Finances 201 for dual citizen in Canada

December 29, 2018 12:59 PM

I have some financial basics down (6 month emergency fund and such) and I've reached a point where I actually have enough money that I should be doing something with it besides keeping it in my bank account. The complication is that I'm a US-Canadian dual citizen, currently living in Canada (and planning on staying there). Please help me figure out what my options are and find an cross-border expert to advise me.

I'm currently a full-time student but I make enough money from summer work that I definitely should be doing something with it. I'm willing to pay a few hundred dollars to meet with someone once, but not on a regular basis.

I really, really just want to set something up where I put 10k in now and put more into it on a regular basis and never think about it otherwise until I want to buy property/have kids/retire. My limited research has suggested this is much more difficult because there's a lot of filing with the US I'll have to do and it's not clear what the US thinks about TFSAs. I don't make enough money to pay US income taxes, but I file every year and I think anything I would make from investments is taxed? Makes life more complicated?

I met with my mom's financial advisor in the US and she was helpful, but she can't actually advise me because I am residing in Canada. She did set up an IRA for me with nothing in it, which is allowed as long as I choose where the money is invested, but recommended I talk to a US-Canada specialist before doing anything.

I also had a meeting with someone at the Canadian bank where I have my checking/savings account and she did not seem to know anything about cross-border issues (anything about filing for my US taxes, issues with TFSAs, etc).

So, in conclusion:
1) What do other US-Canadian citizens do? Am I overcomplicating this?
2) Any recommendations for a company or person in the Vancouver area that knows a lot about dual citizen finances?

Thanks!

posted by raeka to Work & Money (4 answers total)

Quick answers for you!

1) This is complicated, and you're absolutely right to be seeking out good advice about your particular situation.

2) I'd suggest paying the fee to have a consultation with this company. I did, and it was the single most useful thing I did when I was struggling to figure out my own cross-border deal.

Good luck!
posted by Hellgirl at 2:01 PM on December 29, 2018

Before doing anything with 10K outside of the US, save yourself from draconian penalties and consult with a US CPA who specializes in ex-pat taxes. If you want a name, ask and I'll memail you.
posted by lois1950 at 2:16 PM on December 29, 2018

You are not overcomplicating this. No one at your bank will know what you need to do, I would be extremely mistrusting if they said they did, unless your bank is extremely unusual. You are right to seek out a specialist. It will probably be expensive if you are someone who is not used to paying for financial professionals (speaking from experience there although my cross border situation was different). The best solution for you is going to depend on 1) which country you have income in, and 2) where you plan on retiring. I will say that my research suggested that there are ways for you to save money for retirement (RRSPs) that are recognized by both countries, so you do have options.
posted by quaking fajita at 3:33 PM on December 29, 2018 [1 favorite]

I am not a tax expert, but I am a dual US-Canadian citizen living in Canada. The advice I've gotten (and am following):
1) RRSP is good.
2) Don't touch the TFSA with a 10-foot pole.
posted by heatherlogan at 4:00 PM on December 29, 2018