US CANADA Cross-border business - BC Medical, Driver's Licences david ingram International non-resident cross border expert income tax service & immigration help estate family trust assistance expert preparation & immigration consultant, income trusts experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants Income Tax Convention Treaty. advice on bankruptcy expert US Canada Canadian American Mexican Income Tax help.

Subject:        Cross-border business
Expert:         taxman@centa.com
Date:           Thursday March 06, 2008
Time:           04:14 AM -0000

QUESTION:

I am a US citizen and newly-landed Canadian Permanent 
Resident in British Columbia, but I am also a full-time 
RV'er (i.e. I do not own property in either Canada OR the 
US).  I am starting up a business building websites for RV 
parks and corporate customers, but I'm not sure what I 
need to do in order to incorporate.

I will (hopefully) be doing business in both Canada (BC 
and AB) and the US (western states - WA, OR, CA, etc).  As 
a full-time RV'er, I can declare any US state as my "home" 
and setup mail to maintain residency.  Due to Nevada's 
lack of personal & corporate income tax, I thought that 
would be the best place to "move" so that I can minimize 
(1) the amount of tax being paid and (2) the number of 
tax returns I must file.

Do I need to also register the business somehow in BC?  
Or should I skip the incorporation in the US and just 
proceed with whatever is needed in BC?

I'm very confused and would greatly appreciate your 
assistance (free or paid)!

Thank you.

You are going to have an interesting life taxwise.

I am just going to give you a couple of hints because this is my busiest time of the year.  This email was rejected originally but when the one that the system gave me to answer was totally inappropriate, I went looking for another one in the rejected questions.

1.    To keep your PR card alive, you must be in Canada for 24 out of every 60 months and be able to prove it.  In general that means just a day or two short of 5 months a year. .

2.   To be eligilbe for BC medical, you must be able to prove you have been sleeping in BC more than 183 days a year.

3,.    If you were just here for 150 days a year it would keep your PR card alive but you would not qualify for either BC Medical or Alberta Medical.  However, at that point, if you made Washington your state of residence, you would not be taxable in Canada on your world income Under ARTICLE IV OF THE US CANADA Income Tax Convention (treaty).  It would be simple enough to pay Canadian tax on the income earned in Canada and then claim a foreign tax credit on US form 1116 on your US 1040.

Note that to qualify for Alberta or BDC medical, you must sleep in 'that' province more than 183 days.  3 months in BC, 2 months in Alberta and a month in Ontario does not qualify for ANY Canadian provincial medical plan.  You plan on staying on the west coast.  If you were on the east coast and doing Ontario and souothern states such as Georgia, South Carolina and Florida, you could qualify for Ontario Medical by being there only 154 days and keep your PR card alive.

Under these circumstances, you should be importing the RV to Canada under Settler's effects so that it is legal here.  Otherwise, you are in danger of having an accident and not being insured.  If you are here working with PR status, BC requires you to have a BC driver's licence and your vehicle must be registeered in BC as well.  You can always take the vehicle back to the US.  Have an accident 35 days after you are here working at the XXX RV site and you could end up with a million dollar claim agaisnt you for no insurance.  I know whereof I speak.  In 1981, I loaned my immaculate red on white 76 Cadillac Convertilbe to a lady i was in love with at the time.  She destroyed the car in a head on collision with a truck. At this time, it came to light that even though she had been working in BC for six months, she only had an Alberta Driver's licence.  I lost the car and was only lucky that the other vehicle's driver was held responsible for half the accident.  (he was English and late at night turned left 'into' the approaching lane as the lady came out of a street in front of him.  If he had turned right as a North American driver would, there would be no accident.  However, it was also ruled that she had entered the intersection without due care and attention.)

