Key Changes to Canadian Tax Policies in 2024
The changes introduced in Canada Budget 2024 are poised to have a substantial impact on Canadians, particularly entrepreneurs, investors, and prospective home buyers. In the following piece, Private Wealth and Tax Manager, Kris Rossignoli, outlines the proposed changes and highlights why staying informed and seeking expert financial advice will be key to navigating this new tax landscape effectively.
Understanding Canadian Tax Obligations for Non-Residents: An Essential Ebook Guide
Talking Tax with Kris Rossignoli
Small Business BC recently published a timely and insightful article titled Talking Small Business Tax Tips with Accountant Kris Rossignoli. He emphasized critical steps taxpayers need to take in order to minimize their tax liability, maximize eligible deductions, and ensure full compliance with all tax laws to avoid fees, penalties, and other serious legal and financial consequences. He share tips like the value of knowing CRA deadlines, utilizing a convenient online CRA business account, claiming eligible business expense deductions – and avoiding certain deductions that you may be unable to fully justify. By following his experienced recommendations, you can also make tax preparation much less stressful – which is a priceless benefit.
An Income Tax Comparison – Moving from Ontario to Florida Ebook
Moving from Canada to the U.S.: What to do with your Canadian dollar investments
Anyone planning to move from Canada to the United States, or who has already made that move, must give careful consideration to how they manage their Canadian dollar denominated investments. Otherwise they risk consequences such as having those investment accounts frozen or discovering that their Canadian-based financial professionals are prohibited from managing their investments once they become U.S. residents. But to make matters even more complicated, they may be unable to find a qualified financial and tax advisor in the United States to manage their Canadian dollar assets. The good news is that you have viable options and excellent solutions to help you avoid these and other unwanted and costly scenarios. All of that is explained in this highly informative and helpful blog.
Introducing Kris Rossignoli at Cardinal Point and writer Jeff Buckstein for Canadian Family Offices Q&A
Kris Rossignoli, a cross-border tax and financial planner with Cardinal Point Capital Management, was recently featured in an article published by Canadian Family Offices. He explained the crucial need for expert, experienced guidance from cross-border tax, finance, and estate planning professionals, regarding the extraordinary complexities of a cross-border move. Canadian business owners planning to move to the United States to expand their market footprint also face considerable tax and financial hurdles that demand careful and strategic planning. The topic is increasingly relevant in an era of cross-border lifestyles and employment opportunities, and Rossignoli’s insights in the following blog are invaluable.
Should I Buy Stocks at All-Time Highs?
Conventional wisdom tells us that it’s always best to “buy low, sell high.” But contrary to what most investors may realize, decades of S&P 500 data confirms that record highs are rather commonplace – and investing when the stock market is at, or close to, those highs may deliver significantly positive returns. In fact, buying into the market during those historic upticks may generate investor gains that are actually greater than the ones achieved by those who invest at all other times. This phenomenon may sound quite contrary to typical investment logic. But as this blog explains, there is plenty of factual evidence to support the idea that buying high (even in years like 2024 when there’s the uncertainty of a U.S. presidential election) may be a sound long-term strategy for achieving your financial goals.
U.S. Retirement Healthcare Coverage Options
One of the biggest and most important expenses in retirement is health care. Unfortunately, those who don’t plan ahead for adequate health insurance coverage can face tremendous costs and obstacles that can undermine a successful retirement. This article helps to inform those looking forward to retirement about their four main Medicare coverage options, as well as the availability of Medicaid. Additionally, it explains Medigap supplemental insurance, employer-sponsored healthcare insurance plans for retirees, the multiple tax advantages of Health Savings Accounts, and various types of Long Term Care insurance. That information can empower you to make more informed and strategic decisions, based on uniquely individual factors such as your age, net worth, and medical history.
RDSPs Can Grow Savings Tax-Free Without Loss of Disability Payments
Navigating the Toronto Vacant Home Tax
The City of Toronto now imposes an annual tax on the assessed value of many vacant properties, and other Canadian jurisdictions have passed similar tax regulations. The goal is to help promote occupancy of properties and alleviate housing shortages. Property owners need to be aware of residency definitions and other rules related to these new taxes, and to understand their obligations to comply with applicable rules in a timely manner. Those who fail to pay taxes that are due may be subject to fines and penalties, and noncompliance can carry penalties as high as $10,000. This helpful article explains the important obligations and how the taxes are levied. It also describes ways that owners may qualify for money-saving tax exemptions.
Winter 2023/2024 Tax Highlights – USA
The tax team at Cardinal Point Capital Management has put together a few highlights of what is old and what is new for taxes and compliance in the United States this winter of 2023–2024. The Tax Cuts and Jobs Act is still in play until 2026 and the lower tax rates, higher gift and estate tax exemption and complex foreign reporting are both your planning opportunities and your foreign compliance burden. The SECURE Act 2.0 offers better choices for retirement savings. Clean energy tax credits from the Inflation Reduction Act are fully available for 2023 and forward. Beneficial Ownership Reporting will start in January 2024.
Winter 2023/2024 Tax Highlights – Canada
2023 was a busy year of changes for taxation in Canada! Changes to the Alternative Minimum Tax (AMT) are substantial and will affect most taxpayers with capital gains and stock options. The tax team at Cardinal Point Capital Management has put together this letter to explain AMT at a high level and point out some other measures that warrant notice. These other measures include: the First Home Savings Account, anti-flipping rules for principal residences, the Underused Housing Tax, vacant home taxes expanded reporting for all trusts (including bare trusts), enhanced GAAR, and the Mandatory Disclosure Rules. Let’s jump in with the increased limit for withdrawals of EAP (the grant portion) from an RESP.
2024 Annual Inflation Adjustments from the IRS – Cross-Border Implications
The only constant in the world of taxes is change. The IRS recently announced the inflation adjusted numbers for 2024. Spoiler alert: All the numbers increase until 2026. For U.S. citizens living abroad and for non-U.S. persons with assets in the U.S., these changes matter. In this article, the tax team at Cardinal Point Capital Management goes over the dollar limits such as the increase in the lifetime gift and estate tax exemption to $13,610,000 and what that means for a non-resident whose estate is in multiple countries or whose inheriting spouse is not a U.S. citizen.
Navigating Digital Assets in Estate Planning
These days almost everyone holds valuable digital assets and they continue to accumulate them. Examples include online financial accounts, photos and videos on smartphones, and digital currencies like Bitcoin. These may have financial value, legal value, or significant sentimental value. But most people do not fully consider the importance of including these digital assets when doing their estate planning. That leaves them exposed to the risk that if they are impaired or die, the assets may be difficult or even impossible to access. This article explains how to avoid that risk, to ensure a seamless transfer of digital assets for the benefit of both you and your beneficiaries.
Cross-Border Wealth Management: Overcoming the Downside of Over-Funding Your Child’s 529 Plan
For both Canadian and U.S. residents, a 529 plan can be a very effective tool to help save for a child’s higher education. Plus, recently passed U.S. legislation under the SECURE Act 2.0 offers a unique way to more efficiently manage 529 contributions. Starting in 2024, it will be possible to transfer into a Roth IRA any extra funds that remain in the 529 after all educational expenses have been paid – as long as certain eligibility requirements are met. As this blog explains, that can enable you to avoid steep 529 withdrawal taxes and penalties, while continuing to accumulate wealth in a tax-free Roth IRA.
Matt Carvalho Featured in the Globe and Mail
The Globe and Mail recently asked Cardinal Wealth Management’s Chief Investment Officer, Matt Carvalho, to help explain “direct indexing” – a hot topic in the investment industry. He described some of the pros and cons of direct indexing to customize your portfolio compared to using an ETF or mutual fund.
Navigating the Maze of Personal Services Businesses
Many freelancers and contractors are incorporating themselves as Personal Services Businesses, because such classification can potentially offer many advantages. However, operating as a Personal Services Business could be a mistake for you because it can trigger exposure to significantly higher taxes. But as is always the case with issues of taxation, the rules are very complicated and are subject to change.
Devan Legare Featured in Globe and Mail
The Globe and Mail recently asked Devan Legare − a portfolio manager at Cardinal Point Capital Management and a member of the Financial Planning Association of Canada – for tips on how to get the most from your CCP. He shared valuable insights in the article titled “Am I at risk of losing out on CPP?” emphasizing two that are especially significant because they can help you maximize your CCP while also getting the most out of your retirement.
Terry Ritchie Featured in “How Cross-Border Clients Can Utilize the U.S. Gift Tax Lifetime Exemption before Rules Change”
Currently, the U.S. lifetime gift tax exemption is $12.92 million. Read all about it and learn specific considerations and strategies to make the most of your financial gifts in this article, “How Cross-Border Clients Can Utilize the U.S. Gift Tax Lifetime Exemption before Rules Change.”
A Comprehensive Guide to Understanding Property Ownership in U.S. Estate Planning
The successful transfer of assets to intended beneficiaries according to one’s desires is a vital goal in U.S. estate planning. However, many people – including some less informed and experienced financial and tax planners – often fail to understand the crucial role that is played by 1) the specific way that assets are owned and 2) exactly how they are transferred. Strategizing and planning accordingly is extremely important in order to avoid unwanted tax implications and other obstacles to the transfer of wealth. This article offers valuable insights in that regard, to help ensure that estate plans are structured for maximum benefits to secure one’s financial legacy.
Destination – Retirement
Although retirement can last two or three decades – and typically does for people who reach the retirement age milestone – most people don’t invest much time in planning for it. In fact, people typically spend more time and effort planning their next vacation. But without proper preparation, retirement can present unnecessary challenges and stressful obstacles, both personally and financially. That’s why it is so important to start planning right away, with experienced guidance from tax professionals and financial advisors. That ensures that your retirement years will be satisfying, secure, and in the best possible location. This article provides some great insights into retirement planning, which can actually be very inspiring and just as much fun as vacation planning.
Cross Border Financial Planning – Non-Arm’s Length Cross-Border Gifting
When gifting assets in a non-arm’s length transaction, there are many financial and tax complexities to consider based on U.S. and Canadian laws. Where you and the recipient live, their immigration status, and the nature of their relationship all come into play. That’s true whether you give the gift of college tuition or a down payment on a home to a child, you are using an estate planning gifting strategy between spouses to avoid lengthy probate, or you are gifting property like jewelry or automobiles. This article provides insights to help you avoid unwanted and potentially steep tax liability and to ensure a smoother gift giving process.
Cross Border Wealth Management: Navigating your RESP
A Registered Education Savings Plan (RESP) is a powerful asset when saving to pay for post-secondary education. College tuition had already become almost prohibitively expensive, years before recent historic inflationary pressures made the cost of higher education rise even more dramatically. That’s a constant challenge for parents who want to help fund their children’s post-secondary education. Navigating those challenges becomes more complicated when the RESP subscriber or the beneficiary reside in different countries. This article gives you an informative overview of some of the most common challenges, and insight into the most effective ways to proactively manage an RESP as part of your cross-border tax and financial planning.
Navigating Residency and Income Sourcing for Internationally Mobile Employees in Canada
Traveling across national borders for employment is increasingly common, and many Canadians derive income while working in the U.S. Similarly, many U.S. residents visit Canada to work for Canadian employers. But doing so can potentially expose you to complex tax rules, liabilities, and double taxation. That’s why strategic cross-border tax planning is essential to ensure full compliance with the tax laws of both nations while helping to minimize the taxes you are obligated to pay. This blog explains the nuances of cross-border tax law, how those may impact you, and solutions for navigating the complicated tax regulations.
Navigating RRSPs/RRIFs/LIRAs/LIFs: Tax Planning for Canadians Moving to the U.S.
