Canada-US Income Tax Preparation

US and Canadian income tax are similar in objectives but different in all details.  The similarity in objectives is because both governments want citizens and residents to do the same things, that is work hard, earn a paycheck, support your kids and send them to school, and save for your old age.

All of the details are different because the Canadian tax laws are prepared by the finance department. The Finance Minister is not concerned with local effects so he takes a broad view. The US tax laws are prepared by Congress, with about 535 different legislators taking part, with each one hoping to reward his voters and his campaign contributors. If not he wants to at least tell them that he introduced a legislative amendment that would have helped them if it passed. This is why the US tax code is about 80,000 pages and the Canadian is about 700 pages.

The US taxes its citizens no matter where they live in the world. I believe that Eritrea is the only other country that does this. When a Canadian citizen leaves Canada he pays taxes on all the previously-untaxed capital gains achieved during his stay and has no further tax reporting liability until he re-enters Canada unless he has Canadian-source income.

The US government goes to great effort to keep track of any financial transactions performed out of the country by its citizens. It has required citizens who have foreign financial accounts with a maximum combined value of $10,000 or more to file form TD F 90-22.1 for more than 30 years. In 2005 they introduced form 8891 to track the value of Canadian Registered Retirement Savings Plans. In recent years they have introduced form 8938 to ask for more information about foreign financial accounts. The most intrusive of all takes effect January 1 of 2014. It requires financial institutions that are outside the US to report all accounts owned by US citizens to the IRS. Most banks have responded by closing all accounts owned by US citizens. This is utter nonsense. The US has as much right to order Zimbabwean banks to obey US laws as the Zimbabwean government has to order US banks to obey Zimbabwean law. A sane person would expect legislators, most of whom are lawyers, to remember Law 101 and the first lesson, which should have been jurisdiction.

There is a tax treaty which is intended to make clear rules about cross-border income issues so that the taxpayer will pay tax once and only once on each income item. Normally he or she takes a credit on the second return for the tax paid on the first return.

When a person has to file taxes in both countries it is nearly always advantageous to have them prepared together by the same person.

74 thoughts on “Canada-US Income Tax Preparation

  1. Only a smiling visitant here to share the love (:, btw outstanding pattern. “Justice is always violent to the party offending, for every man is innocent in his own eyes.” by Daniel Defoe.

  2. I am extremely impressed with your writing skills as well as
    with the layout on your weblog. Is this a paid theme or did you customize it yourself?
    Either way keep up the excellent quality writing, it is rare to see a nice blog like this one today.

  3. It is appropriate time to make some plans for the future and it is time
    to be happy. I have read this publish and if I may just I
    want to recommend you few interesting issues or suggestions.
    Maybe you could write subsequent articles regarding this article.
    I desire to read even more issues about it!

  4. Hello there, just became alert to your blog through Google,
    and found that it is really informative. I am gonna watch out for brussels.
    I’ll be grateful if you continue this in future. Many people will be benefited from your writing.

    Cheers!

  5. Magnificent goods from you, man. I have be mindful your stuff previous to and you are just extremely magnificent.
    I actually like what you’ve acquired here, really like what you are saying and the
    best way in which you say it. You’re making it entertaining and you still take care of to
    stay it wise. I can not wait to learn much more from you.
    That is really a great site.

  6. I was wondering if you ever considered changing the structure of
    your site? Its very well written; I love what youve got to say.
    But maybe you could a little more in the way
    of content so people could connect with it better.
    Youve got an awful lot of text for only having 1 or
    2 images. Maybe you could space it out better?

  7. Wow that was unusual. I just wrote an incredibly long comment but after I clicked submit my comment didn’t appear.
    Grrrr… well I’m not writing all that over again. Regardless, just wanted to say excellent blog!

  8. You actually make it seem really easy together with your presentation however I in finding this matter
    to be actually one thing which I think I’d by no means understand.
    It seems too complex and very broad for me. I am looking forward for your next
    submit, I will try to get the hold of it!

