Moving to Canada? Be Aware of These 4 Tax and Investment Implications

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Interest in moving to Canada has spiked among Americans after the election.Beyond the physical move, there are financial considerations that potential movers should know of.Cross-border financial advisor Tiffany Woodfield shares 4 ways your finances will be impacted. The result of the 2024 elections left about half of the US displeased. As Donald Trump prepared to return to the White House, many Americans began considering a move up north, according to Google search traffic at least.

Interest in moving to Canada tends to spike after big political events such as the 2016 election and the overturning of the Roe v. Wade Supreme Court ruling.

This phenomenon doesn't just live on the internet, either — some US residents are seriously considering the move.

"Even when Trump was elected last time, a lot of people felt that they weren't as comfortable staying in the States, and so we actually did see an influx of people moving to Canada," said Tiffany Woodfield, a senior financial advisor at SWAN Wealth Management of Raymond James.

Moving, especially across borders, is a big decision and shouldn't be taken lightly. While the physical act of moving is complicated enough, Woodfield points out that there are a lot of financial considerations to be aware of.

"I think sometimes it can be a knee-jerk reaction," Woodfield said of moving to Canada. "If they don't plan ahead of time, they can fall into traps that end up costing them money."

You need to file US and Canadian taxes US citizens residing in Canada might not realize that even on the other side of the border, they're still not free from their tax obligations to Uncle Sam.

If you are a US citizen, you still need to file federal US taxes and report your worldwide income to the IRS no matter where you live. In Canada, taxes are based on your residency status, so if you spend more than 183 days of the year living in Canada, you owe the Canadian government taxes.

To prevent ex-pats from getting taxed twice on their income, the US and Canada have a tax treaty that provides a foreign income tax credit for any income tax paid to the other country, Woodfield explained. That means you can offset your US tax liability with taxes already paid to Canada, but you still need to file two separate tax returns — one to Canada and one to the US — to receive a tax credit.

Additionally, the promise of free healthcare in Canada might sound enticing, but that does come at the cost of higher taxes, so be aware that your Canadian tax bill will probably be higher than what you paid in the US. You also don't have the option to file joint income tax returns with your spouse in Canada, Woodfield warned.

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Moving to Canada? Be Aware of These 4 Tax and Investment Implications

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