I also drive a 33 foot motorhome.  It has been in 40 states and all ten provinces, Labrador, the Yukon Territories and all the way to Homer and Chicken Alaska.  No accidents until August 2001 when a truck going  in the same direction was turning right at an intersection in front of me. My wife was following me and I will tell you that I could coast downhill from my house to the corner this accident took place at.  I was not being careful and was looking in my rearview to see where my wife was (that was lucky because i knew no one was behind me).  When I looked back the little 1/2 ton older Mazda pickup had stopped right in front of me for no obvious reason.  I yarded the motorhome to the left (no one was there, remember) and just touched him.  There was 6 foot scratch in the paint and a protruding hinge damaged but no dent in the side, just a paint scratch and I was going 30 miles an hour.  Then becasue my rear bumper stuck out about two inches it took out the pickup's tail light making a starburst (as described by my wife) of red and orange plastic.  Oh yes, there was an RCMP on the corner who did not even realize it had happened because he drove away which was lucky for the driver of the truck.  Even though it was clearly my fault, it turned out the driver did not have  a driver's licence.  I gave him $200 fro a new taillight and we all went on our way.  The Uncle phoned me and thanked me for paying for the tail-light and everyone was happy. All I was thinking is that if I had looked back 1 second later, i could easily have killed the kid with my 16,900 pound motorhome driving over top of that itty bitty truck.

Just explaining how easy it is to get into a  silly accident with serious consequences and why you need to deal with the driver's licence issue if you are 'working' in the jurisdiction..

You need to talk to someone like me.  I charge $450.00 an hour by phone or in person.  $472.50 with GST if you are on the phone in Canada.  You can also come to my home office if in Canada.

It is a difficult situation though if you are here for 4 months and then going back to the US.  California will allow you to use the BC licence and registration if you can prove a residential address tie to BC but you will not have one with the RV. No legiti,mate out of state address and you are working in California, requires a California driver's licence and registration within 10 days. Every state has a different set of rules as provided further on.  In an RV as a visitor, you do not need to change licence or registration.  However, Washington DC requires you to either register or apply and get a non-resident permit within 30 days.

One last thing.  Whatever you do, don't incorporate anywhere unless you just love paying accountants and lawyers for cross border work.  I would likely charge you an extra $4,000 per year if you came in to me with a corporation in your circumstances.

I am going to stop here and include some older emails which should help.
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david ingram replies:

Your situatiion is what we are set up to look after.  

After coming to Canada, your telecommuting income is taxable first in Canada and secondly in the US. 

Your car licence should have been changed within 30 days and your driver's licences should have been changed within 90 days if you came to Canada as landed immigrants (Permanent Residents).  If you came on student visas, that situation might be different. HOWEVER,  you then MUST contact ICBC's Specialty Licencing Unit within '30' days at 1(800)-665-4336 or (604) 443-4624 to obtain a non-resident permit.  This is identical to the rules for being in Washington DC as a matter of interest and there are likely 30 different sets of rules in North America with each province and state being different.

This older question might help a bit as well.


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david ingram replies:

Assuming that you are doing all your work in Canada and are paying your proper tax to Canada, there will be no tax liability to the USA on those earnings.

Therefore, it does not make any sense that the company would deduct any US tax whatsoever. 

Canada is a sovereign nation with a tax treaty with the United States.  Even though a US citizen is required to file a US tax return no matter whee they live, Article IV(2)(a)(b)(c)and (d) of the US/Canada Income Tax Convention spell out where you pay tax on your world income first and it would have you pay tax on your world income to Canada first as described..

As a US citizen, you are entitled to foreign tax credits and an earned income exemption of up to $85,700 in 2007 ($82,400 in 2006, 80,000 in 2005) against the income earned in Canada.  

You would calculate and pay your Canadian tax first and then report it again on your US 1040. 

Instead of form 2555, you would claim a foreign tax credit for the tax paid to Canada on US form 1116 if you have children, Because if you have children, you can file form 8812 and claim a refundable tax credit for up to $1,000 per child. 

But your question was about the US ompany deducting US Federal and maybe even state tax.

