Before you sell your Maple Leafs season tickets and book a one-way ticket to Orlando, take a few minutes to clarify what you want to achieve. We have always found that the best way to accomplish your goals is to start by defining them.

One way to do this is to try playing the role of a journalist. Let’s say your editor tells you to report on your potential move to the U.S. Journalism 101 says, the best way to ensure you get a complete story is by asking the “Five W’s.” What are the five W’s? What, Why, Who, Where, and When. So go ahead – channel your inner Walter Cronkite and go get the story.

What do you want to do?

This sounds like an obvious question but it is important not to overlook it. Your answer is probably, “I want to live in the U.S.” Make sure you do your due diligence on this one by determining how long you want to spend in the U.S. per year. If your answer is you want to spend five to six months per year in the U.S. and are not interested in working, we would say, “great, as a Canadian you already have the right to spend up to six months per year in the U.S. You can even own a home there. Make sure you visit Altro Levy LLP’s website to see how to title your U.S. property as a Canadian.” If your answer is “six months is not enough,” well then we would say keep reading.

Why do you want to go?

From time to time, a Canadian will decide he/she wants to move to the U.S. This can happen for a multitude of reasons. Whatever the reason they want to move, we always make them promise that even if they move somewhere where there is only sun and no ice, they will never stop being hockey fans. After all, it is who we are as Canadians.

Below are some of the more common reasons clients tell us they want to move to the U.S.:

  • “I am sick and tired of paying almost 50% tax to the government.”
  • “I can’t stand the weather in Canada.”
  • “I married an American and I want to move there be with him/her.”
  • “I have a great job opportunity in L.A., New York, Florida etc.”
  • “We are U.S. citizens living in Canada and we want to return home.”
  • “I hate counting the days I can spend in the U.S. I want to have the freedom to be in the U.S. more than six months a year.”
  • “I would like to golf year-round.”
  • “I would like to expand my business to the U.S. and move down there to run it.”
  • “My son moved down there a few years ago. He and his wife just had their second kid and we want to be close to our grandchildren.”
  • “Arizona will be a better climate for my health issues.”

Who is coming with you?

Are you going alone? Do you have a spouse that is coming along with you? What about children? Your plan will vary greatly depending on who is involved, what assets they own and what they plan on doing once they are Stateside. A red flag needs to be waved if you are in a common law relationship or same sex marriage due to the changing legislation in the U.S. relating to the Defense of Marriage Act (DOMA).

Where do you want to live?

Most Canadians are looking to move to the Sunbelt (Florida, Texas, Arizona and California), while many others have family ties or employment opportunities in the northern states like New York, Vermont, Michigan or Washington State. From time to time, clients are open to a variety of options. As cross border tax and financial advisors, we are always concerned about saving taxes for our clients so we would be amiss if we did not point out that all states are not created equal when it comes to tax.

Much like Canada where there is federal and provincial tax, the tax residents of the U.S. pay federal and state tax (in most states). Where the two countries differ is in the tax rates. Not only are the federal and state tax rates considerably lower in the U.S., the rates in which they increase are also much less. This can lead to considerable income tax savings for Canadians who successfully move to the U.S. As you can see in the table below, a resident of Quebec who earns annual income of $140,000 has a marginal tax rate of 50%. Compare this to a resident of Florida who has a marginal tax rate of only 28%, earning the same $140,000 of income.

When do you expect to move?

When planning a cross border move, timing is critical. One common mistake is underestimating the amount of time required to work through all the issues related to a move of this nature. Typically it takes anywhere from nine months to two years to create and implement an effective plan for you and your family to become U.S. residents.