If you are planning to relocate from Canada to the United States, you will still want to hold on to the wealth potential of Canadian investment accounts. But there are special considerations and tax planning strategies for those who have Registered Retirement Savings Plans, Registered Retirement Income Funds, Locked-In Retirement Accounts, and/or Life Income Funds. This insightful article provides an overview of the applicable rules and regulations along with key strategies for optimizing your tax and wealth management planning. It also describes the kind of tax reporting that may be mandatory to ensure full compliance with the laws of both Canada and the U.S.
Options for Canadian Business Structures
Before you launch a business, be aware that there are various ways to legally incorporate in Canada. You can choose the simplest, which lets you operate as a sole proprietor; you can establish a partnership or limited liability company; or you can create a full-fledged corporation with shareholders. Each structure has its own unique pros and cons, depending on your goals and the nature of your business operations. Choosing the appropriate structure for your particular situation can also be a useful strategy for managing your taxes, and it may potentially reduce your tax liability.
The ABCs of RCAs
In eight Canadian provinces, people in the top tax bracket are subject to tax rates of over 50%, while those in the other two provinces pay 47.5% (or more). However, high income earners can save substantial amounts of retirement income by utilizing a lesser known strategy involving Retirement Compensation Arrangements (RCA). Those who can potentially benefit the most from this strategy include highly paid executives and business owners (or others such as professional athletes) whose compensation is tied to special incentives. Setting up an RCA is a rather complicated process, but the benefits are well worth it for those who are eligible – and can result in many thousands of dollars extra per year in retirement. Read the ABCs of RCAs blog for a detailed explanation of how to take advantage of this unique tax-saving approach to wealth management.
Cross-Border Tax & Financial Planning for Canadian Residents Consulting for U.S. Companies
There are significant financial planning and tax considerations for any Canadian resident who is paid to provide services to a U.S. company. This scenario is more common now than ever before, as the trend of performing remote cross-border work gains momentum. Persons such as consultants and independent contractors who do such work need to carefully consider the financial and taxation implications, and familiarize themselves with the applicable tax laws and reporting requirements. Only then will they be able to make informed decisions that are in their best interest and are fully compliant with tax laws, as explained in this article from Cardinal Point Wealth Management.
Will the U.S. Corporate Transparency Act Affect You?
The United States passed a new law, the U.S. Corporate Transparency Act (CTA), intended to prevent money laundering and other financial crimes. It includes rules requiring mandatory reporting to the U.S. Treasury for owners of many kinds of businesses, and failure to comply with the rules can trigger legal repercussions and penalties – even if you formed a U.S. business but reside in Canada. Even if the company, limited partnership, or other entity covered by the CTA is not currently active and was formed long ago, reporting is still required. But many entities and owners may also be eligible for dozens of exemptions – and they do not have to report. This Cardinal Wealth Management article provides a good overview of the CTA and what you may need to do before the deadline of January 1st, 2024 to prepare for it.
Devan Legare Featured in Article About Financial Education Within the Indigenous Community
Devan Legare, portfolio manager at Cardinal Point and co-founder of the Indigenous Finance Collective, is featured in a new article on Wealth Professional. There he discusses his mission to improve networking, financial education and literacy within the Indigenous community.
Probate Fee Planning: Understanding the Pros and Cons
There are fees or taxes associated with probate, which vary depending on the jurisdiction and can be quite high. Failing to plan carefully can result in greater tax liability and assets not being distributed among beneficiaries as intended. Fortunately, strategies to reduce those fees can have a significant impact on the distribution of wealth upon death. But while some strategies work in certain jurisdictions, they may not be applicable elsewhere. There are also special ways to reduce fees for those over the age of 65. While probate fee planning is a complex process, it’s valuable – and worthy of guidance from a qualified professional advisor.
Pension Options for the Canadian Business Owner-Managers Retirement
Planning for retirement is an important objective for owner-managers operating businesses in Canadian-controlled private corporations (CCPC). Their options include Registered Retirement Savings Plans, Canada Pension Plans, Quebec Pension Plans, or Individual Pension Plans. Generally, these are funded by the employer for the benefit of employees once they retire. They can either be funded only by the employer or may by the employer and the employee. Each plan has its own rules and timelines regarding contributions, contribution limits, and withdrawals – and there may be penalties for not adhering to the rules. Planning ahead with strategies based on your particular situation can help boost retirement savings. Learn more by reading our article devoted to this topic.
Canadian Business Owner-Manager Remuneration Planning
If you are an incorporated Canadian entrepreneur or business owner, there are two general ways to pay yourself from your corporation. You can use a salary or bonus, and that’s a deductible business expense but is fully taxable as your personal employment income. Or the company can pay a dividend that isn’t a deductible business expense but is taxed at a lower rate to you as personal income. Each option has different personal and corporate tax implications. There may also be some different tax rate advantages or disadvantages, depending on the province. Our article covers the details to provide understanding and strategic tax planning insights.
Will & Estate Planning Considerations for Canadians with U.S. Connections
If you or someone you wish to bequeath assets to in your estate plan is a “U.S. person,” according to the tax authority definition, there are estate planning strategies you can implement to minimize potential U.S. estate taxes. That kind of planning is particularly important if you anticipate exposure to such taxes in excess of the amount that may be protected by available deductions, exclusions, and treaty credits. When considering any proposed plan or strategy, it is also important to factor in the associated costs and ongoing compliance requirements. The applicable tax rules are extremely complicated, and it is strongly advised that you consult a qualified cross-border tax and financial estate planning professional.
Dual Tax Residency in a Canadian Context
Cross-border residency may create numerous significant Canadian tax issues for you, in both countries. That’s increasingly important since many people now work remotely across borders. Certain criteria are used to determine Canadian residency for tax purposes, but filing official forms to determine your tax status may also trigger reviews or audits that are not in your best interest. On the other hand, cross-border taxpayers may avoid double taxation thanks to treaties other countries sign with Canada. Tax rules are always complex, and those involving dual residency can be extremely complicated. That is why insight from an expert cross-border tax planning professional is strongly advised.
Communicating Your Estate Plan is a Vital Part of “The Estate Plan”
Estate planning is a vital part of financial planning and wealth management. But communicating your estate plans is equally vital, to ensure that your plans are executed according to your wishes. That’s especially true when it comes to communicating with the Executor of your estate and those who are designated with Power of Attorney for Property or Personal Care. Too often that communication is overlooked, but you can ensure that those designated persons are well-informed and prepared by writing them a letter that outlines their tasks and responsibilities. The following article includes more information, plus convenient, customizable templates to help you draft those vital communiqués.
Nannies, Housekeepers and Gardeners: U.S. Taxpayer Implications for Household Workers
If you are hiring a household worker in the United States, you need to have an understanding of their status related to income tax purposes and your obligations as the payor. The first thing to determine is whether the worker is an independent contractor or your employee. That status will determine the documentation required for the work agreement, payments made to and for the worker, as well as how you report their income paid by you. If you’re a Canadian resident, you’ll be interested in our next article on hiring household workers in Canada.
Canada’s Underused Housing Tax
The UHT is a new 1% tax on the ownership of vacant or underused housing in Canada, based on the property’s tax appraisal value. It is generally not applicable to Canadian tax residents, citizens, or permanent residents. But those who meet the definition of an “affected owner” must file an annual return (Form UHT-2900) or face significant financial penalties. There are certain exemptions, which depend on who occupied the home and how many days they lived there. Exemptions may also be available if the home isn’t suitable for year-round residency or was uninhabitable due to specific conditions outlined in the UHT rules. Professional tax planning guidance is recommended to assess your options/obligations before the tax deadline.
Fiduciary Standard or a Pretender
A Cardinal Point advisor adheres rigorously to the fiduciary standard—a commitment that puts your interests ahead of those of Cardinal Point or any outside organization. Some financial advisors do not; instead, they skew their advice and investment options to ones which benefit them. For Cardinal Point clients, it is most reassuring to know that all recommendations must be made with only one concern: that this is the best thing for you.
Ebook: Canadian Deductibility of 401(K) Contributions and U.S. Deductibility of RRSP Contributions
Residents of Canada: What are the Canadian and U.S. Tax Ramifications when being forced to liquidate a U.S. brokerage account Ebook
Clarifying the U.S. Minimum Distribution Rules
Regulations around Required Minimum Distributions (RMDs) are quite complex and simultaneously extremely important. Failing to take an RMD will result in a 50% excise tax. There is a precise calculation to determine an RMD amount for a given year, and you can delay your first RMD. There are specific situations that permit extending the period in which you must take a distribution and rules that apply in the event of death. There are regulations around RMDs applicable to inherited accounts, and these have completely changed since passage of the SECURE Act in 2019. Opportunities exist to delay RMDs for a Designated Beneficiary not yet chosen. There are a multitude of tax implications around all of these issues, and Cardinal Point is eminently qualified to offer you tailored guidance in your planning strategies.
Ebook: Cross Border Retirement Income: Canada Pension Plans, Canadian Old Age Security…
Those who have worked in both Canada and the U.S. may be eligible for Social Security (SS), Canada Pension Plan (CPP) and Canadian Old Age Security (OAS), but it can be complicated. While SS depends on years worked, OAS is based on years of Canadian residency, and CPP is based on contributions. You may be able to take early reduced benefits or delay them to receive increased payouts. There may be clawbacks based on income levels…
Ebook: Am I a U.S. Tax Resident?
While it is common knowledge that U.S. citizens and green card holders are responsible for filing U.S. tax returns, most people who move to the U.S. on a non-resident visa – such as a TN, E1 or E2, O-1, L-1 – are unfamiliar with the U.S. tax residency rules that can subject them to U.S. taxation on their worldwide income.
Ten Reasons Why Working with One Financial Advisor Is Better Than Two
It may be tempting to consider splitting your investment assets between two advisors. You may be surprised, though, by how many good reasons there are to not do so. This is particularly true for people living a cross-border lifestyle; keeping a home country advisor when you move increases reporting requirements, the number of tax filings, and, possibly, tax liability…
Cross-border Canadian Departure Checklist when moving to the U.S. Ebook
Before Canadians become permanent residents of the U.S., it is important to understand and prepare for the significant differences between these countries as to cross-border financial planning. Mistakes and missed deadlines in these matters can be costly. There are many considerations. Some are obvious, but many are not.
Kris Rossignoli featured in a Financial Post Article, “Getting remarried? Here are some…” | Canada US Border Tax
Americans Exiting Canada Understanding the Five-Year Deemed Disposition Rule eBook
A very common question at Cardinal Point for Americans moving to Canada is how to navigate around the CRA’s Five-year Deemed Disposition Rule. Canada applies an exit tax on unrealized capital gains for Americans returning to the U.S. after minimum five years of tax residency in Canada. Given the increased information sharing between CRA and IRS, failure to file the appropriate forms will result in penalties.
RT Mosaic Wealth Management to Join Focus Partner Firm Cardinal Point, Increasing Cardinal Point’s Scale and Enhancing Its Western Canadian Presence
EBook: The Health Savings Account in a Canada-U.S. Context
A good savings or investment account allows you to avoid tax on contributions, income, and distribution. Not all available options meet these goals. For Americans living in the U.S., the Health Savings Account (HSA) does, in certain circumstances. For Americans living in Canada, though, the HSA’s benefits disappear as contributions cannot continue and tax liability opens up in Canada for income in the plan. Similarly for Canadians living in the U.S., benefits cease for Tax-Free Savings Accounts (TFSAs) and Registered Education Savings Plans (RESPs). Take a look at this e-book for more detail on the savings and investment plans available and see how they compare.