There is no onus on Your US employer to deduct any taxes from you whatsoever unless you have been transferred to Canada for a period of five years of less.  If that is the case, they can write to the Canada Pension Plan and ask for permission to not deduct CPP and continue paying (and deducting) FICA but that is all.  If you are working in Canada, a sovereign nation, they either have to dedcut Canadian Income Tax, Provincial Income Tax, CPP and EI, or pay you as a contract employee with no deductions by means of a 1099.

An analogy would be if you worked and lived in California and your company was in Chicago, they would NOT deduct Illinois state tax.  If they did, you would be all over them saying "I work and live in California, why would you deduct Illinois Tax, what are you thinking". You might even be a little sarcastic and cast aspersions on the intelligence of the HR person who would deduct Illinois when you live and work in California (or Ohio, Minnesota, Oregon or Rhode Island for that matter).

(On the other hand, a Tennessee person telecommuting to New York WAS taxed New York State Tax last year but he was also physically working one week a month in New York).

If you have been in Canada over a year and got all your US tax back in 2006, you can even use line 7 of a W4 form to have your employer stop making deductions. 

Best and easiest would be for you to become a self employed service and bill them on a 1099 basis. In this case, they shoud pay you the amount of their payroll taxes and holiday and frigne benefits extra.

The following was the topic of a 5.5 hour semianr I gave last Sunday.

US CITIZENS OR GREEN CARD HOLDERS IN CANADA AND CANADIANS IN THE US - FOREIGN ACCOUNT REPORTING REQUIREMENTS

 I want to make it clear that what you are about to read applies to Americans who have never lived in the United States, as well as those who have emigrated from the U.S. to other countries (including CANADA).

 Even if they have no U.S. income now, and they have never had one cent of U.S. income in their lives, United States citizens are required to file a United States income tax return (reporting their world income) no matter where they live in the world if they have income from any source (including non-taxable internal earnings in an RRSP). There are severe penalties for failing to file an annual U.S. return. In one case, $190,000 of tax and penalties were levied against a U.S. citizen living in Vancouver, and shows that the IRS can go back to 1986 (or even 1967) with impunity. In this case, the gentleman has lived in Canada since 1986, and was told by professionals that he did not have to file United States returns. The IRS found him after he lost his U.S. passport in a robbery and had to get it renewed.

And, in case you are thinking this is a wealthy man who will just have to "pay up"; the person involved averaged less than $15,000 Canadian per year of earnings from employment for the years 1986 to 1995. This bill could have wiped him out for life, and HE LOST MONEY. A Canadian professional accountant told him explicitly that he did not have to file U.S. tax returns because he had lost money and he was living in Canada. It is true that MOST Canadians do not have to file Canadian returns if they move to the U.S., or Australia, or Germany, etc. BUT! ALL AMERICANS do have to keep filing no matter where they live.

If you ARE a U.S. citizen, and have not been filing your U.S. returns, you should get a copy of my November, 1993 CEN-TAPEDE and use the information in that newsletter to file your returns retroactively. Find that newsletter at www.centa.com in the top left hand box.

What else does an American in Canada (or Paris for that matter) have to worry about? 

1. Taxation of the Family Residence            Americans come to Canada and are amazed that the family home in Canada is income tax free. Unfortunately for the American, the sale of a Canadian (or Australian, etc.) family house is still reportable by the American on their annual 1040 income tax return ($250,000 US per person is exempt but should be reported and exempted.

2. Gift Tax (if this applies to you, read my February 1994 newsletter)     After selling the family house (which they think is tax free) it is not unusual for an American living in Canada to give their children some of the proceeds and buy a less expensive house or condo for themselves. A U.S. citizen can only give a child up to $12,000 a year before incurring U.S. gift tax. The February, 94 newsletter has all the rates, but suffice it to say that if U.S. mom gives her daughter $22,000 U.S. in one year, MOM OWES gift tax of $1,800 and has to file a U.S. 709 gift tax return.

 You might ask, "How will the IRS find out?" Easy! The daughter will go across the U.S. border with her new car, and a customs/IRS agent will ask her where she got the money to buy the car. Or daughter will buy a Hawaii condo with the money and when she is audited on the sale and asked "where did the money come from to buy the condo?" she will have to answer that "Mom gave it to her."

