Before You Go!

The two items you absolutely "must have" before you even consider a transition to the US is adequate health care coverage and a legal means of residing in the US (a valid visa). Without both of these in place, do not even consider a US move.

Health Insurance - As discussed in the Risk Management section, your provincial coverage will be of little or no use to you in the US . You absolutely must have some form of US medical insurance to cover yourself in the event of illness or injury in the US . This coverage is best secured BEFORE you take transition to the US in the event you, or someone in your family has a "pre-existing" condition and may not be insurable.

Immigration - To enter the US , you must have a legal means (valid visa) of entering and remaining in the US . In order to work, you require the appropriate authorization as well. Because many Canadians come to the US on a "visitors visa" (good for six months), they mistakenly believe that they can enter and work in the US like in any province. A visitors visa is not physically issued when you cross the border, leaving some to believe they can stay or work as long as they want. In fact, if you are caught working in the US without a valid work visa, you will be considered an illegal immigrant and could face deportation and lifetime banishment from the US . Scrutiny in this area has increased significantly since 9/11. You can review your possible visa options are in the Immigration section.

Once you have these two essentials in place, the following must also be considered before moving to the US:

US Taxes - There is much work to be done to minimize these taxes before moving to the US . If you choose not to do it, you can face compliance issues and unnecessary taxes that can be punishing. The Canada/US Tax Treaty is your protection from double (and triple) taxation in both countries and a thorough understanding of it and its application to your situation is the key to not overpaying your taxes.

An analogy may help. Imagine you are the owner of a dinner theatre and the Internal Revenue Service (IRS) is sitting in the audience. You have one chance to "set the stage" before the curtains open and the IRS has full view of your "financial stage." As soon as you make the transition to the US , your entire worldwide income is taxable by the IRS, opening your "financial stage" for the IRS to see. At that point, you can no longer get your "stage" set for their viewing. As a side note, US citizens, derivative citizens and Green Card holders living in Canada must file US income tax returns annually!

Social Security Number or Individual Tax Identification Number - In order to work or live in the US , everyone in your family must have an SSN (for those working) or an ITIN. The SSN will be required by your employer and is required to file a tax return. The ITIN is required for those who are not eligible to work in the US and allows you to reduce your taxes by claiming your spouse and children as dependents. See the Income Tax Planning section of this website for more details on obtaining an SSN or an ITIN.

Canadian Taxes - Despite many thoughts to the contrary, many people just stop filing Canadian tax returns when they leave. In fact, there are final filing requirements with the Canadian Revenue Agency (CRA) that could increase your tax bill significantly due to the "deemed disposition" tax when you leave Canada . In addition, if you don't get your financial house in order prior to, and after your move, the CRA could come back and "deem" you a resident of Canada , leaving you in the unfortunate situation where you would be taxed in both the US and Canada ! We can assist you in ensuring you have demonstrated appropriately to the CRA that you are no longer a resident of Canada .

The bottom line is . . . if you haven't done the pre-requisite planning prior to your departure, many planning opportunities may be lost forever and you will find yourself in a situation where you have to pay many financial professionals on both sides of the border to get yourself back into compliance with both taxing authorities.

Simplify Your Life - This is probably one of the most neglected areas we have seen in dealing with Canadians making the transition to the US . Before you move, take the opportunity to consolidate all of your investment accounts, RRSPs/RRIF accounts and reduce yourself down to only one checking account and one savings account. You should also sell your home, liquidate as many of your personal assets as possible including your automobiles (see Customs Planning section for more details). Once you are in the US , the management your financial affairs in Canada will be greatly simplified (i.e. one call to a broker to manage all of your accounts, one checking account to deal with). If you are small business owner, it is typically best to sell or wind-up your entity prior to moving to the US . If that is not possible, try to set-up your affairs so that you are not required to manage the day-to-day operations of the entity.