Infographic: Can A Foreign Spouse Claim U.S. Social Security?
US Taxation of Your Canadian Rental Home
For Canadians moving to the U.S., the options for their home are to sell it, to keep it as a secondary residence, or to rent it. Each has its pros and cons.
Choosing to rent creates tax and capital gains issues in Canada and in the U.S., ongoing tax filing requirements, and the need for a dependable local property manager. Decisions need to be made in a timely way to maximize available tax exemptions. It is complicated, but it may be a wise choice. Cardinal Point’s cross-border specialists can help you decide if it is right for your specific situation and then show you how to use the Canada/U.S. Tax Treaty provisions to your advantage.
Ebook: U.S. IRAs Can Be a Taxing Issue for Canadian Beneficiaries
A Canadian inheriting a U.S. IRA faces different tax implications than an inheritance in Canada would generate, namely, income tax and income withholding in the U.S. and income tax in Canada. It may be possible, though, for such a beneficiary to defer taxes in both countries by establishing an Inherited IRA account.
Social Security vs. Distributions in a Down Market
When markets decline, there can be a temptation to begin taking government retirement benefits (Social Security, Canada Pension Plan, Old Age Security) early to allow your portfolio time to recover. But there are a multitude of factors to consider in deciding, such as rate of return assumptions, life expectancy, spousal benefits, and how benefits will impact tax planning. Also, what you need to consider varies from one type of retirement benefits to another.
Ebook: Income Tax Implications of RRSP Withdrawals as a Non-Resident of Canada
There are many income tax implications to leaving Canada and establishing tax residency in the US. Ask Cardinal Point about its many publications on this topic. The tax issues become very complicated when a nonresident of Canada takes an early distribution of a Registered Retirement Savings Plan (RRSP). Cardinal Point, registered and licensed in Canada and the US, is well-positioned to provide financial, tax, and investment advice. Their approach is to manage investment and tax accounts on a Canada/US tax-effective basis, ensuring that Canadian withholding tax paid can be recovered over time.
Press Release: Pro Ice Management Group Team to Join Focus Partner Firm Cardinal Point
Focus Financial Partners Inc. (NASDAQ:FOCS) (“Focus”), a leading partnership of independent, fiduciary wealth management firms, announced today that the team from Pro Ice Management Group Inc. (“Pro Ice”) will join Cardinal Point Capital Management ULC (“Cardinal Point”). The Pro Ice team is expected to join Cardinal Point in the third quarter of 2022.
Infographic: Canadian Expat – Selling Your Principal Residence
For individuals moving from Canada to the U. S. and planning to sell their Canadian home, there are different Canadian and U.S. tax implications. To avoid or minimize tax liability, specific criteria need to be met around the questions of whether tax residency is in Canada or U.S. when the sale occurs and if the home qualifies as a principal residence. If sold while still a Canadian tax resident, a status that can be maintained for a period beyond the moving date, exemptions apply. Additional compliance requirements need to be met when the property is sold by a U.S. tax resident.
Infographic: U.S. IRAs Can Be a Taxing Issue for Canadian Beneficiaries
A Canadian inheriting a U.S. IRA faces different tax implications than an inheritance in Canada would generate, namely, income tax and income withholding in the U.S. and income tax in Canada…
Deemed Departure Tax Canada
For Canadian tax residents moving to another country, the Canadian Deemed Departure Tax has significant and complex ramifications that should be carefully considered. Advice in advance of a move from a qualified cross-border tax specialist and financial planner can reveal strategies to best prepare yourself for this tax, including possible exemptions and deferrals.
Moving from Canada to the U.S. – What you need to know Ebook
If you are considering moving from Canada to the US, you should plan well in advance—especially for financial and tax considerations. Residency is a key tax issue, and as it is not specifically defined but more inferred by the Canada Revenue Agency, extreme care must be taken to ensure compliance. Cardinal Point specializes in precisely these issues and can offer you a complete checklist of very specific actions to take as you move through this complicated process as well as expertise in both Canadian and US investment opportunities.
Retirement Planning: Three Simple Questions
Perhaps you have your financial house in order for retirement. But have you thought through questions around how long and how well you will live when you’re retired? Non financial issues are often neglected, and yet they are often the ones with greater impact on your quality of life. Ask yourself these three seemingly simple questions. Your answers should guide you to a more satisfying retirement.
East Coast Taxes for Retired Divorced U.S. Citizen
Where is the right place to retire – Canada or USA? Which province or state? These are difficult questions with lots of factors to consider, many of which are personal. Taxes should not be the most important issue, but neither should it be ignored. Cardinal Point’s experts can guide you through the implications of each option you are considering.
Secure Act 2.0: What You Need To Know
There are a number of rules changes proposed by Congress that will impact retirement accounts. The changes will benefit US residents and also Canadians with IRAs and other retirement accounts. There are many ways this could be advantageous for you, possibly deferring tax or extending benefits. Cardinal Point, as the leading cross-border specialist, can show you how.
Infographic: Lifetime Capital Gains Exemption & Qualified Small Business Corporation
The Lifetime Capital Gains Exemption (LCGE) is available to all Canadian residents and Americans living in Canada as a tax deduction on the sale of a Qualified Small Business Corporation (QSBC). It is indexed to inflation, and it can be used in part. Three tests must be met to claim an LCGE, and there are complicated regulations governing each of these.
Infographic: Cross-Border Implications of Holding a 529 Plan Infographic
Canadian families returning to Canada from the US must consider significant tax implications associated with any existing 529 Plans, including whether a Canadian higher education institution is eligible under the Plan. Also, there is the likelihood of new Canadian tax liability as well as the possibility the 529 may be deemed a resident trust. Transferring ownership of the 529 may avoid triggering new taxes.
West Coast Taxes for Retired Divorced U.S. Citizen
Overview of U.S. Expatriation
US citizens who renounce citizenship or Green Card Holders who surrender their Green Cards may be subject to US Expatriation Tax. If you are considering this, it might be wise to seek advice about questions around citizenship, long-term residency, and Covered Expatriate status, as well as the required forms, applicable rules, and tests surrounding this tax. Cardinal Point has the answers to these complex issues and offers advice specific to your unique circumstances.
Cross-border Wealth Management – Canadian Residents with U.S. Real Property
For Canadians owning property in the US but with no residency or tax ties there, the question of how to pass such property on to their heirs is much more complex than they may think. A seemingly generous but in reality ill-advised decision can have massive negative financial implications. Relevant Canadian and US tax regulations, forms, and exemptions frequently change. Cross-border financial and tax expertise is needed to navigate here, and at Cardinal Point, we specialize in precisely these areas.
New E-Book: Options for U.S. IRA account holders when living in Canada
Few financial advisors are licensed or equipped to provide investment advice for American and Canadian cross-border clients, and there is a lot of bad counsel circulating at present. The best advice usually leads to a choice from three main options, but which one? Cardinal Point is an advisor firm that specializes in this area as it meets the highest industry standards and is licensed to manage investments in both countries.
Cross-Border Financial Planning: Currency Conversion Considerations
While currency exchange is not recommended for speculation, many clients will need a different currency in the future. For them, fluctuations in currency exchange markets create opportunities to time conversions that need to be made eventually. However, there are numerous factors to consider beforehand, such as when the need will be, capital gains tax questions, historical averages, conversion costs, and availability of investment opportunities.
New E-Book: Lifetime Capital Gains Exemption & Qualified Small Business Corporation
The Lifetime Capital Gains Exemption (LCGE) is available to all Canadian residents and Americans living in Canada as a tax deduction on the sale of a Qualified Small Business Corporation (QSBC). It is indexed to inflation, and it can be used in part. Three tests must be met to claim an LCGE, and there are complicated regulations governing each of these. There are implications regarding succession planning, and its benefits can be multiplied through use of family trusts. An LCGE can be a significant deduction, and Canadian or dual Canada/US tax residents need professional help devising a tax-efficient strategy.
CRA & IRS Administrative Issues Cross-Border Tax Filers Should Be Aware of
Administrative challenges inherent in the IRS and CRA create serious roadblocks to efficient tax filing for cross-border taxpayers. This is particularly true for Canadians claiming foreign tax credits on Canadian returns; they are often asked via a Review Letter from the CRA for a U.S. Tax Account Transcript. Because of severe IRA backlogs, obtaining this document can be difficult in the extreme, but Cardinal Point has had success arranging CRA filing extensions, thus avoiding undue tax and penalties.
New Ebook: Cross-Border Implications of Holding a 529 Plan
Many Canadians move for career opportunities to the U.S., work and raise families, and then plan to relocate back to Canada. A qualified tuition and educational savings plan for children (a 529 plan) is exempt from taxation in the U.S., in most cases even when a child attends a Canadian university. If you are a Canadian who is considering such a plan, and especially for anyone with an investment in a 529 plan who is moving back to Canada, clear expert advice from a cross-border financial specialist is a very prudent step.
Lifetime Capital Gains Exemption & QSBC
The Lifetime Capital Gains Exemption (“LCGE”) is a once-in-a-lifetime tax deduction that is available for every Canadian resident individual on up to $883,384 CAD (2020, and indexed to inflation on an annual basis) of capital gains realized on the sale of Qualified Small Business Corporation (“QSBC”) shares and certain other capital properties. In order to claim the LCGE, the capital gain must be realized by an individual, trust, or partnership (with the gain allocated to an individual) with an available LCGE balance.
Stock Market Integrity
Financial service providers who accept commission based on the investment vehicles they recommend are inherently conflicted. Cardinal Point’s only revenue source is fees directly paid by clients which places their interests ahead of our own. Cardinal Point advocates tighter regulation generally for investment advisors. There are also good reasons supporting proposed congressional bills to ban U.S. legislators from trading individual stocks. Existing laws are inadequate, and temptation to use nonpublic information for personal gain is high.
Infographic: Income Tax Implications of RRSP Withdrawals as a Non-Resident of Canada
If you have moved from Canada to the U.S., the normal intricacies of tax issues become particularly complicated in certain circumstances.
Thriving in Retirement Using Positive Psychology
Getting the most from your retirement requires nonfinancial as well as financial planning. You can use Positive Psychology concepts to help put in place goals and structures tailored just for you.
Infographic: Options for U.S. IRA account holders when living in Canada
Few financial advisors are licensed or equipped to provide investment advice for American and Canadian cross-border clients, and there is a lot of bad counsel circulating at present. The best advice usually leads to a choice from three main options, but which one?
Qualified Employee Stock Purchase Plans: Cross-Border Financial Planning
One of the many ways for employers to compensate employees beyond salaries is via an Employee Stock Purchase Plan (ESPP). Ensuring that you maximize the benefit of an ESPP while minimizing the tax burden is particularly important in cross-border tax situations.
ISOs capital management | Canadian vs U.S. Residency
In this article, we will focus on Incentive Stock Options (ISOs) granted to key employees. In an era of remote employment, a firm understanding of the tax implications is critical where cross-border circumstances exist.
Cardinal Point Wealth Management’s Kris Rossignoli featured in the Financial Post
Kris Rossignoli, Cardinal Point’s Private Tax Manager, was recently featured in an article about using trusts to protect wealth in the Financial Post. Check out the highlights in this blog post.
Non Financial Retirement Planning
Thorough retirement planning is about more than just finances. Sure, it’s important to have a large enough nest egg to support your desired lifestyle during those golden years. But where do you want to live? What do you want to do? Who do you want to do it with? In this blog post, I’ll help you explore the other details you need to consider before you make the transition from worker to retiree.
Cardinal Point Wealth Management’s Matt Carvalho Featured in Citywire
Cardinal Point’s CIO Matt Carvalho was recently featured in an article in Citywire. Check out the highlights in this blog post.
