Canadians Living in the US: Visas, Taxes, and Financial Planning

How To Manage Your Transition From Canada to the U.S.

Written by John Woodfield, Portfolio Manager, CIM®, CFP®

Moving to another country is a massive change.

Even if you speak the language, cultural differences and legal requirements can make settling in stressful. We're happy you found this post about Canadians living in the U.S. because it aims to guide you through some of the crucial steps you'll need to take to ensure your financial well-being.

As a Canadian living in the U.S., you'll have to deal with complexities that range from legal aspects, like visas and immigration, to financial planning and cultural adjustments. Whether you're already living in the U.S. or planning a move, understanding the details is essential for a smooth transition.

Many of our cross-border clients have come to us after struggling for months or years, trying to figure out the financial planning and investing side independently. We encourage you to seek professional assistance with your cross-border transition as early as possible because it will prevent mistakes and considerably reduce your stress.

The sooner you can assemble a cross-border team with a wealth manager, financial planner, accountant, and lawyer, the better.

Now, let's get into some of the essential cross-border puzzle pieces for Canadians in the U.S.

TABLE OF CONTENTS

1. For Canadian Citizens Who Currently Live in the U.S.
2. For Canadian Citizens Who Have Properties in the U.S. and Canada
3. For Canadian Citizens Who Want To Move to the U.S.
4. Putting Together Your Cross-Border Team
5. Main Visa Categories for Canadian Citizens Moving From Canada to the U.S.
6. Legal Requirements for Immigration to the U.S. From Canada
7. Visas and Permits
8. Legal Procedures and Documentation
9. How to Apply for a Green Card as a Canadian
10. How To Become an American Citizen if Canadian
11. Moving From Canada to the U.S. Checklist
12. Part 1: Before the Move
13. Part 2: Legal Procedures
14. Part 3: After Arriving in the U.S.
15. Part 4: Ongoing Considerations
16. Pros of Living in the U.S. as a Canadian
17. Cons of Living in the U.S. as a Canadian
18. Common Questions About Canadians Living in the U.S.

For Canadian Citizens Who Currently Live in the U.S.

As a Canadian living in the U.S., there are quite a few critical items that should be added to your to-do list. These things can affect your long-term financial well-being, so looking at them and creating a plan is essential. Cross-border planning can be complicated, so it’s best to get started early.

1. Financial Planning:
Understand the differences in both countries' financial systems, investment opportunities, and tax implications. Consulting a cross-border financial advisor is advisable to optimize your financial portfolio.

2. Tax Planning:
Complying with tax obligations in both Canada and the U.S. is vital. Ensuring that you are accurately reporting income and assets helps prevent double taxation.

3. Estate Planning:
Review and update your estate plan to comply with the laws in both countries. This ensures your assets are appropriately distributed.

4. Citizenship Planning:
Evaluate retaining Canadian citizenship while residing in the U.S. Consider potential advantages or disadvantages of your situation.

5. Real Estate Considerations:
Property owners in both countries must understand the tax implications.

For Canadian Citizens Who Have Properties in the U.S. and Canada

If you have properties in Canada and the U.S., you'll need to consider the following:

• property tax
• rental income
• mortgage obligations
• potentially transferring ownership if you plan to live long term in the U.S.
• estate planning

For Canadian Citizens Who Want To Move to the U.S.

You are more likely to have a smooth and successful transition if you plan ahead and consider all the legal and financial puzzle pieces well before you move.

These are a few things to consider:

Private Health Insurance
Understand the U.S. healthcare system and ensure adequate health insurance coverage.

Legal Permanent Resident Requirements
You must know the legal requirements for immigration to the U.S. There is a discussion on visas and green card applications below.

Local Housing Market
You must research and understand the housing market in your preferred U.S. destination so you can make well-informed real estate decisions.

Filing Taxes in Both Countries
You must understand the tax obligations in Canada and the U.S. This will involve seeking advice from cross-border tax specialists.

