U.S. and Canadian Taxes

QUESTION:

I am a U.S. citizen. If I move to Canada to live and work there as a Canadian permanent resident (living with my Canadian girlfriend), do I pay both U.S. and Canadian Taxes?



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david ingram replies:

Congratulations, 'You' get the only question answered today of about 60 I have received.

If you live in Canada and are a US citizen, you are taxed first in the country that is the source of the money.  Therefoe, if you live and work in Canda, you are taxed frist in Canda on your wages and then you have to report them again on your US 1040 and claim a foreign tax credit to avoid US tax.

If while living here, you have somemutual funds or bank deposits or a rental house you left in teh US, the US gets the tax first and then you report the income again on your Canadian return and claim a foreign tax credit in CANADA for the tax paid to the US.

This is not double taxation but you do have to file returns for both countries.

GOTO www.centa.com and read the October 1995 newsletter in the top left hand box and then read the US/Canada Taxation section in the second box down on the right hand side.

And, if you have any Caandian Accounts when you get here, if the total is over $10,000 US at any time in a year, you have to fill in form TDF 90-22.1 for each account.  If you happen to start a Canadian Corporation, you have to fill in form 5471.  If you buy a Canadian RRSP, you need to fill in form 8891.  You can find allthese forms under forms and publications  at www.irs.gov

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CEN-TA Cross Border Services - Tax, Visas, Immigration
http://www.centa.com/article.php/20070623235220484