Advertise on podcast: Crossing the 49th - Cross-Border Tax and Wealth Managment Podcast

Crossing the 49th — Cross-Border Tax & Financial Planning Podcast If you’re an American living in Canada, you’ve probably heard the advice: “Just file your Canadian return first, then do your US return.” In a lot of cases, that works. But if you have investment income, US rental properties, or US-source dividends, filing in the wrong order can cost you thousands — and trigger a CRA review you didn’t see coming. In this episode, Phil Hogan breaks down exactly when filing your Canadian return first works, when it doesn’t, and why the foreign tax credit calculation is where most people get burned. When Filing Your Canadian Return First Actually Works If your tax situation is straightforward — you’re employed in Canada, you have a T4, and no investments — filing the Canadian return first is perfectly fine. You report your Canadian employment income, file the return, then hand everything to your US preparer. On the US side, your preparer reports the T4 income on the 1040 and either claims a foreign tax credit for Canadian taxes paid, or uses the Form 2555 Foreign Earned Income Exclusion to wipe out the US tax. Two options, both work well for simple returns. ✅ Simple Return = Flexible Filing Order If you only have Canadian employment income (T4) and no investments, rental income, or US-source income, you can safely file your Canadian return first and your US return second. The foreign tax credit math is straightforward. When It Falls Apart: Investment Income, Rentals, and US Dividends Here’s where it gets tricky. Let’s say you’re an American living in Canada with: T4 employment income from your Canadian job A rental property in Florida generating net rental income An investment portfolio with both Canadian and US dividends If you file the Canadian return first, you’d report your worldwide income — employment, rental income, capital gains, interest, and dividends. Then you’d need to claim a foreign tax credit for US taxes paid on that US-source income. But here’s the problem: how do you know what your US taxes are if you haven’t filed your US return yet? ⚠️ The Foreign Tax Credit Trap Many people claim a foreign tax credit based on the withholding tax shown on their slips (often 15%, the treaty rate). But your actual US tax on that income may be less than 15% — especially if you’re not in a high income bracket. And for US rental income, you have no idea what the tax will be until the 1040 is prepared. Filing the Canadian return with incorrect foreign tax credits is one of the most common cross-border mistakes. What Happens When the CRA Reviews Your Foreign Tax Credit This is the part most people don’t see coming. After you file your Canadian return, the CRA frequently sends a review letter asking you to prove your foreign tax credit calculation. They’ll ask for: Your detailed foreign tax credit calculation A copy of your US 1040 return Your US 1040 transcript If the amount of US tax you actually paid on your 1040 doesn’t match what you claimed as a credit on your Canadian return, the CRA will reassess you. If you overstated your foreign tax credit, you’ll get a bill for the difference — plus interest. 💡 Why This Happens So Often The CRA knows that foreign tax credit claims are frequently wrong. That’s why they audit them regularly. The root cause is almost always the same: the Canadian return was filed before the US return was complete, so the foreign tax credit was based on estimates or withholding amounts instead of actual US tax paid. The Right Approach: File Both Returns in Tandem The solution isn’t necessarily that the same person does both returns — although that’s ideal. The key is: do not file your Canadian return before your US return is at least started or in process. When both returns are prepared together, the preparer can: Calculate the actual US tax on each income source Apply the correct foreign tax credit on the Canadian return Avoid the back-and-forth between separate preparers Prevent CRA reassessments down the road In Phil’s experience, when a Canadian preparer does the T1 and a separate US preparer does the 1040, you often end up with weeks of back-and-forth — emails, phone calls, revised calculations — all of which is completely avoidable if the returns are prepared under one roof. ⚠️ Separate Preparers = Coordination Risk Even if both preparers are competent, the coordination overhead is real. Weeks of going back and forth on foreign tax credit calculations by email is an inefficient and error-prone way to handle cross-border returns. One firm handling both sides eliminates this entirely. The Bottom Line “File your Canadian return first, then your US return” is advice that works for simple situations — and fails for everything else. If you have investment income, US rental properties, US dividends, or any US-source income, your Canadian and US returns need to be prepared together, or at minimum, in close coordination. The foreign tax credit is the linchpin of cross-border tax filing. Get it wrong, and you’re looking at CRA reassessments, interest charges, and a lot of unnecessary stress. Get it right by filing both returns in tandem — ideally under one roof. Need a Cross-Border Tax Team That Handles Both Sides? Book a free consultation with Beacon Hill. We prepare your Canadian and US returns together — no back-and-forth, no coordination gaps, no surprises from the CRA. Book Your Free Consultation Listen & Subscribe Subscribe to Crossing the 49th on Apple Podcasts and Spotify. Stay Connected Beacon Hill Wealth Management Americans in Canada — Private Facebook Group Twitter / X Instagram YouTube Channel Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or investment advice. Tax and financial planning rules change frequently and some information may be outdated. The views expressed are those of Beacon Hill Wealth Management Ltd. and may change without notice. Past performance is not indicative of future results. Investing involves risk, including possible loss of principal. Please consult a qualified cross-border tax and financial planning professional for advice specific to your situation.