 This situation took place in my office the week I wrote this. I spent 21 hours over a 3 day period in a tax audit with a young couple, the tax department auditor, and a 1 1/2 year old tyke. The auditor spent 4 hours asking how much they spent for beer, diapers, clothing, rent, gas, travel, and Xmas gifts, etc., IN DETAIL back as far as 1986 for some items. The auditor was doing a "source and application of funds" audit and was particularly concerned with how much money the husband's father had given them, and just as importantly, when? After thirty-one years in the tax business, I still could not figure out whether the auditor was after the 35 year old "kids," or whether the auditor was after the father. I am inclined to think the auditor was after "dad."

 The auditor also mentioned the "close" cooperation which now exists between customs, tax, and immigration. She can get whatever she wants from any of the departments and we are seeing these ourselves almost daily. In addition, the U.S. and Canadian tax authorities are now proactive in their reporting. If a Canadian auditor is dealing with someone with an American identity or income (rental, stock, director's fees, etc.) the Canadian auditor MUST now automatically report it to the U.S. and vice versa because of the U.S. / CANADA Tax Treaty signed on November 8, 1995.

 3. Ownership of Foreign Companies (Also see September 94 newsletter)           If a U.S. citizen owns 10% or more of a foreign corporation, he or she has to file some rather rigorous forms with their 1040 tax return. Basically, Form 5471 requires them to recalculate the company's profits using a Dec 31 year end, and put their resulting share of profits (even if not received) on their 1040 return. Penalties for failure to file this form can add up at (are you ready for this?) $10,000 every 30 days late up to a maximum of $50,000. This can be even more significant if you own 4 Canadian companies. The hard part here is for the American to realize that his Canadian Company is a foreign company to the U.S. This, of course, also applies to A Canadian who moves to the USA and still owns shares in a family corporation in Canada – Usually dad gave them the shares.

 4. Taxation of "Tax Free" Dividends        This is always a heart breaking moment. A Canadian accountant has spent hours explaining to "hubby" why his wife should have "X" number of shares in his company and how beneficial it is because she can take out $30,000 (varies)  of actual dividends and not have to pay any tax to Canada because of Canada's dividend tax credit. They are totally dismayed and the accountant mortified to find out that the dividends were 100% taxable on her U.S. return, and that the U.S. does not recognize the Canadian dividend tax credit. In addition, she is also liable to file the 5471 forms mentioned in "3" above or suffer the penalties.  And, she must file the TDF 90-22.1 mentioned in 5 below.

 5. Reporting of Foreign (Canadian) Accounts.      U.S. citizens with signing authority on foreign financial accounts which total more than $10,000 U.S. at any one time in a year must report the details of ALL the accounts to the U.S. Treasury in Detroit on a form TDF 90-22.1. Failure to file this "simple little form" carries a penalty of up to $500,000 PLUS 5 years in jail. Note that this form is filed with TREASURY in Detroit, NOT WITH the IRS. See the bottom of Schedule B of your 1040. And, of course, this applies in spades to a Canadian in the US.  As of about June 17, 2007, I am informed that the min penalty will be $10,000 for failure to file this form which is mentioned in the last two questions on the bottom of schedule B.

 Notice that this TDF 90 form requires details of accounts on which you have a signing authority. It does not need to be your account, or contain your money or securities. If you are a nurse and sign on the nurse's union account, you must report the details asked for on the form TDF 90. If you are a cub leader or a signing officer for your Kinsmen account or a deacon at your church and sign the church's account, you must give the details to the Department of the Treasury in Detroit. This also applies to RRSP accounts which are even more serious because they are also classified as "FOREIGN TRUSTS".  http://www.irs.gov/pub/irs-pdf/f90221.pdf

 6. Annual Taxation of RRSP Accounts      NOTE that ANY U.S. CITIZEN who owns a CANADIAN RRSP (which is a foreign trust under U.S. law) is liable for a fine of up to $500,000 U.S. PLUS 5 years in jail if they do not report the existence of the account to the Treasury Department as explained in item "5".