Getting a U.S. Bank Account
You will want to set up a U.S. bank account to facilitate financial transactions and establish a financial presence in the country.

Putting Together Your Cross-Border Team

A cross-border team that helps you through your transition and ensures everything is done correctly from Day 1 is essential. Below are the team members we recommend you assemble when planning and executing a cross-border move.

IMMIGRATION LAWYER
An immigration lawyer provides services and assistance to individuals, families, and businesses. Their services include legal representation, assistance with visas, advice, document preparation, legal strategies, court representation and appeals.

CROSS-BORDER FINANCIAL ADVISOR AND WEALTH MANAGEMENT TEAM
A cross-border wealth management team specializes in comprehensive financial guidance for those with interests in multiple countries. Your cross-border wealth management team will include a financial advisor with experience with cross-border complexities.

A cross-border (U.S./Canada) wealth management team will specialize in U.S. and Canada financial planning, tax optimization, investment management, retirement planning, and risk management. They will collaborate and coordinate with tax specialists, attorneys and other professionals to ensure the comprehensive management of a client's portfolio and overall financial life.

Finding the right wealth management team is critical if you're a Canadian or a dual citizen living in the U.S. Life becomes much easier when you no longer worry about tax compliance issues, overpaying taxes and whether your investments are optimized for your country of residence.

CROSS-BORDER ACCOUNTANT
A cross-border accountant provides accounting services and financial advice for individuals, businesses, or entities operating across different countries. Their role is crucial when navigating the issues around international financial regulations, taxation, and compliance.

At SWAN Wealth, we can recommend cross-border accountants from within our network or set up a tax consultation with our internal cross-border accountants before you move.

IMMIGRATION SERVICES CONSULTANT
An immigration services consultant provides guidance and assistance to those navigating the immigration process. While they are often not lawyers, these consultants provide advice, information, and assistance with various aspects of the immigration process.

ESTATE PLANNING ATTORNEY
An estate planning attorney specializes in creating legal documents and strategies to plan for the distribution of assets and wealth upon death or incapacity. These attorneys provide guidance and services to ensure that their client's wishes regarding their estate, assets, and beneficiaries are fulfilled.

Main Visa Categories for Canadian Citizens Moving From Canada to the United States

Various visa categories are available for those seeking entry to the United States. These visas cover a wide range of purposes and eligibility criteria.

Here are some of the critical immigrant visa categories:

Family-Based Immigration:
Immediate Relative Immigrant Visas (I.R.)

Family Preference Immigrant Visas:
These are divided into four preference categories (F1, F2, F3, F4) based on the relationship to the sponsoring U.S. citizen or permanent resident.

Employment-Based Immigration:
Multiple employment-based visas are available based on whether you're a priority worker with extraordinary abilities, a professional with advanced degrees, a skilled worker, a religious worker, an employee of the U.S. foreign postal service or an immigrant investor.

• EB-1: Reserved for priority workers, including individuals with extraordinary abilities.
• EB-2: For professionals holding advanced degrees.
• EB-3: Covers skilled workers with less than two years of experience.
• EB-4: Religious workers, certain employees of U.S. foreign service posts, and others.
• EB-5: For immigrant investors.

Each visa category has different application procedures. Consulting with an immigration attorney is an excellent idea. However, you can also explore the official website of the U.S. Citizenship and Immigration Services (USCIS), which provides advice and guidance.

Legal Requirements for Immigration to the U.S. From Canada

To immigrate from Canada to the United States, a series of legal requirements, including visas, permits, and various immigration pathways, must be navigated. Here are some pathways for immigration:

VISAS AND PERMITS

Non-immigrant Visas: These are temporary visas for various purposes such as tourism (B-2 visa), work (H-1B visa), study (F-1 visa), and others.

Immigrant Visas: For those seeking permanent residency in the U.S., there are different immigrant visa categories:

1.  Family-Based Immigration: For relatives of U.S. citizens or permanent residents.
2.  Employment-Based Immigration: For individuals with specific skills or qualifications required by U.S. employers.
3.  Diversity Visa Program: Also known as the Green Card Lottery, this program randomly selects individuals from countries with historically low rates of immigration to the U.S.