Rental and Sale of Your Canadian Home as a Non-Resident of Canada
If you’re a non-resident of Canada but are planning to rent out or sell a home you own within the country, you’ll face certain tax consequences. In this blog post, we’ll take a look at the most common tax obligations associated with both rental and sale of a Canadian principal residence.
Update to Required Minimum Distributions
Good news on the tax front as the IRS lengthens life expectancies for its RMDs. The result of this may be an effective tax cut for you. If you are a US citizen or expat living in Canada, Cardinal Point Wealth Management can assist with complicated cross-border financial and tax planning.
Canada Non Resident Tax – Cardinal Point Wealth Management
If you’re a non-resident of Canada but receive income from sources within the country, you may still have Canadian tax obligations. In this blog post, we’ll take a closer look at Part XIII and Part I tax laws and how they may apply to your situation.
Cardinal Point Wealth Management’s Terry Ritchie Featured on MDRT
Cardinal Point’s Vice President Terry Ritchie was recently featured in an article on MDRT, the website for the premier association of financial professionals. Check out the highlights in this blog post.
The Value of Diversification Looking Towards 2022
Financial planning doesn’t come with a crystal ball. No one—not even the best investment consultant—can say with absolute certainty how the market will move over a given period of time. We can, however, make predictions based on historical trends while diversifying the portfolios we manage in such a way as to capitalize on possible growth and mitigate potential loss. Learn more about how we do so in this article and explore our vision for the coming year.
Planning a move to Canada? Understand Canadian tax residency rules
Moving to Canada from the U.S. or any other country will have tax implications, which are often quite complex. Learn more about the way tax liability in Canada is determined and how this may impact you in this article.
Planning a move to the U.S.? Understand U.S. tax residency rules
Moving to the U.S. from Canada or any other country will have tax implications, which are often quite complex. Learn more about the way tax liability in the U.S. is determined and how this may impact you in this article.
Winter 2021 U.S. Income Tax Highlights
Here we are again! We are almost at the end of the year and Congress is debating and tweaking a bill that would significantly change tax law. If implemented, these changes would have important implications for future tax years and there is planning that would need to be executed now for certain taxpayers. In this case, the year is 2021, and the bill is the 2,135 page Build Back Better Act (BBBA). The effective dates of the various tax measures are mostly for years starting after December 31, 2021.
Winter 2021 Canadian Income Tax Highlights
Tax law in Canada was fairly stable in 2021 but Tax Brackets continue to creep up since they are indexed to inflation. The inflation factor was actually only 1% for 2021, so the changes to the brackets were minimal. The federal tax rates themselves did not change substantially.
December 2021 Income Tax Highlights for U.S. Citizens living in Canada
If you are a U.S. citizen living in Canada, you probably know that one of the responsibilities attached to United States citizenship is to file an annual income tax return reporting your worldwide income, unless you are under the filing threshold. You will also pay U.S. income taxes, to the extent they are not offset by foreign tax credits for taxes legally paid or payable to Canada – your country of Tax Residence.
Canadian ‘Change of Use’ Rules for Cross-Border Real Estate
When our clients move from Canada to the U.S. or vice versa, they often leave real estate behind. While some choose to sell their former residence, others want to convert it into a rental property. Whichever action they take, tax considerations must be made. Learn more about the Canadian ‘change of use’ rules that should influence these decisions in this article.
Cardinal Point Wealth Management’s Terry Ritchie Featured in the Vancouver Sun
Cardinal Point’s Vice President Terry Ritchie was recently featured in an article in the Vancouver Sun. Check out the highlights in this blog post.
Cardinal Point Wealth Management’s Jeff Sheldon Featured in InvestmentNews
Cardinal Point’s founder Jeff Sheldon was recently featured in InvestmentNews. Check out the highlights in this blog post.
Matt Carvalho Featured in CityWire Canada Article
Cardinal Point Wealth Management’s own Matt Carvalho, Chief Investment Officer, was recently featured in a CityWire Canada article titled, “It’s not always this good: Advisors make the case for fixed income.” View the article
Does the Timing of Required Minimum Distributions Matter?
The answer is a resounding yes. If you’re 72 years of age or older and need to meet the minimum distribution requirements for your qualified retirement plans each year, several factors need to be considered when determining the best time to do so. Learn more about them in this blog post.
Cardinal Point to Join Focus as a New Partner Firm, Bringing Cross-Border Tax and Wealth Management Expertise to the Focus Partnership
Focus Financial Partners Inc. (NASDAQ: FOCS) (“Focus”), a leading partnership of independent, fiduciary wealth management firms, announced today that Cardinal Point Capital Management Inc. and Cardinal Point Wealth Management, LLC (together, “Cardinal Point”) have entered into a definitive agreement to join the Focus partnership. The transaction is expected to close in the fourth quarter of 2021, subject to the receipt of regulatory approval and other customary closing conditions.
The British Columbia (BC) Speculation and Vacancy Tax
If you’ve been living in the US or elsewhere abroad and plan to purchase property in British Columbia in the future, you are going to encounter the SVT or BC Speculation and Vacancy Tax. Designed to address real estate affordability, the tax is imposed annually based on factors including residency status and where you derive and report your income. Learn more about the SVT and its complex cross-border implications in this article.
Combating Inflation Risk Within a Diversified Portfolio
If you have been paying any attention to economic news lately, you’ve likely been inundated with articles about inflation. While some economic media outlets are predicting sustained inflation over 3%, it is truly impossible for anyone to know what the future may hold. That is why our Investment Committee continuously meets to review market conditions and discuss any additions that may provide value to our client portfolios. Learn more about how we combat inflation risk with diversification in this article.
Structuring Options for a Canadian Owning U.S. Vacation Property
Home equity in Canada has significantly increased, and some Canadians are now thinking about purchasing vacation homes. Thanks to a favorable Canadian-to-U.S. dollar exchange rate, many of them are also considering the U.S. as the possible location of such vacation property. If you are among them, you need to consider your wealth structuring options before you make a purchase. Learn more in this article.
Terry Ritchie on Life and Retirement Traps for Cross-Border Clients
From dangerous assumptions and differing tax rules to inadequate health coverage and life insurance considerations, there are several common traps U.S. retirees moving to Canada may face without the guidance of a cross-border wealth manager. Terry Ritchie recently shared his insight into these traps with ThinkAdvisor, an online resource for financial and investment advisors.
The Health Savings Account in a Canada-U.S. Context
Everyone should save for retirement and rainy days. However, once you’ve established an emergency fund in a basic savings account, the decisions you’ll need to make about how to invest your money become more complex. This is doubly so if you’re moving from the U.S. to Canada or living cross-border. In this article, we’ll take a look at why health savings accounts (HSAs), which are tax friendly in the U.S., may not be as tax friendly in Canada.
The Importance of Neighborhood Choice When Moving Cross Border
With so many factors to consider when planning a move across the Canada/U.S. border, it is easy to neglect researching the history and ethnic diversity of the neighborhoods in which you may want to buy your new home. Learn more about why these details matter in this firsthand account of one family’s experience.
How Much Risk is There in Bonds?
With recent headlines touting hidden bond risks, you may be wondering if you should be concerned about your bond holdings. In this piece we’ll take a look at why Cardinal Point views bonds as a means to provide stability in client portfolios and not an area of dramatic long-term risk.
Should You Consider a Continuing Care Retirement Community?
Whether you’re planning your own retirement or helping an older relative with his or her later-life decisions, a continuing care retirement community may be a good housing option. In this blog post, we’ll take a look at the definition of continuing care, the various levels available, and other considerations to make when evaluating facilities.
Environmental, Social, and Corporate Governance Investing
Would you like to align your investments with your personal views? If so, ESG investing—also known as socially responsible investing or impact investing—may be for you. In this blog post, we’ll take a brief look at recent growth in this investing model as well as the various factors evaluated within it.
Moving to Canada Amidst COVID-19
At present, only Canadian citizens or permanent residents of Canada are permitted to enter the country. If you’re planning to move to Canada during this pandemic, you’ll need dual citizenship or to travel as the immediate or extended family member of a Canadian citizen. You’ll also have to follow specific protocols before and after entry into the country
An Alternative Cross-Border Lifestyle
Scott and Marie McFarland lived and worked in Canada for many years as well as in the U.S. for a time. They eventually retired to the United States, choosing the Sun Belt as their home. The McFarlands are not wealthy. However, they will gladly tell you that they feel rich.
Canada Non-Resident Planning: A Guide to Retirement Account Unlocking
Canada Non-Resident Planning: A Guide to Unlocking Your Retirement Account
Are you a former Canadian resident with a Canada-based retirement account or pension? If so, and you’ve permanently departed the country, you may be able to unlock these retirement savings. In this blog post, we’ll explore the various provincial rules surrounding this opportunity.
Does Canada have a Tax Treaty with the US?
What You Need to Know About the Canada and U.S. Tax Treaty
Are you considered a taxpayer in both the U.S. and Canada? If so, a better understanding of the two countries’ income tax treaty—established in 1980—may help you minimize your tax burden. In this blog post, we dissect several examples of residency and the treaty’s implications.
Family Financial Matters Meetings
From insurance policies to checking and saving accounts, loan payments, and other monthly bills, who will handle your assets and obligations should you die unexpectedly? If 2020 has taught us anything it’s that unpleasant surprises are always possible. Meeting annually with your spouse, significant other, or a trusted family member or friend to go over your financial and personal wishes can give you peace of mind in an otherwise uncertain world. Learn more about the details you should review in this article.
Hedging Currency in your Portfolio
Do you have assets in two or more countries? If so, you’ll want to read this blog post about managing the different currencies in your portfolio. In it, you’ll learn more about Cardinal Point’s philosophy on currency hedging including considering your future income needs.
Estate Planning when moving from the U.S. to Quebec
If you’re a Canadian living in the U.S. or elsewhere in Canada and planning a return to your home province of Quebec, there are a number of factors you’ll need to consider including the ramifications of such a move on your current estate plan. In this article, we’ll take a closer look at differences between Common Law and Civil Law and how they relate to estate planning.
Gifting Strategy for U.S. Citizens with a Non-U.S. Citizen Spouse Planning a Relocation to Canada
There are notable instances where having a non-U.S. citizen spouse results in complications when it comes to tax and estate planning. For example, there is no estate tax marital deduction when the donee spouse is not a U.S. citizen unless a QDOT, a form of qualified domestic trust, is used. This QDOT structure is not an ideal planning structure in many situations.
What’s in Your Index?
It is estimated that over $11 trillion USD is indexed or benchmarked to the S&P 500 index, or what many investors consider ‘the market.’ However, while that index does capture a good chunk of the public stock market capitalization in the U.S., it omits the rest of the globe. The criteria by which companies are included—which involve a secret selection committee and very general guidelines—are also somewhat murky.
Matt Carvalho, CIO, Featured in ETF.com
Matt Carvalho, CIO, was recently interviewed by ETF.com and discussed an ETF addition to our core broad market allocation. As a new year approaches, it’s a natural time to review your investments and make any necessary changes. If you think this may include adding additional ETFs to your portfolio, this article on the picks of […]
Should I Be Triggering Capital Gains Before December 31st?
As a result of COVID-19 and numerous other economic factors, the fiscal climate going into 2021 is relatively uncertain. Canada and the U.S., along with essentially every other country in the world, have significant government deficits to repay. There has been much talk about how this will be accomplished, and an increase to capital gain tax rates is a commonly referenced possible solution. The below outlines the current tax treatment of capital gains in Canada and the U.S., the appetite for change in each country, and a few questions to ask your financial planner about realizing capital gains before December 31, 2020.