Crossing the 49th — Cross-Border Tax & Financial Planning Podcast Moving to Canada with a large IRA? If you have a low-income year before your move, there’s a powerful opportunity to convert traditional IRA funds into a Roth IRA — potentially saving hundreds of thousands in taxes over your lifetime. In this episode, Phil Hogan walks through a real client example: a woman relocating from California with a significant IRA and projected RMDs of $250K–$300K/year. By converting before becoming a Canadian tax resident, those future distributions could be completely tax-free on both sides of the border. What We Cover Why a low-income year before your move is a golden conversion window How to convert traditional IRA funds to a Roth before becoming a Canadian tax resident How Canada-U.S. treaty rules can protect Roth distributions from Canadian tax Real client example: $250K–$300K/year in projected RMDs eliminated Get in Touch Have questions about your IRA, Roth conversion strategy, or upcoming cross-border move? Contact Phil directly at [email protected] or call 778-405-4453. You can also book a complimentary consultation here (limitations apply). Listen & Subscribe Subscribe to Crossing the 49th on Apple Podcasts and Spotify. Stay Connected Beacon Hill Wealth Management Americans in Canada — Private Facebook Group Twitter / X Instagram YouTube Channel Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or investment advice. Tax and financial planning rules change frequently and some information may be outdated. The views expressed are those of Beacon Hill Wealth Management Ltd. and may change without notice. Past performance is not indicative of future results. Investing involves risk, including possible loss of principal. Please consult a qualified cross-border tax and financial planning professional for advice specific to your situation.

As we head into the holiday season, many of us are reflecting on our traditions, especially those of us who live between two countries. At Beacon Hill Wealth Management, we work with many Americans living in Canada, and one topic that always comes up this time of year is Thanksgiving. How does it differ between the two countries, and what should expats expect? In a recent interview on 770 AM Calgary Radio with Sarah Crosbie from Global News, our very own Chris Stooksbury shared his unique experience as an American living in Canada. The conversation dove into everything from the dates and traditions to football and, yes, even the infamous seven-layer Jell-O! Key Highlights from the Interview: Date and Significance: While Canadian Thanksgiving happens in early October, the U.S. celebrates later in November, with a much bigger focus on travel, football, and family gatherings. Cultural Differences: In the U.S., Thanksgiving is often a four-day event, with many returning home, whereas in Canada, it’s typically a single-day affair. Food Traditions: Both countries have their staples—turkey, stuffing, and cranberries—but there are unique regional twists, especially for American expats who bring their holiday traditions north of the border. You can watch the full interview below to get all the insights directly from Chris. 🎙️ Special thanks to Global News and Sarah for providing the audio of this interview. https://globalnews.ca/pages/audio-vault-chqr/ If you have any questions about this topic or need advice on other cross-border tax or investment matters, feel free to contact Phil at [email protected]. You can also take advantage of our complimentary tax consultation by visiting: https://beaconhillwm.ca/get-started-now/ Subscribe to Crossing the 49th Cross-border Tax and Financial Planning Podcast on Apple podcasts and Spotify. You can also stay updated on US Expat Tax and financial planning issues by following us at: Our website American in Canada Private Facebook Group Follow us on Twitter Follow us on Instagram Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

