Cross Border Tax Consultants

Filing two sets of taxes as an American living in Canada might be a little daunting & overwhelming. Knowing which tax rules apply to you and tracking your tax filing options can be daunting! Filing taxes as an American residing in Canada attracts its own set of questions and concerns. Is there anything else you need to specify to the Internal Revenue Service (IRS)? How do your financial accounts in Canada influence while filing your tax return? What to do if you are a commuter from Canada to the United States? Thinking about tax procedures & filing in the United States and Canada probably makes your mind spin! Don't worry! Maroof HS CPA is here to help! Cross-border tax returns necessitate a large level of technical and professional knowledge. Over the last few years, the US tax code has undergone considerable revisions. These modifications had a significant influence while filing US tax returns by US ex-pats in Canada. Anyone attempting to file these tax returns without ...

If you are a U.S. person and shareholder of a Canadian corporation, especially Canadian controlled private corporation (CCPC) or professional corporation, you might be struggling around GILTI. What is GILTI? How is GILTI calculated? How to avoid GILTI? If you are having all these questions, you are not alone! Let’s simplify the GILTI for you. If you need a more detailed but simplified understanding of GILTI and how it affects the U.S. shareholders of Canadian corporations, read here . GILTI is a complex tax topic and ideally should be dealt by a cross border tax accountant in Toronto. However, you can avoid the GILTI altogether by one simple decision – Pay yourself Salary from your Canadian corporation! Yes, by paying yourself salary you can remove the earnings from the corporation. The income is reported as an employment income on your Canadian income tax return. Foreign tax credit against the income tax credits paid in Canada are available to apply against US income tax liabi...

  An LLC (limited liability company) is created under the state laws in the United States. Limited liability companies (LLC) offer its members liability protection while offering the benefits of being fiscally transparent. Fiscally transparent entity means that income is not taxes at LLC level, but it flows to its members and taxed at the personal level. The LLCs are America’s favorite business structure, so much so that, local accountants in the US tend to recommend to everyone. Sometimes, they recommend it to residents of other countries without knowing the income tax consequences on those taxpayers in their countries. Many Canadian taxpayers often go ahead an set up an LLC in the U.S. without knowing the serious income tax issues. An LLC is treated as a corporation in Canada whereas a flow through entity in the U.S. Since Canada does not see an LLC as a fiscally transparent entity and consider it a corporation, the income of LLC is not included in the personal income of its...

In Canada, every year many taxpayers go to file their individual income tax returns and are shocked to find that a tax return has already been filed for them! Some innocent Canadians, additionally, get fake calls from cybercriminals who impersonate as tax officials. Sadly, Tax frauds are increasing in number everyday. According to the Canadian Anti-fraud Centre, about 45,000 people became victims of cybercrimes and lost around $96 million in 2019. Even then, a big number of Canadians still take this easy and ignore certain facts about e-filing tax returns. CRA has deactivated 800,000 accounts in order to protect the information of the taxpayers whose credentials are for sale on the dark web. The cybercriminals make all these efforts for taking benefits’ payments and refunds of targeted taxpayers. They are making impersonation scams, malware, and phishing schemes. They are striving to steal the confidential information of many Canadians and Residents. If you don’t want to suffer whil...

  Americans have been moving to Canada like never before, especially in 2020. This is really important that as a U.S. Citizen you familiarize yourself with tax obligations. The U.S. taxes its citizens and permanent residents on world-wide income no matter wherever they reside. Canada taxes its residents (not citizens) on their worldwide income. Therefore, Americans in Canada must file both U.S. and Canadian income tax returns. Filing income tax returns in both countries result in some double taxation issues. Fortunately, the U.S. Canada tax treaty provides relief from the double taxation. As the tax rates are higher in Canada it results in the lower to no taxes owing in the U.S. This is important to know that U.S. citizens are subject to two important foreign assets reporting regime: FATCA and FBAR. If you meet certain thresholds you must file FINCEN 114 and 8938 to ensure compliance. If you fail, penalties are outrageously steep. TFSAs and RESPs are not taxable in Canada however...

    The United States uses a Substantial Presence Test (SPT) to determine if an individual needs to report its income to the IRS. When you spend so much time, even without undertaking any economic activity. Substantial presence test (SPT) uses a specified formula to determine the number of days in current and two preceding years. Add the below and if the result is equal to or more than 183 days, you need to file a U.S. income tax return. 1. Total number of days in the current year – 1X 2. Total number of days in the first preceding year – 1/3X 3. Total number of days in the second preceding year – 1/6X If you spend a minimum of 31 days in the current year and the result of the above formula is equal to or more than 183, you have met the SPT. For Canadians spending winter in the United States, it's very easy to meet this substantial presence test and become subject to U.S. income tax. Relief for Canadian Snowbirds from U.S. Taxes If you spend less than 183 days in th...