US Tax Information for Canadians

US Tax information for Canadians

In our ongoing effort to provide comprehensive information to people applying for visas to Canada and visas for US, we have gone “outside the box” as it were. While we are not tax experts by any stretch and the following is not to be considered legal advice, it is important to understand the tax issues for Canadians wishing to do business, work or immigrate to the US.  We hope this general information is helpful but always consult with a tax expert before making a move to the US.  Of course we are here to help with your US Visas!

And for those of Americans or foreign nationals wishing to immigrate to Canada, we have written a blog on tax for you as well here.

If you conduct business, own property or spend some of your time living in the United States, there are a couple of special considerations to take when filing your taxes, and you may have to file them in the United States.

Taxes for Canadians Living in the United States for only Part of the Year

The basic equation used to determine if you spend enough of each year within the United States to be considered a tax resident is:

How many days you spent in the U.S. during the current year + one-third of the days spent in the U.S. the previous year + one-sixth of the days spent in the U.S. the year before that.

The total days that must be spent in the U.S. for you to be considered a tax resident are 183. If your number meets or exceeds this amount, you must file taxes in the United States.

For you snowbirds, spending an average of around 4 months in the United States per year will usually meet this number.

The Cost of doing Business in the US for Canadians

Typically, If you conduct business within the United States by: shipping goods, soliciting business, having an office or consulting within the United States, you must file taxes there.

However, Canada has a tax treaty with the United States which renders most Canadians exempt from these taxes unless they have a permanent location within the country. A tax return must still be filed, using Form 1120F if you are a corporation and Form 1040NR if you are an individual, including Form 8833 to explain the exemption.

Taxes for Canadians Owning Property in the Unites States

If you sell a property in the U.S., Form 1040NR must be used to report the sale. If you own a rental property in the U.S., you will usually have to pay a 30 per cent withholding tax.

What you can do, however, is use the net rental income method: because the tax is rather high, you can opt to file a complete U.S. tax return on your expenses and income on the property, which may lower the total tax.

Both of these tax filings are due on June 15.

Michael Niren

About Michael Niren

Michael is a graduate of Osgoode Hall Law School in Toronto. He is a member of the Law Society of Upper Canada, the Canadian Bar Association’s Citizenship and Immigration Section and the Associate Member of the American Bar Association. Read more

  • If you’re in these situations, it would be best to leave your taxes to a professional.

The content and comments of this blog are not legal advise and and may not be accurate or complete. If you require legal advice, contact a licensed legal practitioner directly. If you post on this blog, you assume full responsibility for disclosing your identity to the public and VisaPlace nor its affiliates are not responsible for protecting your privacy nor your identity concerning your participation in our blog and you assume any risks in participating.

Customer Reviews

Great law firm with great staff. My lawyer Rania did a great job for my Canadian work permit and my daughters study permit. You are great in your work. And my Para Legal officer Alicea, you are just amazing. They did not rest until my job was promptly and properly done. Always there to answer my calls, reply my emails promptly. She tried her best and the results were amazing. I recommend visa place if you need the best immigration job. Many thanks to Rania and Alicea.

Charity Musa2 months ago

Great firm on top of their game. Worked with us til the end to ensure my parents visa was approved and guided us along the way in a professional manor. Natalie is awesome. Majority of our communications were via email, but the responses were immediate. I would greatly recommend this firm. Thank you for all your hard work and help. My family and I do really appreciate it.

Daxesh Patel2 months ago

I am grateful for the legal services that I got from Sanaa and Alicea of Visa Place. I was impressed by their client centered approach. Their professionalism involved their hearts and heads to work on my case. I cannot compare the time they spent on it with the money I paid. All they wanted was a fine final document. I also liked their prompt communication. They are really passionate about what they do.

Theresie Nuwimanaa month ago

Associations