In this episode of Crossing the 49th, Phil Hogan from Beacon Hill Wealth Management discusses the top 5 tax return mistakes expats make when filing U.S. and Canadian returns. From form 2555 errors to foreign tax credit issues, Phil covers the key pitfalls and how to avoid them for a smoother tax season. Key Topics: Incorrect use of form 2555 for foreign earned income Reporting worldwide income on both U.S. and Canadian returns Proper handling of Social Security income Errors with foreign tax credit forms (1116) Why it’s best to file both returns through the same firm If you have any questions about this topic or need advice on other cross-border tax or investment matters, feel free to contact Phil at [email protected]. You can also take advantage of our complimentary tax consultation by visiting: https://beaconhillwm.ca/get-started-now/ Subscribe to Crossing the 49th Cross-border Tax and Financial Planning Podcast on Apple podcasts and Spotify. You can also stay updated on US Expat Tax and financial planning issues by following us at: Our website American in Canada Private Facebook Group Follow us on Twitter Follow us on Instagram Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

In this episode of Crossing the 49th, Phil Hogan discusses U.S. state tax filing for Canadians.     Learn when and why Canadians need to file state returns, especially for rental income, property sales, or if you’re moving from the U.S. to Canada. Get insights on exit returns, foreign tax credits, and key strategies for cross-border tax planning. Key Topics: Filing U.S. state returns as a Canadian Tax responsibilities for rental properties and property sales Exit returns when moving to Canada Managing foreign tax credits If you have any questions about this topic or need advice on other cross-border tax or investment matters, feel free to contact Phil at [email protected]. You can also take advantage of our complimentary tax consultation by visiting: https://beaconhillwm.ca/get-started-now/ Subscribe to Crossing the 49th Cross-border Tax and Financial Planning Podcast on Apple podcasts and Spotify. You can also stay updated on US Expat Tax and financial planning issues by following us at: Our website American in Canada Private Facebook Group Follow us on Twitter Follow us on Instagram Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

In this episode of Crossing the 49th, Phil Hogan from Beacon Hill Wealth Management discusses the tax implications of holding and withdrawing from an RRSP as a U.S. resident. Learn how the Canada-U.S. tax treaty affects RRSPs, foreign tax credits, and how to plan your withdrawals to minimize tax liabilities. Key Topics: Tax rules for RRSPs under the Canada-U.S. treaty Reporting RRSPs on U.S. tax returns (FBAR & 8938) Withholding taxes and claiming foreign tax credits Strategic RRSP withdrawal planning for U.S. residents If you have any questions about this topic or need advice on other cross-border tax or investment matters, feel free to contact Phil at [email protected]. You can also take advantage of our complimentary tax consultation by visiting: https://beaconhillwm.ca/get-started-now/ Subscribe to Crossing the 49th Cross-border Tax and Financial Planning Podcast on Apple podcasts and Spotify. You can also stay updated on US Expat Tax and financial planning issues by following us at: Our website American in Canada Private Facebook Group Follow us on Twitter Follow us on Instagram Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

On this episode of Crossing the 49th I discuss the tax treatment of interest, dividends and capital gains for U.S. expats that live in Canada. Key Topics: How these income items are taxed Foreign tax credit application including 1116 form filings Relevant treaty sections. To review the Canada-US tax treaty please visit here: https://beaconhillwm.ca/wp-content/uploads/2024/09/Canada-US-tax-treaty.pdf If you have any questions about this topic or need advice on other cross-border tax or investment matters, feel free to contact Phil at [email protected]. You can also take advantage of our complimentary tax consultation by visiting: https://beaconhillwm.ca/get-started-now/ Subscribe to Crossing the 49th Cross-border Tax and Financial Planning Podcast on Apple podcasts and Spotify. You can also stay updated on US Expat Tax and financial planning issues by following us at: Our website American in Canada Private Facebook Group Follow us on Twitter Follow us on Instagram Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