LEGAL PROCEDURES AND DOCUMENTATION

I-130 Petition:
U.S. citizens or permanent residents must file Form I-130 to sponsor the family member seeking a green card.

Labour Certification:
The U.S. employer typically must complete a labour certification process to demonstrate the unavailability of U.S. workers for the position being offered to a foreign national.

Immigrant Visa Application:
After approval, the immigrant must apply for an immigrant visa at the U.S. consulate in their home country.

Green Card Application:
Once in the U.S., an individual can apply for a Green Card (Form I-485) to adjust their status to that of a lawful permanent resident.

Naturalization:
After obtaining a Green Card and meeting residency and other requirements, an immigrant can apply for U.S. citizenship through naturalization.

How to Apply for a Green Card as a Canadian

Once you have determined the pathway through which you're eligible, the process includes:

Filing the Petition:
The sponsoring family member, employer, or yourself files the appropriate petition or application with the United States Citizenship and Immigration Services (USCIS).

Immigrant Visa Application:
After the petition is approved, if you're outside the U.S., you'll typically apply for an immigrant visa at a U.S. consulate or embassy in your home country.

Adjustment of Status:
If you are already in the U.S., you can file Form I-485 (Application to Register Permanent Residence or Adjust Status) to adjust your status to that of a lawful permanent resident after the petition is approved. Seeking the advice of an immigration attorney can help navigate the process and ensure that all steps are followed correctly. This will increase the chances of a successful application.

How To Become an American Citizen if Canadian

Becoming an American citizen involves several steps and specific eligibility requirements.

Here's a general overview of the process:

1. Permanent Residency: A Canadian must first become a permanent resident (LPR) by obtaining a Green Card before applying for U.S. citizenship.

2. Meeting Residency Requirements: Residency requirements must be met after obtaining a Green Card. A person must have been a permanent resident for at least five years (three years, if married to a U.S. citizen). Before applying for citizenship, they must have physically lived in the United States for at least half that time.

3. Apply for Naturalization: This typically involves filing Form N-400 (Application for Naturalization) with the U.S. Citizenship and Immigration Services (USCIS). Once the application is filed, an applicant may be required to attend an interview and take a citizenship test covering English language proficiency, U.S. civics, and history. Background checks are also conducted.

4. Oath of Allegiance: The final step is attending a naturalization ceremony where individuals take an oath of allegiance to the United States. This oath marks the official completion of the naturalization process.

Note that the process can vary based on individual circumstances. Seeking guidance from immigration attorneys or specialists knowledgeable about U.S. citizenship procedures can help navigate the process and ensure all steps are correctly followed.

Checklist for Moving From Canada to the U.S.

Moving from Canada to the United States involves many essential steps and considerations to ensure a smooth transition.

Here's a checklist to guide your relocation process:

PART 1: BEFORE THE MOVE

Understand Visa/Immigration Requirements: Determine the appropriate visa or immigration pathway to legally move and fully understand all requirements, documents, and processes.

Organize Essential Documents: Collect and organize documents (passports, birth certificates, marriage certificates, educational certificates, medical records, and any relevant immigration documents).

Financial Planning: Review your financial situation with a cross-border advisor. Plan for the transfer of funds, opening a U.S. bank account, and managing accounts in Canada.

Health Insurance: Research healthcare options and secure coverage before moving.

Real Estate and Property: Consider your options for remotely selling, renting, or managing your Canadian property. Researching the U.S. housing market in your destination area is also a good idea.

 

PART 2: LEGAL PROCEDURES

Visa/Immigration Application: Complete the necessary forms and gather the required documentation.

Tax Considerations: Notify relevant tax authorities about your move and research potential tax obligations.

Legal Permanent Resident Requirements: Familiarize yourself with the requirements and prepare the necessary documentation.

