Going down South?


December 13th, 2012

It is the time of season when a number of people do what Canadians do best. ¬†Travel south for the winter. ¬†Since I’m stuck in my office for the entire winter, I will at least bid you a fond farewell and remember to come home in the spring.

I’m also going to take it one step further and remind you of your potential tax requirements. ¬†I hate to ruin a winter vacation for anyone, but if you don’t want a nasty tax surprise it might be wise to plan ahead.

First, take a look at the Canada Revenue Agency’s P151, Canadian Residents Going Down South. ¬†It’s written in good plain English. ¬†Here’s a quick snapshot of some of the points covered.

1.  Foreign property.  Do you own property (land, properties, investments, cash accounts, etc) with a total value of more than $100,000?  If yes, you may be required to file the T1135 form with your tax return.  Some exceptions apply; for example, a property used primarily for personal use.

2. ¬†Income. ¬†If you earn or receive income while outside Canada, you will almost certainly need to declare this as income on your Canadian tax return…….. Canadian residents are taxed on their world income.+

3.  Certain tax credits.  Medical costs in the US, donations to US charities, etc. are discussed in the P151.

4.  US Taxes.  Are you Resident Alien?  A Non-Resident Alien?  The P151 does a good job of introducing the subject, but this is another tax maze where only the brave will enter.  If you are concerned you may be required to file a US tax return, consider talking it over with a US tax professional.

 

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