 In addition, there are further penalties for failing to report the RRSP earnings on an annual basis to the IRS. A new form 8891 was provided in 2004.  On an annual basis, you must report the following to the IRS:

1. The name of the financial institution holding the RRSP;

2. The total contributions made up to Dec 31, 2006 including rollovers;

3. The earnings (interest, dividends, capital gains) in 2006 (or any other relevant year) and

4. The balance in the account as of (at) Dec 31, 2006 or other relevant year.

5.  Any Withdrawals made in 2006 (or any other year)

Note that the internal earnings of the RRSP MUST be reported on the U.S. 1040 income tax return. The RRSP earnings can only be exempted AFTER reporting them under the US/Canada Tax Treaty. Note that residents of every country other than Canada must file form 3520 / 3520A.  http://www.irs.gov/pub/irs-pdf/f8891.pdf. Failure to file the 8891 is 35% of the principal plus 5% for each year not reported.  OUCH!!

7. Social Security Tax on Canadian Self Employed Earnings      If you are earning money in Canada, you are liable to pay U.S. FICA taxes of 15.3% on up to $94,200 of  earnings (2.9% over 94,200) UNLESS you file an exemption request under the US / CANADA Tax Treaty or Article V of the CANADA / US Social Security Agreement 

8. All Canadian Wages or Self Employed Income is Taxable in the U.S.  There is an "up to $82,400" U.S. exemption but to get the exemption, you HAVE to file the return and submit a form 2555 to claim the exemption. If you do not fill in the exemption form, your Canadian earnings are taxable on a U.S. return and you could end up with double taxation if you do not come forward voluntarily. Note though, that if the American in Canada has children, he or she can claim up to $1,000 per child refundable tax credit by filling in form 8812 and 1116 instead of form 2555.

Canadians performing services in the United States, and in 43 of the states in particular, are required to file the respective state return(s) and a US federal 1040NR or 1040 income tax return, even if their remuneration was paid from Canada.  This applies, but is not limited to:

*   Executives attending meetings in the US and, in particular, California,

*   Service technicians servicing Canadian products under warranty,

* Salespeople selling Canadian products in the US,

* Journalists (e.g. covering Canucks Hockey games, INDY races or O J Simpson trial),

* Horse trainers, race car mechanics

The above are exempt from tax up to $10,000 of earned income but the taxpayer must file returns to prove his or her exemption per Article XV. If you earned over $10,000 in the US, US taxation depends on where the employer gets its ultimate tax deduction for the wages paid out. If you are in the US more than 183 days, you are usually taxable on your world income.

**                Entertainers, actors, musicians, performers,

**                Professional athletes, race car drivers, jockeys.

The above are exempt from tax up to $15,000 in gross earned income (which includes travel expenses) but still have to file the return to prove their exemption under Article XVI.

*** Transport Employees, Truckers, Flight Attendants, Pilots if over $15,000.

Transportation employees are exempt from tax in most cases even if in the US for more than 183 days, if they are exercising their regular employment.  They must, however, file the tax return to exempt the income.

Canadians with US rental properties must file a 1040NR with schedules E and 4562 and the relevant state tax if in a taxing state. The penalty for failure to file the 1040NR EVEN IF YOU ARE LOSING MONEY is $1,000 to $10,000 per owner plus 30% of the Gross Rent with no expenses allowed.

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The following includes the rules for driver's licences in all 50 states plus Washington, DC.
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Hello David:

I am a Canadian citizen working in USA through TN visa since June 2004. My wife, 3 kids (2 American one Canadian) are staying with me in USA. My wife is a landed immigrant and not a  Canadian citizen yet. We have no property in Canada but do have active credit cards, bank account, diving license, medical card. I have applied for H1B and like to say have no intention going back but I guess have no choice due to the restriction on the TN visa forcing me to leave the country within 2 weeks in case of a job loss. I have not filed my taxes to Canada since came to USA but continuously filing the taxes for my wife as zero income in order to make her immigrant status active. taxman@centa.com

Before asking question, let me confess that have very little knowledge of taxing and forgive me if even the question was wrong.

