How does investing affect the way you do taxes?

Investing may turn into a gamble and can be intimidating when you think about the tax rules at hand. However, you will get to earn a lot if you succeed on selling your stock investments at a good price if you know the ways to reduce the tax rates the best way possible, with the help of cross border tax specialists if you plan on investing between US and Canada.


So how exactly is an investment income taxed? To simply put, it’s the same manner as other earned income. The only struggle is to calculate the volume of investment growth that is supposed to be taxed mainly because not all of the growth will be taxed at all times. You may get a tax break if you invest, depending on the account type and the savings goal. The tax advantaged accounts such as health savings and retirement savings can grant you tax breaks. However, tax advantages may still differ depending on each accounts. That’s a different story.

If you still won’t sell your stocks, paying taxes won’t be applicable to you even if the value of your stocks rise or fall. You only pay taxes the moment you sell. Taxes are handled differently for retirement plans and mutual funds, so it won’t be an issue paying taxes to these accounts. Keep in mind that retirement accounts should be separated from other investments for each accounts have different set of rules. If you plan on investing that may require you to go in between US and Canada, it’s best to seek advice from a cross border tax specialist for their cross border tax services to help control the taxes of your investments so it will grow.

It’s also best to ask specialists for their cross border tax services once you get to sell an investment to help you have the best strategies to keep your tax rates as low as it can possibly can.


Determining The US and Canadian Tax Law

To eliminate or to reduce double taxation, the United States has entered into tax treaties with many countries. One of which is Canada. Due to the proximity of this neighboring country, the US-Canada Tax Treaty was signed in 1980 and has since been amended by five protocols. To provide relief from taxation in both the United States and Canada for income earned by Canadians is one of the aims of the US-Canada Treaty. To expound, US citizens and Canadian residents are taxed on their world income. If not for the treaty, Canadians would pay the US tax on their US income to the Internal Revenue (IRS) and pay again to the Canada Revenue Agency (CRA).

This also works for US residents working in Canada. Whether in Canada or in the United States, both US citizens and Canadian residents report their foreign income regardless where they file a tax return.Determining the US and Canadian Tax law can be challenging which is why getting cross border tax services is a substantial decision. A professional advice from cross border tax services can be acted upon concerning Canadian and United States tax principles.

The treaty ensures that a resident of one country is taxed by each of the two countries on the same income in the same year. Cross border tax services is important for a person who lives in one country and either commutes to work in the other country every day or moves to the other country temporarily to work for a limited period of time. He needs to be able to comply with his tax obligations.

A cross border tax specialist will be able to explain how individuals are taxed. If you are US “green card holder” or a US citizen, pursuant to US law, your income is taxed on a worldwide basis no matter where you reside. Canada, on the other hand, does not tax on a citizenship basis but rather on a residency basis. There are cases when a US citizen who is resident in Canada can be subjected to adverse tax consequences if their affairs are not planned carefully. This is where a cross border tax specialist comes in. A cross border tax specialist can be your asset in assessing your status and how you should file your tax obligations.

Penalties On Overdue Tax Returns

A cross border tax specialist can help you assess penalties on overdue tax returns in regard to cross-border tax laws. From a cross border tax specialist, Canadian residents who gain income from the United States can be informed of the rules for filing taxes and how to lessen their US withholding taxes. With the signing of the US-Canada Treaty, residents from US and Canada who work in the countries mentioned are exempted from double taxation.

The US-Canada Treaty is beneficial to Canadians with income earned in the United States because it prevents amounts from being withheld for taxes. They are asked to accomplished a form called, W-8BEN, wherein you promise to declare your US income on your Canadian tax return.

According to Canada Revenue Agency (CRA), on top of prescribed interest rates for balances owing, the CRA levies late filing fees against you. You can have your late filing fees waived, in some cases, but you have to make an application in writing by completing From RC4288 or Request for Taxpayer Relief.

