Income Tax Considerations for US Citizens in Canada

 Moving costs: If you had to move and set up a new home for work or to run a business in a different area, you can subtract certain moving costs from the income you made at your new job or business. A number of conditions must be met: For instance, you must be moving within Canada and more than 40 kilometers away from where you used to live. If you are moving to a different country, there are different rules that apply.Many Canadians help sick or disabled family members or children by giving them money through the Canada caregiver credit. Supportive actions can include a wide range of things, from giving food and a place to stay to driving to medical appointments. You might be able to get the caregiver credit if you help a close family member or dependent person with a disability with the things they need to live, even if the person doesn't live in Canada. In order to back up your claim, you need certain paperwork from a doctor. Check out the CRA website1 to see if you might be eligible.

For first-time buyers, you can get $10,000 if you or your husband or common-law partner bought a qualifying home, whether it's already built or still being built.

It's important to note that you can't have stayed in another home owned by you, your spouse, or your common-law partner in the four years before or during the year you bought the new home.Medical costs: The medical expense tax credit covers a lot of different medical costs. However, you can only claim a cost that you have not been paid for or will not be reimbursed for. Chen says to keep the receipts and send them in, even if the things are small. They add up. It's possible that you will also need to include proof of your claim.

Donate from the heart (and keep the ticket).Chen says that one way the government encourages people to be kind is through charities. "Giving to a registered charity will not only be good for you, but the government will also give you a tax credit for it," he says. If you are in the highest tax bracket, you may be able to get a credit of up to 33% of your gift at the federal level. You may also be able to get more tax credits at the provincial level. It's possible to deduct up to 75% of your net income, and gifts can be used for up to five years.

Chen says that the best time to use tax tactics is when we file our taxes in the spring

At that point, we can put money into an RRSP or a joint RRSP and look for tax credits and benefits."It also gives you a chance to think about how much money you have given to charity." You can now start making plans for next year if you haven't already.Check out the relief for your main home.This is a big part of planning your money for when you sell your house. When you sell something, like an investment that isn't in a registered fund, you usually make a capital gain that you have to pay taxes on. There is, however, an exception if you are selling your main home. Take note of these rules: People who own the home must usually live in it and not rent it out in order to get the exemption. If the homeowner has a holiday home, they may need to do some planning to make sure they get the most money: If the vacation home has been owned for a long time and has grown in worth more than the home, it might be a good idea to treat it as your main home in some situations.

Real estate that has been owned for decades can bring in huge amounts of money

If you are selling your home to pay for retirement or medical bills, the main residence exemption is a great way to save money and handle your taxes, says Chen.But he says that everyone's case is different and that the best way to use the principal residence exemption is to talk to a tax professional.When you put money into an RRSP, your taxed income goes down. You can usually put in up to 18% of your earned pay from the previous year, but not more than $31,560 per year in 2024. The savings in the plan can grow tax-free until you take the money out. These funds are meant to give you money in retirement, so the important thing is to take them out when you leave, when your income and, by extension, your tax rate, may be lower.For 2024, the most you can put into a TFSA each year is $7,000. Donations are made with money that has already been taxed, and there is no tax on withdrawals. This means that investments can grow tax-free. TFSAs are also more flexible than RRSPs because savers can access their money (based on the type of investment) and put it back in the following tax year.