Terry Ritchie on Sending Money Between the U.S. and Canada
Cross-Border Implications of Holding a 529 Plan
529 plans are a popular U.S. higher education savings option. However, if you have any intention to move back to Canada in the future or think your child might choose to attend a college or university outside the U.S., you should consider the possible tax implications before investing in a 529 plan. Learn more about how these plans work and cross-border tax considerations in this article.
Moving Across the Border and Leaving Your Aging Parents Behind
The senior population—defined as those age 65 and older—is exploding in both the U.S. and Canada. If you’re planning a move across the border for work or retirement, it’s likely you have an aging family member or two to consider. In this article, we’ll explore the documents you need to have in order as well as other steps to take before you relocate away from the senior citizens you love.
What can Snowbirds do with their U.S. Vacation Property During the Pandemic?
Thanks to COVID-19, fleeing Canada’s winter will be impossible for many snowbirds this year. But what should you do with your U.S. vacation home when you’re unable to visit? From renting to selling, Cardinal Point Wealth Management’s Vice President, Terry Ritchie, shares his insight into associated tax implications in an article for The Globe and Mail.
Terry Ritchie in Podcast: Tax Implications for Americans Living in Canada
Canada – Can I Deduct Home Office Expenses During COVID-19?
Have you been working from home as a result of a stay-at-home order in your area during the COVID-19 pandemic? If so, you may be able to deduct related expenses from your 2020 Canadian personal income tax return. In this article, we will discuss specific qualifying conditions that must be met as well as eligible expenses and necessary supporting documentation.
Silver Linings – Financial Planning Opportunities During the Coronavirus Turmoil
As the old saying goes, every cloud has a silver lining. While the past month has brought the steepest stock market correction in history along with unprecedented volatility, it has also created a number of positive opportunities for Cardinal Point clients. In this article, we’ll take a look at a few metaphorical silver linings including why our current economic environment is prime time for tax-loss harvesting, mortgage refinancing, and currency conversion.
Terry Ritchie on Unraveling Cross-Border Financial Planning
Snap Projections, a financial planning software company, recently featured Cardinal Point’s Partner and Director of Cross Border Wealth Services, Terry Ritchie, on their Growing Your Financial Advisory Practice podcast. Given Terry’s more than 30 years of experience in cross-border financial, investment, tax, and estate planning, it’s no surprise that Snap Projections chose to tap into his insight for this primer directed at financial planners who want to serve US-Canada clients.
Sweeping New Changes to U.S. Based Retirement Accounts in 2020
Terry Ritchie featured in article, “Could cross-border partnerships be the key to serving ex-pat clients?”
In today’s increasingly mobile society, it’s not that unusual for people to give up residency in their nation of birth in order to work or retire in another country. In fact, according to the United Nations Department of Economic and Social Affairs, there were an estimated 271,642,105 ex-pats around the world in 2019. But what does this globetrotting mean for the financial professionals who advise them?
The Politics of Investing
We all know politics is an uncomfortable topic for many people. In fact, a recent research paper from the University of Nebraska found that politics was making Americans physically sick. According to the study, nearly 40% of Americans reported that they were stressed out by politics, while 20% said they were losing sleep over politics. In recent conversations with clients, politics is certainly on many people’s mind and is hard to avoid.
Cardinal Point Wealth Management Featured in ETF.com
Terry Ritchie, Director of Cross-Border Wealth Services, and Matt Carvalho, CIO, recently sat down with Lara Crigger at ETF.com and discussed some of the tricky aspects of moving abroad. When your expenses are in a different currency from your income, currency hedges and dollar-cost-averaging are normal ways to deal with uncertainties in global markets. But […]
The Key
My typical days the last 16 years may involve some combination of reading the latest academic research paper, running different scenarios of minor adjustments to a model portfolio or keeping tabs on the newest investment vehicles available to clients- all in the hopes of trying to eek out a few extra basis points of return. When this far in the weeds, it can be easy to forget the reasons we invest our money in the first place.
Health Insurance Options for Seniors Moving to the U.S.
One of the most important considerations for Canadians moving to the U.S. is health insurance. Coverage in the U.S. can be expensive, especially for those with pre-exisiting conditions. Find out how long it would take you to qualify for Medicare and what some of your other health care options are in the U.S.
Understanding the Canada-U.S. Totalization Agreement
Many Canadians and Americans face the reality of a career that spans both sides of the 49th parallel. Amidst an era of globalization, it is common for promotions to create cross border opportunities and for company restructurings to force a long-term cross border move. The result of having a career on both sides of the […]
Managing Exchange Rate Risk
Where do you see the exchange rate going? This is a common question amongst our client base, many of whom enjoy a cross border lifestyle. In fact, as Americans living in Canada may have noticed, the exchange rate is right up there with hockey and the weather in Canada’s national conversation. The trouble is, accurately […]
Cross Border Retirement Income: Canada Pension Plans, Canadian Old Age Security, U.S. Social Security and the Windfall Elimination Provision
Calling all eligible benefit holders of the Canada Pension Plan (CPP), Canadian Old Age Security (OAS) and U.S. Social Security (SS)… Does your or your spouse’s story narrate a history of employment in both Canada and the U.S.? If so, you may have the privilege of drawing from SS, OAS and CPP. The confusion lies […]
Terry Ritchie in “Weak loonie, competition from U.S. home buyers work against Canadian snowbirds”
In past years, with a strong Canadian dollar, Canadian Snowbirds were able to pick up investment properties or vacation homes in popular locations such as Arizona, California and Florida. With a softer Canadian dollar, snowbirds are finding some competition for these types of homes. Cardinal Point Capital Management’s Terry Ritchie discusses the current state of […]
Terry Ritchie in “Yes, you can buy your way into U.S. citizenship”
For Canadians looking to move to the U.S. permanently, one increasingly popular option is the EB-5 Immigrant Investor Program. This program, created by Congress in 1990, is known as the “million dollar green card” and offers a green card and a path to citizenship for an investment of between $500,000 and $1 million USD. Conditions […]
Cross Border Transition Planning – RESPs
“How do I move my financial life to another country?” It’s a question we hear from many clients as they begin making a cross-border transition. When you are making the move to the U.S., you want to transition your finances smoothly and seamlessly while saving time, headaches, and every dollar you possibly can. Much like […]
Cross-border Canadian Departure Checklist when moving to the U.S.
Canadians become permanent residents of the U.S. for many personal and professional reasons. Prior to a move, it’s important to be organized and understand that significant differences exist between Canada and the U.S. when it comes to cross-border financial planning and investment matters. The following actionable items should be considered when cross-border transition planning from […]
All for Naught?
As we approach the end of the year, it’s natural to take stock of how everything in our life is going: family, health, wealth and more. But when we reflect back, we may find that our wealth, at least that part which is tied to the stocks markets, probably hasn’t performed all that well in […]
Retirement Compensation Arrangements: Are They Right For You?
Navigating Retirement Planning: Evaluating the Suitability of Retirement Compensation Arrangements A Retirement Compensation arrangement is perhaps the most effective and misunderstood tax deferment opportunity that exists in Canada today. It may be used for a wide range of situations, including small business owners, athletes, incorporated professionals, highly paid executives receiving yearly bonuses, and those approaching […]
Cardinal Point Featured at CFA SF Society Event
Cardinal Point was founded with the idea of delivering an exceptional client experience and world class expertise to clients with Canada-U.S. cross-border financial planning considerations. Cardinal Point is dedicated to meeting the needs of our clients in the areas of capital preservation, tax planning, risk management, and delivery of long-term investment returns through varying economic […]
An Income Tax Comparison: Moving from Ontario to Florida
While many people are drawn to Florida for its endless sunshine and warm nights, the argument in favor of moving south becomes even more compelling when examining the tax environment between Canada and Florida. In this blog, we will examine the tax rates for a Canadian province and a sunshine state (Ontario to Florida) from […]
Residents of Canada: Tax Ramifications of being forced to liquidate a U.S. retirement account
As mentioned in a previous article, many banks and brokerage firms are informing U.S. non-resident clients that they are no longer able to service their accounts and that their accounts have been restricted or even closed. In that same article, we outlined the following: U.S. citizens and Green Card holders who reside in Canada or […]
Why Invest Internationally?
Diversification is the most important concept in investing, but also perhaps the least exciting. If anyone knew for sure exactly which one company or country would have the highest return in the coming year,- there would be no reason to hold anything else. But while being able to predict markets with any certainty sounds great in theory,- in practice nobody has been able to consistently outsmart the market. So what do you do if you can’t predict be the best performing stock or sector in the coming year? You diversify.
Stock Market Volatility Is Nothing New
It’s common to hear about the long-term investment averages that we’ve all become accustomed to. Conventional wisdom says that over the long run stocks should earn something like 10% per year. And in that regard, the conventional wisdom is actually pretty good. Over the last 30 years through the end of 2017, the annualized return […]
Terry Ritchie featured in the Globe and Mail: Foreign Exchange
Terry Ritchie gives his insights and tips when dealing with foreign exchange options. From the Globe and Mail article: “I’m not a big fan of the banks,” said Terry Ritchie, a financial adviser who works both sides of the Canada-U.S. border. “They’re great for convenience. But if you can take the time and wait a […]
How a U.S. resident can receive tax-free alimony from a Canadian
While most people know that alimony is normally taxable income to the recipient and tax deductible by the payer, in the case of cross-border taxes, alimony can be received tax free while the payer still gets a tax deduction. Let’s look at an example where this would apply. Sarah is a U.S. Citizen who has […]
Residents of Canada: What are the Canadian and U.S. Tax Ramifications when being forced to liquidate a U.S. brokerage account.
As noted by several articles that have been published, many banks and brokerage firms, including Wells Fargo, Morgan Stanley, Fidelity, and others, are informing U.S. non-resident clients that they are no longer able to service their accounts and that their accounts have been restricted or even closed. In this case, the term “non-resident” is not […]
Don’t Settle: Choose wisely when selecting a cross-border wealth management firm
Your whole life you have done things correctly: worked hard, saved and prudently invested your money. Then one day, out of the blue, you receive a letter from your U.S. investment management firm saying they no longer want to work with you because you reside outside of the U.S. Worse yet, they give you 90 […]
How California Taxes a Canadian Trust
As we discussed in a previous article, many Canadians are shocked to learn that California taxes their RRSPs. Canadians are often also surprised and dismayed to learn that their Canadian trust could be subject, inadvertently, to the long arm of California’s tax system. Even just having a beneficiary – think trust fund baby – of […]
Canadian Expat – Principal Residence
Question: I am looking to move to the U.S. and am not sure if I will sell my home before I leave Canada. Could you please outline the tax ramifications if I were to sell it before departing Canada versus selling while a tax resident of the U.S.? Answer: You have requested that we provide […]
American Taxpayers Immigrating to Canada: Maximizing the Roth Conversion Strategy
Starting a new chapter in your life by relocating north of the border can be exciting. However, there are many financial and tax implications to take into consideration before you embark on this path. Whether you are an American citizen, a Green Card holder, or otherwise a U.S. resident taxpayer, you may have built up […]
An Investment Philosophy That Places Clients First
“We’re in a business of trying to do the right thing for the client” This quote came from David Butler, Co-CEO of Dimensional Fund Advisors (DFA), on a recent interview he did with Bloomberg Radio host Barry Ritholtz. This sentiment is core to what we believe at Cardinal Point Wealth in working with clients like […]
Is the Stock Market too Concentrated?