You need to keep in mind, that there’s a distinct difference between paying your taxes late and filing your taxes late. You will be subject to interest if you file your taxes on time but don’t have the cash to pay the balance owing. However, you’ll automatically be subjected to a late filing penalty in addition to any interest on the tax balance owing, if you miss the filing deadline and file late. It is a real nightmare when you get a late filing penalty when you file your taxes late.

Cross border tax services can take a look on how you file common tax returns. If you know you’re going to be late on your tax return, make sure to get a professional advice from cross border tax services. It may be best to take a guess on how much you owe and how you pay your tax returns before the deadline. To avoid late filing penalty or paying interest, do not file late.

With assistance from a cross border tax specialist, you can be assured that your tax return is prepared accurately and professionally.

How To Avoid Double Taxation

Despite the US-Canada Treaty Convention, where citizens from each country are protected from double taxation when working at another country, there are still scenarios where you need to know how to avoid this “double taxation”. Finding a competent and efficient cross border tax specialist is essential in determining this situation.

The US Internal Revenue Service (IRS) has a complicated way of determining how long a Canadian stay in the US without paying US taxes. A cross border tax services can do a calculation using the IRS formula called the “substantial presence test”.

The “substantial presence test,” determines whether you have been in the US long enough to be considered a US resident for tax purposes. They calculate the sum as follows:

  • Each day in the US in the current calendar year counts as one day
  • Each day in the US prior year counts as one-third of a day
  • Each day in the US in the year before that counts as one-sixth of a day

The IRS determines the numbers of days a Canadian citizen have spent in the US over a three-year span, using this unusual formula. If the sum of those three numbers totals 183 or more, the IRS may insist that you file a US tax return.

Both US and Canada provide foreign tax credit to prevent double taxation. A US citizen who is subjected to US taxation and have paid tax to Canada, in general, can claim a foreign tax credit to offset his US tax on that income. His credit cannot be more than the tax he has paid in Canada. Investment income, however, is not eligible for foreign earned income exclusion. If a Canadian citizen receive income for personal services performed in both US and Canada, a cross border specialist advises that it is a good idea to keep a complete record of work days in each country.

When you are looking for cross border services, make sure that they can determine US and Canada foreign tax credit purposes. It is your responsibility to disclose specific details of treaty benefits on your US tax return if you want to use the US-Canada Treaty to reduce your US taxes.

A cross border tax specialist can assist you in avoiding double taxation. As long as you comply with the legal requirements and submit your documents in time.

Important Points to rapidly resell your house with cross border tax services

The thought of retailing your home only can provide you inconveniences with the newspaper works and conditions, particularly if you will sell a residence what your location is considered an ‘alien citizen’. If you’re a Canadian resident and you will be selling your property situated in the United States, you may want some advice about an accountant for some cross border tax services to obtain through with all the current dealings you will face after selling your home.

If your property is in U.S, then which means that you have entitlement to a non-resident withholding duty of 10% of the product sales price. So you may want to consider requesting a good accountant to discover the best options in offering your house.

First off, you will need strategies how you can be able to sell with a right time period you have decided. You might consider your online marketing strategy to attract a lot of audience that’ll be enthusiastic about your home. A full great deal of home vendors will allot their offering period in three months or less. Others have a tendency to sell their home in a shorter period due to relocation or job opportunity reasons. However, the reason why it’ll be super beneficial that you can produce selling strategies beforehand to keep your bids going.

Among the good stuff in getting an accountant is they can handle your cross border tax services. Signifying you will be helped by them cope with your documents to a US tax return. Also consider that if you can have a helping hand from your accountant, you must still think about your property of how much the price is really and consider asking what they’ll plan after purchasing the home. If it’ll be under $300,000 as well as your buyer shall use the house as an individual residence, in that case your withholding necessity will be taken out.