On episode #29 of Crossing the 49th Podcast, we discuss why transferring your IRA to an RRSP might not be a good idea. Understanding Why You Should Think Twice Before Transferring Your IRA to an RRSP | Cross-Border Tax and Financial Planning In this episode of Crossing the 49th, I explain the potential pitfalls of transferring your IRA to an RRSP, a common consideration for U.S. expats in Canada. I also discuss alternative strategies that may better suit your financial goals. Key Topics: Overview of IRAs and RRSPs Reasons you might consider an IRA to RRSP transfer Challenges and downsides of transferring your IRA to an RRSP Better alternatives to transferring your IRA The role of a cross-border adviser in managing your retirement accounts You can download a copy of the presentation here: https://beaconhillwm.ca/wp-content/uploads/2024/09/IRA-to-RRSP-transfers-Beacon-Hill-Wealth-Management.pdf Subscribe to Crossing the 49th Cross-border Tax and Financial Planning Podcast on Apple podcasts and Spotify. You can also stay updated on US Expat Tax and financial planning issues by following us at: Our website American in Canada Private Facebook Group Follow us on Twitter Follow us on Instagram Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

On episode #28 of Crossing the 49th Podcast, we discuss the upcoming October 15th deadline. Understanding the October 15 Deadline for U.S. Expats in Canada | Cross-Border Tax and Financial Planning In this episode of Crossing the 49th, I break down the important October 15 tax deadline for Americans living in Canada. With the U.S. tax extension deadline coming up, I’ll walk you through key points for those who haven’t filed their U.S. tax returns yet, including FBAR filings and the penalties for missing deadlines. I also cover how to manage both U.S. and Canadian tax returns and why it’s essential to file them together. Key Topics: October 15 deadline for U.S. expats in Canada Managing U.S. and Canadian tax returns The importance of FBAR filings and T1135 forms What to do if you need an extension to December 15 Subscribe to Crossing the 49th Cross-border Tax and Financial Planning Podcast on Apple podcasts and Spotify.   You can also stay updated on US Expat Tax and financial planning issues by following us at: Our website American in Canada Private Facebook Group Follow us on Twitter Follow us on Instagram Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

On episode #27 of Crossing the 49th Podcast, we delve into the IRS Streamline Tax Program and Cross-Border Financial Planning with Experts Rob Brown and Doug Lawson.   Extended Summary of the Podcast: Join host Phil Hogan and guests Rob Brown and Doug Lawson from Hutcheson and Co. LLP as they explore essential topics for Americans in Canada. This episode provides comprehensive insights into the IRS Streamline Tax Program, 1040x adjustments, and strategic considerations for TFSA and RESP. For a detailed breakdown, see our TFSA guide for US citizens in Canada. Key takeaways from the episode include: – IRS Streamline Tax Program: An in-depth exploration of this vital program for tax compliance. – 1040x Adjustments: Understanding the nuances and importance of these adjustments. – TFSA & RESP for Americans in Canada: Strategies and tips for effective financial planning. – Planning for Americans Moving to Canada: Essential advice for a smooth financial transition. For personalized advice or questions, reach out to Phil directly at [email protected]. Stay tuned for more insightful episodes from “Crossing the 49th”! #IRSStreamline #1040x #TFSA #RESP #USCanadaTaxPlanning #PhilHoganCPA You can also stay updated on US Expat Tax and financial planning issues by following us at: American in Canada Private Facebook Group Americans in Canada Reddit subReddit Follow us on Twitter Follow us on Instagram Sign up for our Expat Tax and financial planning newsletter Subscribe to my YouTube Channel Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.