Plan for Pets: Research the requirements and paperwork for bringing your pets into the U.S.

 

PART 3: AFTER ARRIVING IN THE U.S.

Secure Accommodation: It may be wise to find temporary housing upon arrival while searching for more permanent accommodation.

Get a U.S. Phone Number: Obtain a U.S. phone number.

Health Services Registration: Find a doctor registered with health care services and understand how health insurance works.

Social Security Number (SSN): Apply for an SSN (if you don't already have one). The SSN is crucial for all work and financial activities.

Driver's License and Vehicle Registration: Understand the system for obtaining a U.S. driver's license and registering your vehicle.

Banking and Financial Services: Open a U.S. bank account and move funds as needed.

Networking and Community Integration: Get involved in organizations to build a social network.

 

PART 4: ONGOING CONSIDERATIONS

Regularly Review Finances and Taxes: Be current on financial matters, including taxes and any changes in cross-border regulations.

This checklist is a general guide. Seeking professional advice from immigration attorneys, tax consultants, and other experts can further aid in a successful and smooth transition from Canada to the United States.

Living in the U.S. as a Canadian

For Canadians contemplating a move to the United States, there are many things to consider before proceeding. Here's a look at the pros and cons of living in the U.S. as a Canadian.

PROS OF LIVING IN THE U.S. AS A CANADIAN CITIZEN

Opportunities: The United States offers vast opportunities in industries such as tech, finance, arts and entertainment.

Cultural Diversity: Living in the U.S. offers exposure to different customs, lifestyles, and traditions, enriching the overall experience of living in the country.

Economic Prosperity: The U.S. economy's size and strength provide Canadians with broader business opportunities.

Climate Variation: The U.S. offers a wide range of climates, allowing citizens and visitors to experience a variety of climates. These range from sunny coasts to the snowy mountains.

CONS OF LIVING IN THE U.S. AS A CANADIAN CITIZEN

Healthcare Costs: Healthcare in the U.S. is often expensive and may not be as accessible or comprehensive as in Canada.

Tax Complexities: Canadians living in the U.S. might face the challenge of complying with tax obligations in Canada and the U.S.

Education Costs: Education expenses in the U.S. can be significantly higher than in Canada.

Common Questions About Being a Canadian Living in the U.S.

Q: Is leaving Canada and making the trek south worth it?
A: The answer varies, based on individual circumstances and personal preferences. It's essential to determine if the move aligns with your aspirations.

Q: How long can a Canadian citizen live in the U.S.?
A: Canadians can generally stay in the U.S. for up to six months under the B-2 visa for tourism.

Q: What happens if a Canadian stays in the U.S. longer than six months?
A: Staying without the proper visa can lead to immigration issues, including potential fines, deportation, or restrictions on future entries.

Q: How long can a Canadian stay in the U.S. without paying taxes?
A: The U.S. imposes taxes based on residency. An individual residing in the U.S. for more than 183 days within a year might be considered a tax resident.

Q: Can a Canadian work in the U.S.?
A: Canadians may be eligible for work visas like the T.N. (Trade NAFTA).

Next Steps

If you’re a Canadian who is planning a move to the U.S. or are already living there, please get in touch. If you need assistance with moving and optimizing your investments, estate planning, wealth management and portfolio management, we can help you. At SWAN Wealth, we specialize in Canadian financial planning, cross-border financial planning and cross-border wealth management.

 

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Foreign Tax Credits in Canada and the U.S.

The Ultimate FBAR Planning Guide

 

About the Author

John Woodfield is a Financial Management Advisor (FMA), a Chartered Investment Manager (CIM), and a Certified Financial Planner (CFP), and in 2007, was inducted as a Fellow of the Canadian Securities Institute (FCSI). As a portfolio manager and CFP®, he works with clients across Canada. John Woodfield’s clients are families, individuals and business owners who understand the importance of comprehensive wealth and investment plans driven by the lifestyle they want to lead.

 

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