1). Under above circumstances, do u think I have a choice to cutoff my links to Canada by cancelling the credit cards, license and file taxes for my wife separately.

2). If I made a mistake by not filling taxes in Canada,
     -    would that be big loss to me.
     -    how can I correct that mistake
     -    what would be your fee to help me out.
   
3). If I make a $900000 yearly as married and pay taxes in both countries, how do you think roughly tax breakup would be like 30 /  5 percent. Is there a formulla to calculate this roughly.

Thank you for your help and time David.

Regards.


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david ingram replies:

Your wife's PR status remains valid as long as she is living with a Canadian citizen (you) while out of Canada.  Your American born children are also Canadian.  You should register their out of country birth as soon as possible at http://www.cic.gc.ca/english/information/applications/retain.asp

1.   Under Article IV of the US Canada Income Tax Convention, you are truly tax exempt in Canada.  However, your Canadian health card is invalid and it would be fraud to use it.  For it to be valid, any holder has to physically sleep in their home province more than 183 days a year although Ontario is only 153 nights.  Most (not all) states take away your provincial drivers licence when you get the new state licence.  California, for instance, requires you to get a California licence within 10 days if you are living and working there. Some states are 30 days. Therefore, you or your wife are likely driving illegally with no car insurance.

California requires you to get a CA licence in 10 days and surrender your out of state licence.

Washington, DC for instance requires you to have a DC licence in 30 days and to surrender your out of state licence as follows:

Converting an Out-of-State License

A licensed driver who moves to the District from another jurisdiction is required to convert their valid out-of-state driver's license to a DC driver's license if residing in DC for more than 30 days. A DC driver's license is valid for up to five years for US citizens and may vary for non-US citizens depending on visa classification. The written test is not required if your prior license is valid or has not been expired for more than 90 days. The road test is not required if your prior license is valid or has not been expired for more than 180 days.

The former license must be relinquished to obtain a DC License. If you do not have your out-of-state license in your possession, we will accept a certified driving record (issued within the last 30 days) reflecting the license is in good standing and not expired for more than 90 days.

Non-US Citizens (foreign nationals) may be eligible for a DC driver’s license if they meet eligibility requirements.

The Patriot Act, Public Law 108-458, National Intelligence Reform Act of 2004 does NOT allow for social security numbers to be displayed on driver licenses or identification cards.

Requirements

You are a resident of DC

You have no outstanding debts to the District of Columbia or unpaid fines for moving traffic violations in other jurisdictions

You must provide documents from all of the following categories:

    - Proof of Identity
    - Proof of Social Security Number
    - Proof of Current Residency
    - Proof of Ability to Drive

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Realize that if you are in an accident driving with a Canadian licence and have been living in a state for four years, you are driving without a licence and your insurance is invalid.  This cost one our clients in Texas over $300,000 two years ago when he was there for four years driving with his BC driver's licence.

You can access the rules for every state's drivers licences and vehicle registration rules at:

 http://www.usa.gov/Topics/Motor_Vehicles.shtml

The District of Columbia also requires a car there for more than 30 days to get a permit and provide proof of your bone fide residence somewhere else as follows:

Registration of Out-of-State Automobiles (ROSA) in DC

What is ROSA?

ROSA stands for registration of out of state automobiles. Automobiles housed in the District of Columbia for 30 consecutive days are required to be registered and display a valid DC inspection sticker and tags when parked or operated on public space. The Metropolitan Police Department monitors residential areas for the presence of automobiles not in compliance with DC registration requirements. If an automobile has been observed a second time within a thirty-day period, a warning notice may be issued indicating the automobile is eligible for the issuance of a citation and/or impoundment unless one of the following actions has been taken.

