Tips on Cross Border Tax Planning in Canada and USA

Effective Cross Border Tax Planning in Canada and USA

For any individual or business domiciled in a country, tax is an important civic duty. Every country has laws that govern this and it can lead to serious consequences when one runs afoul of these laws. As a United States citizen, you are required to pay taxes to the US even if you do not live there.

The United States and Canada historically have a good relationship. This also extends to taxes paid across the borders of these two countries. They have a treaty that dictates how Canadian citizens living in the US and US citizens living in Canada should be taxed. This however is in certain circumstances and it helps to save a lot of headaches when it comes to taxation.

This treaty helps to avoid double taxation due to the complexity of tax rules in the two countries. This has led to what is referred to as cross-border taxing. So, if you are a citizen of one of these countries and own a business or live in the other, you may be eligible for this. You may learn more about the treaty here.

Planning Your Tax Across The USA- Canada Borders

Planning your tax payments even when you live and have all your business in one country can be overwhelming and demanding. However, you can employ tax consultants to handle this for you and avoid the headaches that come with handling it yourself.

These consultants can help you assess if you qualify for cross-border taxing opportunities. They also give you advice and help to identify and resolve any unforeseen issues. Businesses that involve technology startups, as well as eCommerce and online entrepreneurs, are normally affected by this.

So as a Canadian company looking to raise capital in the US or participate in incubator programs, you must make adequate plans. To avoid getting a tax hit, you need to do your tax planning beforehand. This is by getting consultation and advice before you move across the border.

Ensure to talk to a cross-border financial or tax advisor and discuss your particular situation. These can include investments you own and businesses you have or plan to register. These also include personal property and how this will be affected if you move across the border.

Planning Your Tax Across The USA- Canada Borders

Tips On Effective Cross-border Tax Planning

There are a lot of things involved in a cross-border move. You may not have thought about how to manage your investment. Nonetheless, due to regulatory reasons, investment advisors are typically not licensed to oversee investments after crossing the border.

This can lead to your assets being frozen. To avoid this, you should meet with a cross-border advisor before making your move.

One of the advantages of cross-border tax planning is that you can avoid mistakes. This is by staying onside with the Inland Revenue Service (IRS). As a citizen of the US, working with a consultant will help you avoid IRS issues even if you move to Canada.

The complexities around a cross-border move increase if you own assets over a million dollars. Therefore, you need to know the options that are available to you to avoid a surprise tax hit by talking to a planner.

Furthermore, if you own an estate, you should avoid using a non-resident in whatever country you stay as the executor. This is crucial because the executor may be classed as non-resident and this can lead to double taxation for you.

To work with a cross-border tax planner, you can book a free consultation. You will be assessed based on your specific situation. The planner will understand what you need and provide you with the advice you need.

The cost of the plan will depend on a variety of factors. These will include the scope of the plan, the complexity of your circumstance, available information, objectives, etc. You can check out to find more information on how to go about this.


Moving across the US-Canadian border to live or do business comes with its challenges. One of these is how and where to file your tax. Thankfully, both countries have a treaty that allows you to pay your taxes in one place rather than in the two countries. To effectively take advantage of this, you should speak to experienced consultants so you can avoid any issues.

Article written by admin

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