U.S. Tax Obligations for Americans Moving to Canada: What You Need to Know
Written by: Carson Hamill, CIM®, CRPC™, FCSI® & Dean Moro, BComm, CIM®, CRPC™: Cross-Border Portfolio Managers at Snowbirds Wealth Management
- ⚠️ Why dual tax filing is not a footnote but a defining financial risk
- 🧾 Dual Filing Is Structural, Not Temporary
- ⚙️ Where Theory Meets Reality
- ⏳ Elections, Timing, and One-Way Doors
- 📂 Compliance Is Only Half the Issue
- 🎯 The Real Takeaway
⚠️ Why dual tax filing is not a footnote but a defining financial risk
When Americans move to Canada, tax planning is rarely the first concern. Housing, healthcare, schools, and lifestyle dominate the conversation. Yet, as discussed in a recent episode of the Snowbirds US Expats Radio podcast featuring host Gerry Scott and guest Robin Veenendaal, the most persistent complication of a cross-border move is often the one people assume will fade with time: U.S. tax obligations.
They do not.
🧾 Dual Filing Is Structural, Not Temporary
For U.S. citizens living in Canada, dual tax filing is not a transitional inconvenience, it is a permanent reality. Canada taxes based on residency. The United States taxes based on citizenship. That overlap does not resolve itself once residency is established; it becomes embedded in every financial decision going forward.
Robin Veenendaal, a cross-border CPA featured on the Snowbirds US Expats Radio podcast, notes that many Americans arrive in Canada expecting their U.S. tax exposure to diminish over time. In practice, the opposite often occurs. As Canadian bank accounts, pensions, investment portfolios, and registered plans are added, the reporting burden grows more complex, not less.
⚙️ Where Theory Meets Reality
Consider a common scenario discussed on the podcast: an American professional relocates to Canada but maintains a U.S. taxable brokerage account. From a U.S. perspective, the account remains routine. From a Canadian perspective, however, every transaction must be recalculated using Canadian cost-basis rules, converted into Canadian dollars, and reported annually.
What was once a straightforward investment account quietly becomes a compliance exercise.
Retirement accounts introduce even greater risk. Robin explains that Americans frequently liquidate U.S. retirement plans before or shortly after moving, assuming this simplifies their financial lives. Without careful coordination, those withdrawals can be fully taxable in both countries—turning a well-intentioned decision into an irreversible tax event.
By contrast, when retirement accounts are held and managed with proper cross-border oversight, Americans living in Canada can often retain their U.S. retirement plans, invest them appropriately, and plan for Required Minimum Distributions (RMDs) in a way that aligns with both tax systems.
⏳ Elections, Timing, and One-Way Doors
Some U.S. accounts notably Roth IRAs can retain favourable tax treatment in Canada. But this outcome is not automatic. It depends on making specific elections, correctly and on time.
Miss those steps, and the tax treatment can change permanently.
As emphasized on the podcast, many of the most expensive mistakes occur early when individuals are focused on the logistics of moving rather than the long-term consequences of their financial decisions. We explore this issue in more detail in our article, Moving to Canada with a Roth IRA: What You Need to Know.
📂 Compliance Is Only Half the Issue
Dual filing extends well beyond income tax returns. Americans in Canada face overlapping disclosure regimes, foreign account reporting requirements, and conflicting definitions across borders.
Most problems do not arise from aggressive tax planning, but from fragmented advice where accountants, investment advisors, and legal professionals operate in isolation, each assuming someone else is managing the cross-border details.
🎯 The Real Takeaway
The central message of the podcast is straightforward: dual filing is not something to “deal with later.”
It must be incorporated into financial planning before residency changes, assets are moved, or accounts are restructured. For Americans moving to Canada, dual filing is neither optional nor temporary. It is a permanent feature of cross-border life and the difference between managing it intentionally and discovering it accidentally is often measured in years of complexity and avoidable cost.
🚀 Planning a Cross-Border Move?
If you are considering a move between Canada and the United States, financial planning should not be an afterthought.
Raymond James Snowbirds Wealth Management specializes in cross-border financial planning, investments, and wealth management. Our team works closely with tax accountants and legal advisors to ensure strategies are integrated across borders before decisions become irreversible.
🌎About Snowbirds Wealth Management
Snowbirds Wealth Management focuses exclusively on the cross-border market.
Gerry Scott, along with Dean Moro and Carson Hamill, provides investment solutions for:
- Americans living in Canada
- Canadians living in the U.S.
Licensed in both countries, our team helps minimize tax burdens when moving assets across the border.
👉 Schedule Your Introductory Cross-Border Strategy 📞Call Here
Disclaimer: Statistics and factual data and other information are from sources RJLU believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJLU is to be under no liability whatsoever in respect thereof. Raymond James (USA) Ltd. advisors may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Investors outside the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Raymond James (USA) Ltd. is a member of FINRA/SIPC.
