Moving to the US from Canada.

US Citizen (Nevada Resident) moving to Canada - Tax Strategy / Ideas?

• I have a completely virtual, web-based business located in Nevada, where I currently reside. I would like to move to Canada, but I'm unsure of how to best organize my taxes. I do not own property in Nevada. - I heard about some type of exemption for the first 5 years of residency in Canada, is this still valid? - Is there some way of keeping my US Citizenship so I can keep my business in Nevada, but still reside in Canada? - I know if I remain out of the US for all but a few months per year, I will be tax free on the first $82,400 or there about. How can this potentially affect me? Thanks in advance for any thoughts or advice.

• Answer:

  Your question contains some complexities that may be best answered by someone with Canadian AND American tax knowledge, plus with some immigration knowledge. As for Canada's tax rules, Canadian residents are taxed on their worldwide income, and non-residents are taxed on their Canadian Income. I don't know anything about the $82,400 rule, since it is an American rule, but would think that if you are a "non resident" in the United States because you've told them you are a "resident" of Canada, then you'll probably be paying tax in Canada. Canada and the United States have a treaty that attempts to ensure that you are given credit for the taxes you paid in the other counrty, or in other words, are not taxed twice on the same income. It would be highly unlikely, in my opinion, for either country to allow you to live in a status of limbo, where you aren't paying tax in either country; in some cases, taxpayers have ended up being deemed residents of both countries, by courts in Canada and the United States. As for the dual citizenship thing, I was under the impression that the US doesn't allow dual citizenship, but Canada does.