It probably doesn’t come as a surprise that Amazon, Netflix, Microsoft, Apple, Alphabet and Facebook have been some of the best performing stocks in the first half of this year. But what may be surprising is that those six stocks made up 98% of the S&P 500 Index returns for the first half of 2018 […]
Terry Ritchie featured in The Globe and Mail, Buying a Dream Home
From The Globe and Mail article: Mr. Ritchie says he increasingly receives inquiries from well-to-do Canadian retirees who want to spend even more time at their homes in sunny Florida, California or Arizona than the rules allow… Read the article here
Income Tax Implications of RRSP Withdrawals as a Non-Resident of Canada
A large number of the clients that we work with are those that move from Canada to the United States. In these cases, we spend quite a bit of time making our clients aware of the income tax implications of leaving Canada and establishing tax residency in the U.S. We have written many publications on […]
Terry Ritchie featured in The Insurance & Investment Journal article, Managing Cross-Border Clients
From the Insurance & Investment Journal article: Managing cross-border clients is a challenging area for advisors that requires thorough knowledge on how to handle life insurance, investments, taxes and pensions while respecting two countries’ rules and regulations. The Insurance and Investment Journal spoke to U.S-Canada cross-border expert Terry Ritchie, a director at Cardinal Point Wealth […]
Estate Disputes: Keeping the Peace
Estate planning issues can create family discord, especially in cases in which there is a sizable inheritance and heirs have disparate circumstances and competing interests. “You seem to know people,” says Terry Ritchie, director of cross border wealth services with Cardinal Point Capital Management Inc. in Calgary, “but when someone dies and there’s money [involved], […]
What do I do with my U.S. revocable trust if moving to Canada?
Affluent individuals living in the United States often use a U.S. revocable living trust (RLT) for estate-planning purposes. Such a trust provides confidentiality and flexibility in how assets are managed, as it eliminates the specter of probate. A revocable living trust is transparent for U.S. income, gift and estate-tax purposes. The individual who transfers (settles) […]
Moving from Canada to the U.S.: What you need to know
The upcoming U.S. presidential election in November has led to much media focus on U.S. citizens looking to move to Canada. So much, in fact, that we prepared an article a few months back entitled, Thinking About Moving to Canada? What You Need to Know. As one moves from Canada to the United States or […]
Options for U.S. IRA account holders when living in Canada
At Cardinal Point, one of the most frequent inquiries we receive is from prospective clients asking what they should do with their U.S. retirement accounts after a move to Canada. These individuals are often caught off-guard by their U.S.-based financial advisor or institution after learning that their investment accounts must go into restricted status or […]
Thinking About Moving to Canada? What You Need to Know
Irrespective of where you stand politically, the circus currently playing out in the contest for the next President of the United States has a number of Americans—both Democrats and Republicans—looking at options that might include leaving the United States and moving to Canada. Indeed, by midnight of March 1—Super Tuesday in the United States—searches for […]
U.S. Citizens Living in Canada: Know Your Key U.S. Tax Forms and Responsibilities
Over the years, many articles have been written reminding U.S. citizens living in Canada to file a U.S. 1040 tax return annually, in addition to the FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR). While the U.S. 1040 and FBAR are key documents most U.S. expats must complete, there are other U.S. […]
Canadian Deductibility of 401(K) Contributions and U.S. Deductibility of RRSP Contributions
Are Your 401(K) Contributions Deductible in Canada? You might recognize this situation. You are a Canadian resident working in the USA on a TN visa. Your employer offers a 401(K) plan that includes a matching contribution. You know contributing to the 401(K) plan lowers your taxable income in the US. Does the same hold true […]
Cross-Border Spouses: Beware of U.S. Gift-Tax Surprises
When a U.S. citizen or U.S. resident alien is married to a Canadian spouse who is not a U.S. citizen, then property transfers between the spouses could be taxable in the United States or subject to U.S. gift-tax rules. Most Canadians are not familiar with a gift tax or an estate tax because Canada doesn’t […]
Moving to a Green Card Calls for Financial Planning
At Cardinal Point Wealth, we come across many situations where former Canadian residents have been working in the United States on an L-1 visa. This type of visa allows a U.S. employer to transfer a manager, executive or someone with “specialized knowledge” from an affiliated Canadian office to one of its U.S. offices. To secure […]
Canadians Living in California, California Tax Filing with a Canadian Spouse
Our previous article discussed the concept of California domicile and the application of California community-property rules to Canadians domiciled in the state. This article is the second installment in our series explaining about Canadians Living in California and how California community property laws can impact Canadians. At Cardinal Point, we regularly deal with cross-border couples […]
Canadians Beware of California Community Property Rules
Canadians find many things in California to be foreign, like the sun, surf and In-N-Out Burgers. But when it comes to Canadians who have family in California, or who spend considerable time in the Golden State, California’s community-property laws make Canadians realize just how foreign the state can be. As we’ve discovered over the years, […]
Canadian Tax Filers: Report Your Foreign Property Annually—Or Else
A lot has been made of the IRS’ onerous foreign-account and property-reporting requirements, and understandably so. But largely overshadowed by that discussion is a similar requirement that the CRA has inflicted on Canadian tax filers. As part of its efforts to address tax noncompliance involving foreign property, CRA, in 2013, introduced a revised Form T1135 […]
Estate Planning: Uncle Sam’s Nasty Surprise for Non-U.S. Citizen Spouses
Are you a U.S. citizen married to a non-U.S. citizen? Or, are you and your spouse both green card and/or U.S. visa holders living in the United States? If so, then you’ll want to be aware of U.S. estate-tax rules that, without proper planning, can result in an outsized tax bill. Recently, we started working […]
Americans Exiting Canada: Understanding the Five-Year Deemed Disposition Rule
American citizens living in Canada for more than five years face an imposed exit tax on unrealized gains. One of the most common questions we receive from Americans moving to Canada is how to navigate around the Canada Revenue Agency’s five-year deemed disposition rule. Canada assesses an exit tax on any unrealized capital gains inside […]
Americans in Canada: Investment Basics
It’s a good idea for Americans living in Canada to understand which kinds of registered investment accounts they can have without having to confront onerous taxes and paperwork. Two kinds of plans are friendliest for Americans: The Registered Retirement Savings Plan (RRSP) and the Registered Retirement Income Fund (RRIF). Effectively, U.S. citizens are simply taxed […]
Americans Selling Canadian Homes Face Tax Issues
Canadian citizens are not subject to capital gains tax when they sell their principal residences. Americans selling their homes in Canada, unfortunately, may have to pay the tax. As Terry Ritchie explains in this Globe and Mail video segment, Americans face the tax whether their home is in the United States or Canada. In most […]
Does it make financial sense to renounce your U.S. citizenship?
Americans living in Canada face tax-reporting obligations that can be burdensome—even to the point where one might consider renouncing their citizenship. Our advice is to take a step back and think it through. As Terry Ritchie explained recently in this Globe and Mail video segment, renouncing one’s citizenship not only involves administrative hurdles, but can […]
FATCA Tax Evasion Law: What You Need to Know
The Foreign Account Tax Compliance Act (FATCA) has now been in force for about a year now. Its goal: to prevent millions of U.S. taxpayers, and the global financial institutions that serve them, from evading U.S. tax on income and assets held outside the United States. As our Terry Ritchie explains in an article at […]
Canada & U.S. Education Savings Options
“The Simpsons” is a funny show, and that’s despite—or maybe because of—the fact that it often tackles the issues that make us most anxious. Take the episode in which Bart terrifies Homer with a campfire story about college costs for Maggie. The scene ends with Homer shrieking, “No! No! Noooo!” I suspect that Homer speaks […]
California Residents: Does Your Financial Advisor Tax-Manage Your RRSPs?
California residents who hold RRSPs, LIRAs, RRIFs or other Canadian tax-deferred accounts are subject to a unique set of tax planning and reporting requirements. Unlike most states, California does not allow Canadian retirement accounts to grow on a tax-deferred basis. And that can present a serious income-tax problem for residents of California, given the fact […]
Options for your CAD Non-registered assets when moving to and/or living in the U.S
The strong U.S. dollar has created new challenges for those moving to the United States from Canada—but understanding these challenges, and your options, can help you to navigate the financial transition as smoothly as possible. Here’s the background. The Canadian dollar is currently valued around 0.80 versus the U.S. dollar, a big departure of 0.90 […]
Estate Planning and Digital Assets
Imagine if you were to die tomorrow what your email account would provide for your loved ones: access to your contacts, personal and business communications, photos, and memories. While an email account may not be worth anything in terms of an estate, it could have a high emotional value for those closest to you. Now […]
While Advice May Benefit Investors, Active Management Can Prove Costly
In 2014, investors in Canadian-based equities watched while the majority of actively managed funds failed to meet their benchmarks, let alone outperform their passive counterparts such as index funds and exchange-traded funds (ETFs). According to Standard & Poor’s Dow Jones Indices vs. Active Funds (SPIVA) Canada Scorecard1, only 32% of actively managed mutual funds beat […]
Spreading your eggs across many baskets: Why drop in oil should be a lesson to diversify
The rate at which energy prices have fallen has caught many by surprise. Oil prices alone are down more than 50% since June 2014. While the drop in oil has lowered the gas bills for many Canadians, there are other impacts affecting households throughout the country. In Alberta for example, there have been layoffs in […]
Can A Foreign Spouse Claim U.S. Social Security?
We were recently engaged by an American citizen who wanted to know if her Canadian spouse can claim her U.S. Social Security spousal and survivor benefits. Both she and her husband reside in Ontario, Canada. U.S. Social Security benefits can be received in Canada free of U.S. tax. In this post, we will explain how, […]
Possible Tax Changes for Snowbirds
Writing about possible U.S. tax changes for Canadians, Terry Ritchie, Director of Cross-Border Wealth Services, appeared in the January 2015 issue of Advisors Edge. In the “TaxBreak” column, Terry summarized how some of the recently enacted changes at the IRS can affect snowbirds. Though the new U.S. Congress will likely focus its efforts on corporate […]
U.S. Tax on Canadian Rental Property
It is no surprise many Canadians moving to the U.S. choose to rent out, rather than sell, their properties back home. With a strong rental market and housing price valuations in cities like Toronto and Vancouver, the return on investment from keeping and renting the property is attractive. Unfortunately, becoming a non-resident of Canada and […]
Am I a U.S. tax resident?
Most Canadians who move to the U.S. have a good understanding of their immigration residency status. However, many do struggle to determine their residency status for U.S. income tax purposes. While it is common knowledge that U.S. citizens and green card holders are responsible for filing U.S. tax returns, most people who move to the […]
Terry Ritchie, U.S. Expatriation and Your Dual Citizen Clients
In this video, Terry Ritchie speaks with InvestmentExecutive.com’s Rudy Mezzetta about what U.S. citizens living abroad need to know when considering renouncing their U.S. citizenship. Though the numbers of expatriations are reaching historical highs, the process is not an easy one. After filing with the Department of Homeland Security, an individual wishing to renounce citizenship […]
Possible U.S. Tax Changes for Snowbirds
A sweeping GOP victory has led to both houses of the U.S. Congress being controlled by Republicans. American voters also chose Republican governors in a majority of states. How do these and other recent changes affect snowbirds? First, there is the so-called “snowbird visa,” which has been held up in the current Senate after passing […]
Advising same-sex couples with U.S. ties
Terry Ritchie, Director of Cross-Border Wealth Services, was recently featured in an article from Advisor.ca looks at how a recent ruling from the U.S. Supreme Court opened the door to new planning options for same-sex partners with ties to the U.S. The June decision struck down a key part of the Defense of Marriage Act […]
Cross-Border Concerns for Athletes
Canadian hockey players in the NHL who play for American teams have specific planning needs and require the specialized advice of a cross-border financial advisor. This article by Cardinal Point’s Terry Ritchie looks at what cross-border issues professional athletes may face, including immigration, estate, tax and investment planning considerations. Ritchie first examines the potential immigration […]
Travel Insurance Between Canada and the U.S.