Likely to your marketing strategies; what you shall need to create are flyers. A photographer must be held by it on your front home and enough information that can attract buyers. You may feel that flyers are inefficient tools of marketing because it is highly overlooked, but actually it comes in useful way. It is important to use in the flyer the facts about your property like the volume of bedrooms and bathrooms, what size the homely house is square feet, garage information and other activities that you can consider to appeal buyers. You may cross their flyers out during an open up the house and town so prospect clients can have something to make reference to and when your neighborhood friends can send friends or family that could be interested.

Another basic thing to take into account is your web marketing strategy. You have to be sure you will be in a position to post the photographs of your property outside and inside to have the ability to let your web viewers have a virtual tour of your house. Having a video tutorial as paperwork is an advantage to your web marketing strategy. To upload these on your social media accounts or post them as one of your site articles, if you have one and tell them that your home is on the market. It’s important that you will not put private information such as your complete address or contact information. Just submitting your email as the contact information will do to have the ability to have a dialogue with your audience. A lot of folks purchase almost anything and everything these days on the internet so it will be of great profit for you if you shall post an advertising on the internet.

You additionally have to contact an agent to put on your home on the Multiple Service List (MLS). The MLS can be an online data source for homes that are on sales. Employing a realtor may bring you completely interested purchasers and can be used to purchase your home. Your buyers will come anywhere but a buyer suggested by a realtor is more unfailing.

Finally, make sure never to skip control your documents for taxes. US and Canadian fees may be unique, but difficult, so telephone up an tax accountant that can provide you cross boundary taxes services such as tips and advises on what you ought to know and what paperwork you will need to process when you find a buyer that will purchase your home in United States.

Important Points to Filing US Taxes in Canada

Most countries in the global world impose fees and the people who are residents of the said country. After the person leaves the United States and work somewhere else, they are automatically exempted from paying taxes or even declaring their worldwide income comparable to that country. Oddly, however, the U.S. has another type of legislations on taxation. No matter where a US resident is living or working, they’re still necessary to declare his / her gross annual worldwide income and can still pay U.S. fees.

For countries with that your U.S. has a particular taxation contract, such as Canada, this isn’t the entire circumstance. Without such agreement, an individual can be at the mercy of double taxation which is more of a burden when compared to a responsibility. In article XXIV of the Canada-US. The TAX Convention of 1980, guidelines regulating taxation on various circumstances where Canada and US may state their taxes to the same residence or income layout. These procedures are present from people being taxed double entirely.

When Processing US fees in Canada, you need to consider the next scenarios.

If you’re a U.S. resident and is living in Canada, you might be exempted from paying U.S. fees for your earnings earned from your projects in Canada. To become an everlasting citizen of Canada, you have to reside for at least five years in Canada. Although the word used is long lasting, your Canadian residency position is not long term. If you escape Canada for a certain time frame, you will eventually lose residency and you’ll have to reapply. In this full case, you lose your U.S. taxes exempted status. More seriously, you could conclude paying two fees.

If you’re a U.S. resident and your home is outside Canada, you might or may well not be exempted from paying Canadian taxes depending on the situation. If you’re working within Canada and is also earning from a Canadian company, you are destined to pay Canadian fees then. However, if you will work for a U.S. company which is situated in Canada, after that you can be exempted from paying Canadian fees.

The taxation guidelines that govern this have tight procedures and requirements. Failure to adhere to certain requirements can bring about a person being taxed twice.

There are a complete lot of companies offering assistance for filing US taxes in Canada. They employ experts and legal representatives who are knowledgeable and experienced in the field. If in doubt, it will always be smart to talk to with these businesses or enlist their services until you get a grasp of the complete process. The fees each country can impose, when enforced at exactly the same time, can be crippling economically. The taxation rules do not only involve taxes for income earned within Canada. In addition, it entails business and institutions in Canada. Running a business and being taxed is damaging.

Although the guidelines can just about be summed up to the conditions mentioned previously, it could differ at hook difference using details. Enlisting an established tax filing service is your best option for those without experience in filing US taxes in Canada yet.

