Terry F. Ritchie, a Cardinal Point Wealth Management partner and a member of the Financial Planning Association of Canada, was recently featured in the Globe and Mail. In the article “Ask a planner: As an American in Canada, do I have to pay U.S. estimated taxes?” Ritchie offers valuable insights into the complex tax obligations faced by U.S. citizens living in Canada.
The article addresses a common concern among American expatriates: the necessity of quarterly tax payments to the U.S. and Canadian governments. Ritchie explains that U.S. citizens who expect to owe more than $1,000 additional personal tax for the year must make estimated tax payments. These payments are typically due on April 15, June 15, September 15, and January 15 of the following year.
In Canada, tax residents who owe more than $3,000 for the current and previous two years must also make quarterly installments, due on March 15, June 15, September 15, and December 15.
Ritchie emphasizes the importance of working with a cross-border tax professional to calculate these payments accurately. This collaboration ensures compliance and helps avoid underpayment penalties, utilizing tools like Form 1040-ES for U.S. taxes and the Canada Revenue Agency’s guidelines for Canadian taxes.
Read the full article on the Globe and Mail website for detailed guidance on managing these dual tax obligations.