Do You Need It? For our Canadian and U.S. clients, cross-border travel includes an array of possibilities, from a weekly commitment to the rare excursion. The question is: do you need travel insurance? In this article, we look at considerations that keep your best interests in mind. Many of Cardinal Point’s clients enjoy the best […]
The IRS Offshore Voluntary Disclosure Plan (OVDP) Expands Eligibility for Streamlined Version
The IRS has recently expanded the eligibility requirements for streamlined OVDP. If you are a U.S. taxpayer with offshore accounts, the streamlined procedures could be beneficial for you, with some penalties waived. To qualify for the streamlined procedures, you must certify that your conduct (not having reported foreign accounts) was “non-willful.” The IRS defines “non-willful” […]
Caught in the Middle? The Sandwich Generation
Are you caring for both children and parents at the same time? If so, you’re part of the “sandwich generation.” Adults in this group have at least one senior parent and are either raising a minor child or supporting a grown child1. As the first wave of baby boomers moves into retirement, the ranks of […]
U.S. IRAs Can Be a Taxing Issue for Canadian Beneficiaries
An individual retirement account (IRA) is a personal savings plan offered in the United States. Similar to the Canadian registered retirement savings plan (RRSP), the IRA offers income tax benefits to individuals who are saving money for retirement. But what are the tax implications when a Canadian citizen inherits a U.S. IRA? Let’s look at […]
What Every Canadian Snowbird Should Consider Before Buying a “Nest” in the U.S.
When it comes to real estate, it’s been said that the three most important words are: location, location, location. For southern-bound Snowbirds, owning a home in the U.S. offers the opportunity to return to a favorite place each year, a home away from home. This allows you the certainty of knowing where you will spend […]
Financial Planning for Canadians Moving to the U.S.
Did you leave your heart in San Francisco? Is the Big Apple calling your name? Perhaps you are bound for Austin, Texas, the “Silicon Valley of the South.” If the U.S. is your destination—and you plan to stay for a while—there are critical steps to take to ensure your short- and long-term financial wellbeing. Canadians […]
FATCA Goes Live
For more than two years, we’ve been covering the implementation of the Foreign Account Tax Compliance Act (FATCA) and all its implications. Well, the big day has arrived! FATCA takes effect on July 1st (on Canada Day, interestingly enough), and we’re catching you up on the good, the bad and the ugly by highlighting key […]
FATCA—Forget About Trusting Canada Again?
July 1, 2014 is supposed to be the celebration of Canada Day!. But on that day, the first phase of the dreaded U.S. legislation known as the Foreign Account Tax Compliance Act (FATCA) is to be implemented. For some Americans in Canada, this is not a cause for celebration. Many Americans in Canada believe that […]
U.S. Announced Revised Tax Amnesty Program
This article from Investment Executive discusses more lenient revisions to the IRS tax amnesty program, and Cardinal Point’s Terry Ritchie comments on the benefits for Americans living in Canada. The changes are designed to encourage expats to fulfill their tax filing obligations in the U.S. Revisions to the existing amnesty program include the elimination of […]
O Canada! A Very Brief Primer on Canadian Immigration and Citizenship
According to the most recent data from the Association for Canadian Studies in the United States, more than 11,000 Americans moved to Canada in 2008. While some Americans dream of such a move, others view it as an act of treason on the U.S. Regardless of your point of view, immigrating to Canada and pursuing […]
Americans Abroad Have Opportunity to File Previous Years U.S. Tax Returns
This article from Cardinal Point’s Terry Ritchie highlights another opportunity for Americans abroad to voluntarily pay their U.S. taxes. The IRS is introducing improvements to two offshore account compliance programs in an effort to get non-filing and non-reporting expats to file U.S. tax returns, foreign bank reports and other IRS compliance forms from previous years. […]
Covering Your Assets: Risk Management and Your Cross-Border Move
In a recent blog post, we looked at important issues to consider when making a cross-border transition to Canada or the U.S. We touched upon the need to review risk exposure to ensure your current risk management strategies remain appropriate and new strategies are implemented as needed. Risks are a part of everyday life, but […]
Same House, Different Tax Rules: Selling a House in Canada
Cross-border couples often enjoy the best of both worlds: travelling between the U.S. and Canada, experiencing two distinct cultures and exploring the natural beauty unique to each country. Indeed, Canada and the U.S. are different in many ways. For married homeowners in Canada, one important difference is how the U.S. and Canadian tax systems treat […]
9 Essential Elements of Cross-Border Transition Planning
“How do I move my financial life to another country?” It’s a question we hear from many clients as they begin making a cross-border transition. Whether you are making the move to the U.S. or Canada, you want to transition your finances smoothly and seamlessly while saving time, headaches, and every dollar you possibly can. […]
Establishing a Business Presence in the United States
Is your Canadian company considering expanding its presence to the U.S.? Whether setting up an office across the border is your first foray into international expansion or a single aspect of your globalization plan, the complexities of U.S. business regulations require careful planning and meticulous attention to detail. Establishing an international presence is an important […]
U.S. and Canadian border services to collect biographical data
This Investment Executive article offers a reminder that a new set of U.S.-Canadian border rules will soon be enforced, which could lead to tax and immigration issues for Canadian snowbirds. It suggests that Canadian financial advisors caution their snowbird clients that overstaying the limit in the U.S. could result in U.S. tax residency status and […]
Get Your Financial House in Order
Spring is in full swing. For many of us, greener surroundings and rising temperatures have already led us to get rid of the dirt and clutter that has collected over the past year. As we scrub and reorganize, it’s easy to overlook another area that could use a good dusting: our financial lives. Like spring […]
Are Cross-Border Social Security Benefits Taxable?
If you’re a U.S. citizen living in Canada, you may be wondering about the impact on your U.S. Social Security benefits. Or maybe you’re a Canadian citizen with questions about how your U.S. residency will impact your CPP/OAS benefits. What are the tax implications for these programs when you live across the border? Fortunately, there’s […]
Moving to the U.S.? Don’t Leave Your Canadian Investments Hanging
A frequent question we hear from Canadians thinking of a move to the U.S. is this: What will be the tax consequences for my Canadian investments? Let’s look at a case study to see how this plays out. Meet Diane, a Canadian client who is moving to the U.S. for a job opportunity. As we […]
With Clock Ticking On FATCA, Financial Firms Brace For Headaches
The clock is ticking down for financial institutions as the Foreign Account Tax Compliance Act (FATCA) takes effect this July. With three months to go until implementation, firms face significant logistical challenges to comply with FACTA. Compliance executives at this week’s OpRisk North America conference point to the challenge for multinational banks with legal entities […]
U.S. Estate Planning for Non-Citizen Spouses
Avoiding the estate tax when you’re married to a foreign national As cross-border specialists, one of our key concerns in working with each client is the question of citizenship. This is especially true for estate planning, as developing a plan without taking into account citizenship could have dire tax consequences and create hardship for a […]
Avoiding Cross-Border Financial Planning Pitfalls
What’s the quickest way to turn traditional financial planning upside-down? Place a border in the middle of your tax and financial life. Financial, tax and estate planning can be a difficult undertaking for most individuals and couples. Imagine the added complexities of planning between two countries; it requires proper advice to know where the minefields […]
Terry Ritchie and James Sheldon in Institutional Investor
This article from Institutional Investor features the commentary of Cardinal Point’s Terry Ritchie and James Sheldon. It highlights why the U.S. is increasingly a low-risk haven for wealthy families seeking to escape turmoil in emerging markets. The U.S. Treasury Department has income tax treaties, protocols and tax information exchange agreements in place with 40 jurisdictions, […]
How The US May Tax a Canadian Tax Free Savings Account (TFSA)
Qualified individuals in Canada can start a Tax Free Savings Account (TFSA) and earn income in a tax-free manner. The TFSA account provides tax benefits for savings where investment income earnings, including capital gains and dividends, are not taxed when withdrawn. However, unlike the Registered Retirement Savings Plans (RRSP), contributions to a TFSA are not […]
Do You Have to Pay U.S. Taxes for Canadian Registered Retirement Savings Plan Withdrawals?
Have you recently moved to the United States from Canada and left your Registered Retirement Savings Plan (RRSP) open? After becoming a U.S. resident, you might be wondering if you have to pay U.S. taxes on withdrawals from your Canadian retirement plan. There is a good chance that Canadians, who moved to the U.S., have […]
2,999 Americans Renounced U.S. Citizenship in 2013
The Treasury Department reported that 2,999 Americans renounced their U.S. citizenship in 2013, nearly double the previous record from 2011. Potential reasons for this rising trend include increased awareness of the obligation to file U.S. tax returns by citizens living outside the U.S., the rising burden of complying with U.S. tax laws, and fear of […]
Ottawa to give IRS information on Americans living in Canada
Canada and the U.S. came to an agreement this week that clears the way for Ottawa to share financial data about Americans living in Canada with the Internal Revenue Service. The deal addresses some of the privacy and hardship concerns Ottawa had with the Foreign Account Tax Compliance Act (FATCA), the controversial U.S. law targeting […]
New Rules for U.S. Taxpayers in Canada with Mutual Funds
This article by Cardinal Point’s Terry Ritchie and James Sheldon discusses important new rules for U.S. taxpayers who hold Canadian mutual funds in non-registered accounts. The IRS recently released temporary regulations regarding Passive Foreign Investment Companies (PFICs). This act impacts nearly all Canadian mutual funds and Canadian-traded ETFs held outside registered accounts. As a result […]
A checklist for U.S.-bound snowbird clients
In the second part of this two-part series on advising snowbird clients, Terry Ritchie of Cardinal Point looks at four important items that should be on a snowbird’s checklist as they prepare to head south for the winter. First, get familiar with the residency requirements for healthcare benefits in your jurisdiction; some require specific minimum […]
Clients who winter in the U.S. may soon be able to stay longer
This article from Investment Executive features Cardinal Point’s Terry Ritchie and focuses on proposed legislation in the U.S. that would increase how long Canadian “snowbirds” can spend in the U.S. Under the Jobs Originated Through Launching Travel Act, snowbirds could stay in the U.S. up to 240 days per year (the current limit is 180 […]
Should this family move to the U.S.?
This article looks at families who are faced with the prospect of a cross-border move and career changes. Featuring the commentary of Cardinal Point’s Terry Ritchie, it presents a case study to show the potential tax, retirement and estate planning implications of a cross-border move. In the scenario, a hypothetical family from Ottawa is faced […]
Got Snowbirds? Check These Tax Changes
In this article, Cardinal Point’s Terry Ritchie looks at new tax changes that took effect on October 31. The IRS released inflation adjustments for more than 40 tax provisions, including the 2014 tax rate schedules and other rates, exemptions and changes. In particular, advisors with U.S. citizens as clients, or those who help Canadian clients […]
The First Canadian in the White House?
Our very own, Terry Ritchie, recently wrote an article for the website, Advisor.CA. He touches on the latest news surrounding Ted Cruz. Cruz, a U.S. senator, has decided to renounce his dual Canadian citizenship to prevent confusion regarding his political loyalties, experts suspect, because the Republican Party has shortlisted him as a candidate for the […]
Press Release: Cardinal Point Wealth Management Inc. Acquires Seabank Capital Management Inc.