• Recurring visitor (frequent short term visits) report to a DMV service location and prove non-residency by presenting an original lease, deed or mortgage statement or a utility bill no more than 60-days old. The documents must be in the name of the registered owner of the vehicle. Copy of out-of-state license and vehicle registration are also required. ROSA parking exemption is good for a 180-day period.
• Temporary residents (more than 30 days) must register their vehicles or apply for the reciprocity permit.

Note: Bring the warning notice posted to your automobile with you.

What if I don’t have a lease, deed or mortgage in my name?

You must provide all of the following:

• A statement from the homeowner attesting to the fact that you reside at their home.
• A copy of a current utility bill (60 days or less) in the homeowner's name.
• A copy of the homeowner's drivers license or non-drivers identification.
  

What happens once I receive the ROSA exemption?

Once you receive an exemption from ROSA, your vehicle license tag number will be entered into the District’s ticket management system. The exemption applies to ROSA enforcement only. All other parking regulations apply. You will receive a receipt for your records indicating the exemption expiration date (180 days).

What happens if I get a ticket for failure to secure DC tags?

You may contest the ticket by mail or in person. You should present the same documents presented to receive the ROSA exemption.

What happens after the 180-day exemption period?

If you receive another warning notice, you may repeat the exemption process above.

Note: ROSA is not a parking permit, and it does NOT exempt a vehicle from DC parking regulations.

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I am putting this here to show what must be done is one particular jurisdiction. 

California is 10 days for a driver's licence and 20 days to change the vehicle licence after taking a job in California. 

And yet, at least once a week, I have someone phone me who has been in California for a year and has not bothered changing their plates or getting a California Driver's licence (license) because they haven't had time, or someone said they did not have to or their car would not pass California Emission rules, or, or, or.  Realize that they have no insurance in this situation.

Every province has different rules as well.   As one example, your  BC registration (and insurance of course) is  invalid after  60 days when you move to another jurisdiction to take a job whether it is California or any other state or province.

Students, on the other hand can keep their Canadian provincial medical plan and provincial driver's licence and provincial car registration for up to five years anywhere else provided they do not take a job in that jurisdiction unless the job is part of the University course/instruction.

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Back to your question # 2

2). If I made a mistake by not filling taxes in Canada,
     -    would that be big loss to me.
     -    how can I correct that mistake
     -    what would be your fee to help me out.
   
3). If I make a $900000 yearly as married and pay taxes in both countries, how do you think roughly tax breakup would be like 30 /  5 percent. Is there a formulla to calculate this roughly.
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david ingram replies:

2.    You should have notified your bank that you are a non-resident and have them deduct 10% tax on any interest they are paying you.  If you havre not done so, you should send the CRA 10% of any interest you have received under Article XI of the US/Canada Treaty.  You must also report any interest or dividends on schedule B of your US return and you MUST file schedule B if you have any foreign accounts.  If you have an RRSP, you have to file US form 8891 (question 8 on Schedule B)  If your Canadian accounts total over $10,000 or if your Canadian accounts were $6,000 and you or your wife have another $5,000 in your original or your wife's original home country, you must also fill out forms TDF 90-22.1 for each foreign account (question 7 on Schedule B).  Minimum penalty for not filling out form TDF 90 if you need to is $10,000.    I have had a 105 year old lady get a $10,000 penalty for not filing. (The maximum penalty is $500,000 plus up to 5 years in jail).

3.   You have no responsibility to file in Canada on your US earnings.  I have spent too much time on this question already.  (over an hour when I charge $450.00 an hour.

If you want more, you should book an hour appointment and expect to pay me $450 by credit card, etc.  In general, I am now quoting $900 to $3,000 for current US Canada Tax returns, less for  catch ups.  A more specific  price suggrestion can be found further on.

The question was rejected by the system along with 150 others and I just happened to look at it as I was watching the Clinton - Obama results in Wisconsin.  I answered it because of the chance to make my point about the drivers licences (licenses), something you did not even consider.

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