  9. always i utilized to read smaller posts which also clear their motive, and that is certainly
    also happening using this post which I am reading now.

  10. You are so cool! I do not believe I’ve read through anything like this
    before. So good to discover another person with unique thoughts on this subject.
    Seriously.. many thanks for starting this up.

    This website is something that is needed on the internet,
    someone with some originality!

  11. Magnificent beat ! I wish to apprentice while you amend your site, how can i subscribe for a blog
    site? The account aided me a acceptable deal.

    I had been tiny bit acquainted of this your broadcast provided bright
    clear concept

  12. I enjoy whatever you guys are generally up too. This sort of clever work and reporting!
    Keep up to date the great works guys I’ve added you guys to our blogroll.

  13. I don’t even learn how I stopped up here, however I assumed this submit was good.

    I tend not to recognise who you’re but certainly
    you happen to be visiting a famous blogger in the event you are certainly not
    already. Cheers!

  14. I needed to thanks for this great read!! I certainly enjoyed every bit of it.
    We have got you saved like a favorite to think about new things you post

  15. Begin by selecting a web hosting company. Select a domain name that is closely related to the theme of your blog and be sure to buy it from your web host. It may take several tries to find one. As soon as you have made your first post subscribe to your own RSS feed.

  16. Of course you may reprint some of my ideas but if you quote more than a paragraph I expect a link or reference.

  17. Great blog here! Also your web site loads up fast!

    What host are you using? Can I get your affiliate link to your host?
    I wish my website loaded up as fast as yours lol

  18. I must thank you for the efforts you have put in penning this
    blog. I’m hoping to view the same high-grade blog
    posts from you in the future as well. In truth, your creative writing abilities has encouraged me to
    get my very own website now 😉

  19. Generally I don’t read article on blogs, however I wish to say that
    this write-up very compelled me to take a look at and do it!

    Your writing taste has been surprised me. Thanks, very great post.

  20. Fantastic beat ! I would like to apprentice while you amend your
    site, how can i subscribe for a blog site? The account aided me a acceptable deal.

    I had been a little bit acquainted of this your broadcast offered bright clear concept

  21. Excellent goods from you, man. I’ve be aware your stuff prior to and you’re just extremely excellent.
    I really like what you have obtained right here, certainly like
    what you are saying and the best way during which you assert it.

    You’re making it enjoyable and you continue to care for to stay it sensible.
    I cant wait to read far more from you. This is actually a
    wonderful website.

  22. First select a web host company. Next select a domain name that is closely related to the theme of your blog. This may take several tries. Buy this domain name from your web host, not from anywhere else. Select a platform. I use WordPress, which is the most common. Subscribe to your own RSS feed as soon as you have made your first post. This will provide a remote set of your posts to reduce the potential damage from hackers.

  23. My web host is having difficulties. It looks like I will have to move to a different host.

  24. Excellent blog! Do you have any tips and hints for aspiring
    writers? I’m hoping to start my own website soon but I’m a little lost on everything.
    Would you advise starting with a free platform like WordPress or go
    for a paid option? There are so many choices out there that I’m
    completely overwhelmed .. Any suggestions?
    Kudos!

  25. wonderful publish, very informative. I wonder why the opposite specialists of this sector do not realize this.
    You must proceed your writing. I’m sure, you’ve a great readers’ base already!

  26. I like WordPress and am using it. The only problem is that some subscribers to the comments receive 4 copies of each comment.

  27. Attractive section of content. I just stumbled upon your blog and in accession capital to assert that I get actually enjoyed account your blog posts.
    Anyway I will be subscribing to your augment and even I achievement you
    access consistently rapidly.

  28. Have you ever considered about adding a little bit more than just your articles?
    I mean, what you say is important and everything. Nevertheless just imagine
    if you added some great visuals or video clips to give your posts more, “pop”!
    Your content is excellent but with images and videos,
    this website could undeniably be one of the greatest
    in its field. Fantastic blog!

Comments are closed.