001 can advise you better.
TK A


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sudesingh   
Member since: Jul 04
Posts: 2085
Location: Toronto

Post ID: #PID Posted on: 18-10-06 14:30:51

As per the law you are expected to file taxes, if you were a resident of Canada on Dec 31st.

When U landed in April 2005, did you apply for a SIN card.

Quote:

If I move in July 2007 will I be liable for paying Canadian taxes on all my income for 2007 ?



Yes


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Reiki Grand Master


texancanadian   
Member since: Jan 04
Posts: 132
Location: Houston, TX

Post ID: #PID Posted on: 18-10-06 14:51:10

Sudesingh,

Yes I applied for and have SIN card and number. However I dont have single day or employment in Canada or any earnings.

By Dec 31 do you mean Dec 31 of that yr. So If I move Dec 1st 2007 I still need to file Canadian taxes for 2007 ?

I read somewhere that you need to live in Canada for 183 days in a yr to be considered as resident for tax purposes. Is that not right ?

Also sudesingh do u also work in US ? and commute daily to Canada ?



dimple2001   
Member since: Apr 04
Posts: 2873
Location: Western Hemisphere

Post ID: #PID Posted on: 18-10-06 16:43:32

Normally, if you live in Canada, you may be treated as a resident for tax purposes. So, I am going to use the term resident in the context of tax resident.

If you move in July 2007, you will have to file taxes by end of March 2008 for the 2007 tax year. However, the tax form has couple of lines where it lets you enter the date you entered Canada. So, you probably have to file taxes for that portion of the year you lived in Canada.

If you work in US (and continue to work as a commuter) and live in Canada for half year and have lived in US for the previous half year, you are considered to have dual status. You are obligated to file US taxes and show income for the entire 2007 since you earned wages from a US source.

Then you file Cdn taxes and show wages (exchanged in Cdn $) for only the portion of the year you have lived in Canada. Then, you take credit for whatever taxes you have already paid for that portion of the year you were Cdn resident in order to avoid dual taxation. Then, if you still owe the Cdn Govt any money for that part year, you pay the sum.

Simple, eh? Not really.

Seriously, go to a tax consultant or preparer and get your taxes done.


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Dimple2001


texancanadian   
Member since: Jan 04
Posts: 132
Location: Houston, TX

Post ID: #PID Posted on: 18-10-06 17:57:39

Thanks dimple,
If its only paying taxes for part of the year you actually move there it makes sense.

Dimple can you please recommend a tax accountant/consultant I can speak to. Someone who is proficient with cross border taxation issues.

Specifically want to find out that if between January and June I put in 15% of salary in 401k plan and after July put in only 4% (match amount) if Canada will tax me for the 15% I contributed before moving to Canada.

Also another side question - Can commuters from Windsor to Detroit claim canadian unemployment benefits if they loose their job ? They sure pay taxes but can they get the benefits ?

Thanks



Smiley   
Member since: Mar 03
Posts: 1185
Location: USA

Post ID: #PID Posted on: 18-10-06 18:24:05

http://www.centa.com" rel="nofollow">LINK for all your cross border taxation needs


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