Cardinal Point Wealth Management, Inc. announced today that it has acquired Seabank Capital Management Inc. With the addition of Seabank Capital, Cardinal Point continues to establish itself as the leading provider of cross-border wealth management solutions for residents of Canada and the United States. Cardinal Point Wealth Management, Inc. is a Canadian-based, fee-based financial planning […]
How to Handle Cross-Border Divorce
Recently, Jeff Sheldon and Terry Ritchie were featured in Advisor.CA to discuss the topic of divorce. Divorce can disrupt even the most solid financial plan, especially when cross-border considerations are involved. We’ve seen many planning cases where one person moves from Canada to the U.S. or vice versa for marriage. For those clients, the tax […]
Tax Implications for Americans Living in Canada
In this video clip, Terry Ritchie updates Rob Carrick on the IRS crackdown on Americans who live and work in Canada but haven’t been filing their annual tax returns. There is serious documentation required by U.S. tax authorities regarding financial holdings. Last September, a new program was introduced for Americans living and working abroad: the […]
How U.S. Estate Tax Applies to Canadians with U.S. Stocks, ETFs
Cardinal Point’s Terry Ritchie continues his talk with Rob Carrick about U.S. estate taxes; this segment focuses on what they mean to Canadians who own U.S. stocks and ETFs. U.S. shares owned by Canadians are considered U.S. cited, and there could be U.S. estate tax filing requirements if they are valued at more than $60K […]
What Snowbirds Need to Know about U.S. Estate Tax
Cardinal Point’s Terry F. Ritchie talks to Rob Carrick about the latest changes in U.S. estate taxes and what they mean for Canadian snowbirds who own property in the U.S. For many years, snowbirds had to worry about U.S. estate taxes, but it’s not an issue for most anymore, as the threshold is much higher […]
How US PFIC Rules Can Impact Your Clients
Cardinal Point’s Terry Ritchie discusses the impact of U.S. PFIC (Passive Foreign Investment Company) tax rules on U.S. citizens living in Canada who hold Canadian mutual funds or ETFs. The challenge is that under U.S. tax law, the earnings and dividends from these PFICs are not taxed the same way in the U.S. as they […]
Estate Planning for Snowbirds
In this segment for Investment Executive, Terry Ritchie talks about U.S. estate planning issues for Canadians with property in the U.S. Recent estate property tax changes in the U.S. have relieved the burden for many Canadians of what happens upon their death when they own U.S. property. If a Canadian owns property with a worldwide […]
Should Snowbirds Live in the U.S.?
Cardinal Point’s Terry Ritchie looks at new measures to promote longer stays by Canadians in the U.S. The first proposal would let Canadians stay in the U.S. for up to 240 days per year, as long as they are 55 years or older, maintain a Canadian residence, and own/rent property in the U.S. Another provision […]
Terry Ritchie joins the firm as Director, Cross-Border Wealth Services
Cardinal Point Wealth Management Inc. (“Cardinal Point”) is pleased to announce that Terry Ritchie has joined the firm as Director, Cross-Border Wealth Services. With a wealth management career spanning 25 years, Ritchie brings substantial experience in the areas of financial, investment, tax and estate planning. Ritchie specializes in assisting affluent individuals and families with their […]
Americans in Canada Facing Obamacare Surtax
In this video segment, Terry Ritchie, cross-border tax and estate planning expert, discusses how a new measure in the Patient Protection and Affordable Care Act, also known as “Obamacare,” could result in a surprise for U.S. citizens living in Canada. Effective for 2013, a 3.8% surtax will be imposed on passive income such as interest, […]
CRA Beefs Up Foreign Property Disclosure Requirements
The Canada Revenue Agency (CRA) recently announced in the 2013 budget that it’s tightening foreign reporting requirements. Starting in 2013 and in subsequent tax years, Canadian residents will be required to file Form T1135 with the CRA if they own foreign property. The move appears to align with foreign property requirements in the U.S. Although […]
Cardinal Point Wealth Management featured in the Wall Street Journal, “A Cross-Border Retirement Without Tax Woes”
Our own Jeff Sheldon was recently featured in a Wall Street Journal article, “A Cross-Border Retirement Without Tax Woes.” He shared the story of a couple who retired to the U.S. from Canada. While they sought sunny weather and a simpler life, when it came time to sort out their taxes and streamline their retirement […]
Cardinal Point Wealth Management Creates Partnership with Canadian California Business Council
Cross-border opportunities between the U.S. and Canada have been given a boost by the Canada California Business Council and Cardinal Point Wealth Management, who today announced a strategic partnership.
Why Should Every Investor Request an Investment Policy Statement?
John McCord discusses the importance of defining financial goals and responsibilities in his piece discussing Investment Policy Statements (IPS). While not a financial plan, an IPS is a critical component of a holistic financial plan that takes into consideration insurance, estate, and retirement planning. Critical in any client-financial advisor relationship is a mutual understanding that […]
Why Is It Important For Canadian Expats To Disclose Foreign Based Accounts to the IRS?
John McCord’s article focuses on the IRS (US Internal Revenue Service) policy that taxes the worldwide income of US residents. Many US residents are unaware of this policy and the law that requires the disclosure of the majority of foreign accounts, as they are subject to US taxation. Disclosure rules also apply to Registered Retirement […]
How Does Canada’s Public Pension Program Compensate Expats Living in the US?
In this article, John McCord discusses Canada’s two-part public pension program and how pension benefits are applied to Canadian expats living in the US. Eligibility for the first part, Old Age Security (OAS), is determined by age, time spent as a Canadian resident and legal status, but not retirement status or employment history. The second […]
What Should Canadians Consider Before Purchasing US Real Estate?
This article outlines financial planning concerns for Canadian buyers who want to take advantage of real estate opportunities in the United States for either financial or lifestyle choices. Author John McCord highlights complex issues such as estate, insurance, financing, residency, immigration and taxation that are important considerations in the purchase of property in the U.S. […]
Why Is It Important To Create A Cash Flow and Net Worth Statement?
This article focuses on the cash flow and net worth statement as essential to the financial planning process, serving to both quantify and qualify one’s financial affairs. When updated annually, these documents can help set goals and be useful in tax planning and risk management. The cash flow statement shows inflows and outflows of cash […]
Is Your Financial Life In Order?
John McCord’s article highlights the start of 2012 as the perfect time to reassess the state of your financial plan, including your investment, taxation, insurance, retirement and estate needs. When cross-border complexities are present, the need for a coordinated review is even more pronounced. The process starts with a qualified advisor and a planning analysis […]
Cross-Border Planning Full of Conflict
This article from Advisor.ca discusses the complexities of financial planning for Americans and Canadians whose lives, assets and interests cross two borders. Cardinal Point’s James Sheldon points out that those in a dual-citizenship marriage or with cross-border assets need financial advice, investment planning, and wealth and estate planning that meet securities regulations in both the […]
Why Work With an Investment Advisor in Lieu of a Broker-Dealer?
Cardinal Point’s John McCord looks at some of the key differences between a broker-dealer and a registered investment advisor (RIA). First, an RIA is held to the “fiduciary standard,” which legally requires the advisor to act in the best interest of clients and place client interests before his/her own, among other responsibilities. The broker-dealer model […]
Cross-Border Financial Advisors Are in Demand
This article emphasizes the need to review financial planning and investment matters with a team well-versed in cross-border issues prior to any move, as a lack of proper planning can often result in higher taxation, poor estate planning and enhanced risk. It can be hard to identify an advisor who is qualified to offer financial […]
Part 4: Preparing to Exit the United States for Canada?
In part four of the series, John McCord examines how to adjust one’s risk management strategy when moving from the U.S. to Canada. Important considerations in this financial planning scenario include insurance and healthcare. The article discusses the mechanics, availability and restrictions of the Canadian healthcare system. It also looks at important questions to ask […]
Part 3: Preparing to Exit the United States for Canada?
In the third series installment, Cardinal Point’s John McCord looks at how the differing tax systems of the U.S. and Canada can lead to the risk of “double taxation” for expatriates when both countries tax the same income for the same tax year. The Canada U.S. tax treaty helps mitigate this risk as does the […]
Part 2: Preparing to Exit the United States for Canada?
In Part 2 of his series for the Canadian Expat Network, John McCord discusses deferred compensation arrangements and currency conversion. The article looks at how to mitigate higher tax rates and the risks of double taxation for U.S.-based deferred compensation plans that are payable to individuals who are moving to or returning to Canada. McCord […]
Preparing to Exit the United States for Canada?
This article by Cardinal Point’s John McCord for the Canadian Expat Network discusses some of the common misconceptions about a move from the United States to Canada. Readers are advised to start planning with their advisor as far in advance as possible, particularly in the areas of retirement planning, deferred compensation arrangements, currency conversion, the […]
Preparing to Exit Canada for the United States? (Part IV)
In the fourth installment of the series, John McCord looks at the importance of consulting an attorney with cross-border expertise to analyze your estate plan before a move. Estate planning is a sophisticated, rapidly changing subject, and the laws governing it are not uniform between Canada and the U.S. A collaborative approach between cross-border financial […]
Preparing to Exit Canada for the United States? (Part III)
The third and final installment of the series addresses what to do with your Registered Retirement Savings Plan (RRSP). This article discusses some of the fundamental decisions that must be made concerning any tax-deferred accounts that are being left in Canada. It also looks at some of the common strategies suggested by cross-border financial planning advisors.
Preparing to Exit Canada for the United States? (Part II)
Part 2 of the series focuses on the process of emigrating to the United States. The article includes a list of actionable items that support residency and should be undertaken prior to relocating. It also discusses tax treatment for a Canadian Pension Plan (CPP) and Old Age Security Pension (OAS) income following a move to […]
Preparing to Exit Canada for the United States? (Part I)
This is the first in a three-part series for the Canadian Expat Network (CEN) examining important aspects of cross-border financial planning. In the first installment, Cardinal Point’s John McCord looks at the Canadian Departure Tax, a levy assessed by the Canadian Revenue Agency (CRA) when an individual or family becomes a non-resident of Canada. It […]
Canadian Expat Network Profile of Jeff Sheldon
This profile of Cardinal Point’s Jeff Sheldon on the Canadian Expat Network (CEN) talks about his transition to the U.S. and his role in starting a multi-office, cross-border financial planning firm. He also discusses how the firm is uniquely positioned to understand the Canadian mindset and cater to those specific financial planning and investment management […]
Advisor Spotlight: Following the Snowbirds, Canadian Firm Expands South
This profile in RIABiz.com discusses how Cardinal Point is carving its niche as a cross-border wealth management business. President Jeff Sheldon recalls that the Canadian practice, which got its start in Toronto, continually lost clients who moved to the United States for work or retirement. The firm determined that there was enough opportunity to open […]
Canadian Snowbirds Present Opportunities—and Pitfalls—for Advisers
As more Canadians are following the warmer climate and real estate bargains of the Sun Belt, buyers should beware of the numerous cross-border financial planning issues involved. ThisInvestmentNews article discusses how U.S.-based advisory firms that cater to these Canadians can have particular value in dealing with the nuances of taxes, trusts and estate planning, and […]
Advisors Without Borders
This Investment Executive profile looks at Cardinal Point CEO and Managing Director James Sheldon and his efforts to serve clients with interests in both Canada and the United States. Sheldon’s team has spent the last three years building a wealth management firm that provides full financial planning services on both sides of the border. The […]
Cardinal Point Establishes Cross-Border Wealth Management Firm
This article in Financial Planning talks about how Cardinal Point is addressing the growing need for independent, cross-border wealth management services for Canadians living in the U.S. and vice versa. According to Cardinal Point’s President Jeff Sheldon, this niche emerged around several trends, including currency fluctuations and increased purchases of U.S. real estate by Canadians. […]