Health Savings Accounts: A Powerful U.S. Tax Savings Opportunity

Canadians moving to the U.S. often ask about tax saving opportunities which await them as future U.S. residents. One such opportunity available to U.S. residents that we love explaining due to the powerful tax benefits it provides is the Health Savings Account or “HSA.” This should not be confused with the Canadian Health Spending Account which typically refers to a cafeteria health spending plan offered by Canadian group plans. The U.S. HSA is an individual savings vehicle that offers triple tax savings to eligible accountholders as I explain below.
HSAs can be opened at a variety of U.S. banks and other financial institutions. Being allowed to contribute to one requires being: 1) a U.S. resident; and 2) enrolled in an accompanying High Deductible Health Plan (HDHP).

Renting out Your Property as a Non-Resident of Canada

Predicting the housing market is already challenging due to interest rate fluctuations and other factors. Throw non-residency into the mix, and for someone departing Canada, it becomes a complicated decision whether to maintain one’s principal residence or to rent it out as a non-resident owner.
If you decide to maintain your property when you leave Canada, and then rent it out as a non-resident, you may be interested to learn about the tax compliance involved for non-resident owners, and what tax planning options are available.

Proposed AMT Rules and Effect on Departing Canadians

The 2023 federal budget announced significant changes to the Alternative Minimum Tax (AMT) regime to better target the AMT to high income individuals. On August 4, 2023, the Department of Finance released draft legislative proposals to modify the AMT regime, effective as of the 2024 tax year.
These AMT changes will have a significant impact on Canadians who are planning on exiting Canada for tax purposes after Dec 31, 2023.

Net Investment Income Tax and the Impact on U.S. Citizens in Canada

The Net Investment Income Tax (NIIT) is a surtax that the IRS applies in addition to regular income taxes. It applies to U.S. taxpayers with higher incomes who have certain types of passive income. First implemented on January 1, 2013, the Net Investment Income Tax (NIIT) was introduced as part of the Patient Protection and Affordable Care Act (often referred to as Obamacare) to help pay for the expansion of Medicare and U.S. health care reforms.

Obamacare Subsidies Expanded for Canadians Moving to the US

Canadians moving to the U.S. who don’t have access to an employer-provided group healthcare plan or who aren’t immediately eligible for U.S. Medicare typically purchase individual private U.S. healthcare plans via the federally regulated health insurance marketplace under the Affordable Care Act (“ACA”), often referred to as Obamacare.

Middle-income Canadians moving to the U.S. who will be enrolling or who are already enrolled in these ACA plans can rejoice thanks to President Biden’s recently passed Inflation Reduction Act (IRA) of 2022. The IRA, which was signed into law on August 16, 2022, expands the generous upfront subsidies that are available to those who enroll in ACA plans.

How to Minimize the Impact of Inflation on Your Investment Portfolio.

During the first half of 2022, consumers began seeing significant increase in prices they pay for groceries, gas and at restaurants. This persistent increase in price you pay at the counter is called inflation, and if your salary does not get adjusted upward, it will continue to erode your purchasing power. At the time of this writing, the inflation in Canada and U.S., as measured by the Consumer Price Index, stood at 7.6% and 8.5% respectively on an annualized basis. The highest it has been over the past 30 years.

While in many cases it is easy to see the impact that inflation has on your checking account, it is not always easy to see the direct impact inflation makes on your investment portfolio and what, if anything, can be done to protect it.

FBAR and FATCA: What Do I Need to Know?

FBAR and FATCA just might be the two most detested, feared and misunderstood acronyms in the expat tax lexicon. Shrouded in mystery and backed by severe penalties, the FBAR and FATCA are at least partially responsible for the record breaking number of Americans that have been renouncing their citizenship since FATCA was enacted in 2010.

If you have a financial interest in or signatory authority over an offshore financial account (e.g. a foreign bank account or brokerage account) understanding FBAR and FATCA requirements is key to avoiding a problem with the IRS or the Financial Crimes Enforcement Network. In this blog, we differentiate between the FBAR and FATCA and explain what you need to know to be compliant.

How to Hold Cryptocurrency in a Cross Border Portfolio

With news of inflation and pending interest rate hikes on every front page, many are carefully watching to see if cryptocurrency will prove to be the hedge against inflation many hoped it would be. While that remains to be seen, some of the world’s largest asset managers continue to express increasing interest as cryptocurrency becomes more mainstream. This could be a sign that cryptocurrency is still on track to transform the way we think about money and how we invest. What is sure is that for those who hold a cross border portfolio, there are special considerations to take into account before taking the plunge. In this blog post, we explore what cryptocurrency is, how to purchase it for a cross border portfolio and potential problems to avoid.

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