Your Guide to Filing US Taxes in Canada

Filing US Taxes From Canada

Most countries in the world impose taxes only to citizens who are residents of the said country. Once the person leaves the country and work somewhere else, he or she is automatically exempted from paying taxes or even declaring their worldwide income to that country. Continue reading

Tax problems with your inheritance

aptaxgroup - Tax problems with your inheritance
source: aptaxgroup


When someone passes away, it’s unfortunately common for their estate to include some messy tax problems. Unless the individual or their family is on the ball and has been taking proper care of their taxes, they might be leaving behind quite a headache.

There are a few common scenarios where family members are left to deal with tax chaos after their loved one has passed away. Most of the time, the issue is a result of a lack of tax knowledge and can be completely avoided. Some of these tax problems exist due to:

  1. Unpaid taxes– If someone has experienced a long illness before their death, they may have been neglecting their taxes for multiple years. The estate’s executor will be responsible for completing the required forms and making sure that the deceased’s taxes are up-to-date.
  2. Hidden funds or assets– While it sounds like a pleasant surprise to discover that a relative had an overseas bank account you didn’t know about, you might be less than enthused to learn that they had also been neglecting to share that information with the IRS or CRA and they owe taxes on that money.

No one enjoys talking with loved ones about a time when they are no longer around, but making sure that their (and your) taxes are in order can make a considerable difference in the future.

The first step is to ensure that you and your loved ones have an accountant you trust to help you navigate your current tax situation. Your accountant should also know about your plans in case of death. He/she will be able to give you information about the taxes your loved ones will have to pay on their inheritance and will help you to understand exactly what you’re leaving behind.

The Chicago Tribune recently posted about potential tax problems with an inheritance and looked to Douglas Rothermich, vice president of wealth planning strategies at TIIAA-CRF for his perspective. “Most families don’t want to let assets blow up their kids financially or create a wedge within the family,” he said. “It’s really important that older people planning their affairs think it through ahead of time so their loved ones don’t inherit a tax mess.”


Back to School Tax Credits

Graceful female student
source: aptaxgroup

As the leaves start to fall and students start to dread the approaching school year, life gets inescapably busy. The summer always seems to fly by and when September hits, parents of post-secondary students find themselves frantically moving their kids into dorms and shelling out cash for textbooks. With all of this chaos, many people forget to keep track of some important receipts and come tax time, they lose out on some great school tax credits and tax deductions.

Post-secondary students can claim their tuition fees to receive a tuition tax credit and need either an official tax receipt or a completed form T2202A to do so. This tax credit is fairly straightforward and is commonly transferred to a student’s parents if their income isn’t very high or if the parents are the ones footing the educational bill.

Note: If there are any student loans involved, you might want to become familiar with the rules for claiming interest paid on student loans for after the schooling is finished.

Paying to take an exam or to receive a license in order to practice a certain profession or trade in Canada might be eligible for the tuition tax credit as well. There are some exceptions if you are being reimbursed by an employer, so make sure to check with your accountant before you file your tax return.

If a student has to move in order to go to school (at least 40 km closer than their previous home), they can claim their moving expenses. Unfortunately, claiming moving expenses for school isn’t exactly as helpful as it is for work. A student can only deduct their moving expenses from the money they receive as a result of attending school and would have to claim as income.

In other words, if a student receives a bursary or a research grant and has to move to another location to complete their educational commitment, they can deduct their moving expenses from that income.

Even though textbooks range in price dramatically from faculty to faculty, the CRA handles textbook tax deductions in a one-size-fits-all approach. You can claim $65 per month for full-time studies and $20 for part-time. Your accountant will use your Schedule 11 to figure out exactly how much you can claim.

Make sure to keep all of these school tax credits and deductions in mind as the weather cools and the semester starts up. You will reap the benefits at tax time!