Cross-Border Tax (US-Canada and International)

Only the US side. We prepare United States federal and state returns plus the international information returns that attach to them, and we coordinate directly with your accountant in the other country. If you do not have one, we can refer you. We are explicit about this because a firm that quietly implies it covers both sides creates exactly the gap that produces double taxation.

Almost always yes. The treaty decides which country has the primary right to tax each type of income, and residency is settled under the Article 4 tie-breaker cascade: permanent home, then centre of vital interests, then habitual abode, then nationality. Each country then gives credit for the other where required. We prepare the US return and coordinate with your Canadian preparer so the credit flows correctly on both sides rather than being claimed twice or not at all.

Through the tie-breaker rules in Article 4, applied in order until one resolves: where you have a permanent home available, where your personal and economic ties are stronger, where you habitually live, and finally your nationality. If none resolves it, the two tax authorities decide by agreement. One important limit: the saving clause in most US treaties means a US citizen generally cannot use the tie-breaker to stop being taxed by the United States.

It depends on your residency starting date, which is usually the first day of physical presence in the year you meet the substantial presence test. Before that date you are generally a nonresident, and after it a resident, which produces a dual-status return. Dual-status filers cannot take the standard deduction. Elections exist that let some couples file jointly as full-year residents instead, but they pull the other spouse worldwide income and foreign accounts into US reporting, so the choice is not free.

They are treated very differently, and lumping them together is the most common error we see. Growth inside an RRSP or RRIF is deferred for US purposes under the treaty, and since Revenue Procedure 2014-55 that deferral is automatic with no annual election required. A TFSA and an RESP get no equivalent treaty protection, so income inside them is generally currently taxable in the US and they often raise foreign trust and PFIC reporting questions on top of that.

Usually not, but the relief is not automatic and it is not complete. Foreign tax credits are limited separately within the passive, general, and Section 951A baskets, so a credit earned in one basket cannot shelter income in another. Timing mismatches between two countries tax years create real residual double taxation even when the credit is available in principle. The goal is to minimize it deliberately rather than to assume a treaty eliminates it.

It can be, and this is the least understood trap in cross-border tax. If you are a long-term resident, meaning a green card holder in at least eight of the last fifteen tax years, taking a treaty tie-breaker position is treated as expatriating and can trigger the Section 877A exit tax and Form 8854. If you are not yet long-term, treaty-resident years do not count toward that eight, so the same filing can be protective. Which side you are on decides everything.

The State Department charges a $2,350 renunciation fee, but the tax cost is the one that actually matters. You are a covered expatriate, and exposed to the Section 877A exit tax, if any one of three tests is met: net worth of $2,000,000 or more, which is not indexed for inflation, average annual net income tax above $211,000 for 2026, or failure to certify five years of tax compliance. Covered expatriates are treated as selling everything the day before expatriation, with the first $910,000 of gain excluded for 2026. Failing the certification test alone makes you covered even below both dollar thresholds.

Usually not, if a totalization agreement covers your situation. The United States has 30 of them in force, and they assign you to one country social security system rather than both, typically the country where you actually work, with an exception for short assignments abroad. The mechanism is a certificate of coverage from the country you remain in. Without one, self-employed people in particular can end up paying into two systems for the same earnings.

It is sourced to where you actually earned it, not to where the payroll happened to run. For RSUs and options the accepted approach allocates the income across the workdays between grant and vest, or grant and exercise, so each country taxes its share. Payroll systems rarely do this correctly, which is why cross-border equity is one of the most common places we find the same income fully taxed in two countries at once.

TS CPA PLLC is a licensed US CPA firm that handles the United States side of cross-border filings, founded by Clark Shi, CPA, CMA, MBA, an Enrolled Agent and former Senior Manager at a Top 5 global CPA firm. We prepare US federal and state returns and the international information returns attached to them, and we coordinate directly with your Canadian accountant so both sides take the same position. We have offices in Houston, San Jose, and New York, and cross-border engagements are handled remotely worldwide.

Start with a free consultation. Pricing is flat-rate and quoted after that conversation, because cost is driven by how many jurisdictions, information returns, and years are involved rather than by an hourly clock. To scope it we need your last filed returns from both countries, the dates you entered or left each one, and details of any foreign accounts, pensions, equity awards, or entities. You get the number before work begins.