# Preparing for a move to the US



## Sherlock (Apr 18, 2010)

There is a small but real possibility that I might move to California in about 6 months - 1 year. I've been interviewing with a company in San Jose, and even if I don't get hired, the recruiter I'm working with says he knows of many openings in many different companies in the area (mostly with large well known companies in the Bay area) and he's sure he can find me something eventually if I want. What are some things that can be done to prepare for living there? One thing I heard is to obtain a Canadian Amex credit card, because that way I can use my credit history with that card to obtain an American Amex card after I get a US SSN. Otherwise it would be much more difficult to get a US credit card due to a lack of American credit history. Anyone have any other tips? Also would I keep my TFSA and RRSP in Canada, or empty them out and put the money into an American bank?


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## james4beach (Nov 15, 2012)

You can always get a US$ credit card at your Canadian bank, so I don't think it's worth worrying too much about that.

One thing I'd be cautious of is how much income you're going to get in the USA. Make sure it's high.

California is a very high tax jurisdiction, some of the highest taxes in the US. You may end up paying more tax working in California than if you worked in Ontario, and some other provinces. Also beware of housing costs. Also factor in that you may have to consult with an accountant and pay some hefty annual professional fees. Also the MEDICAL costs could be big in the US. Even with company-provided health insurance, you could still pay thousands $ out of pocket (the deductible) a year in health costs. Also factor in the hassle of some ridiculous IRS reporting requirements (look up FATCA and FBAR) which even the lawyers say is extremely tricky, with huge penalties if you get it wrong.

In short, before you accept a job in the US calculate these things carefully to figure out if you're really going to be better off.

I've just done a move like this to the states. I'm in a state that has similarly high taxes to California, and I'm actually taxed more here than I would have been in Canada. Where I am, cost of housing is about 8% higher and cost of food 10% higher than where I lived in Canada.

My nominal income (the gross income on paper) looks higher here than in Canada. But factor in the higher American taxes, higher cost of living of this region, extra hassles of accountants and IRS reporting, and potential huge medical cost deductibles, and I'm not so sure I'm any better off working in the USA.


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## james4beach (Nov 15, 2012)

If you rent, one suggestion is to start collecting letters of reference from past landlords.

I came down to the US with a folder of landlord letters. It made it very easy to get an apartment, in lieu of having verifiable credit history.


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## marina628 (Dec 14, 2010)

RBC and TD seem to be seamless between US/Canada now so anything you have with them in Canada they will set you up in USA .They have access to your Canadian credit and banking history ,we just go a mortgage at RBC and TD on some rentals we bought last year in Georgia.


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## BC Eddie (Feb 2, 2014)

I commuted every two weeks to the US for three years and then my wife and I moved there for six. We both worked. I have worked in New York, Florida, Illinois, Iowa, California and Oregon. By living there I estimate my wife and I saved over $200K in taxes (I know US/Canada relative tax rates have changed so this may not still be true) plus made a big chunk of our retirement nest-egg. 

It was a great way to make a lot of money. The only regret is that our lives were sort of on hold as we knew we never wanted to permanently live there so we never put down roots. The people we worked with were great and made us very welcome but except for a few they never became real friends so it was a bit lonely. Plus I had real issues with the politics at the time (Bush era) so was really happy to come back home.

Having the Canadian Amex card did help a lot to quickly get a US Amex credit card. Otherwise our local US bank first said no even though we had a bundle of money on deposit there. But having Canadian bank accounts (e.g., for Canadian bank US$ card) could be an issue if you want to give up Canadian residency. Plus it could complicate how you pay off the card each month.

I took my car down and sold it there (even though I found out later that I should have filled out a whole lot of paperwork). I eventually bought a US car and imported it back to Canada and made money of the deal when I eventually sold in Canada.

We had no issues at all renting but that probably depends on what the rental market is like in your area. Bigger issues if you want to buy there and need to get a mortgage - I think this is very difficult.

We wanted to give up Canadian residency for tax purposes so we had to sell all our registered investments and then buy back right away to set their value but we still kept everything in our RRSPs.

We held on to our Toronto house and rented it out with a lease (Difficult to prove you have given up residency if you can easily move back in). 

There are a number of web sites you can find to give you advise on what you need to do if you want to give up residency. Here is one from the accountant I used (http://www.serbinski.com/taxation-in-usa/overview.shtml)

Medical costs were not an issue and I suspect if you are an employee of a big enough US company you will not have large extra costs - we didn't. (This is not to say Medical is cheap in US if you are trying to buy a policy on your own.)

Good luck on your new adventure!


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## OhGreatGuru (May 24, 2009)

Sherlock said:


> ....Also would I keep my TFSA and RRSP in Canada, or empty them out and put the money into an American bank?


You can keep your RRSP, you just can't add any more to it while a non-resident. The US recognizes it as a tax-sheltered account through tax treaties with Canada. TFSA is not recognized as a tax-sheltered account in the US, so you should probably cash it out. Keep a record of the amount of withdrawal, as you can re-contribute that amount if you return to Canada.

PS. Of course, if you are really happy with your current TFSA, and don't mind paying US taxes on it, you could keep it. But there are other threads you should look for on this subject. There may be an issue with tracking your adjusted cost base, and there may a deemed disposition of the capital when you return, since the US would consider it to be a taxable account.


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## Jacq (Feb 8, 2014)

We moved to TX for 2 years in 2001-2003. What was great - saving and converting that saving to CAD when we came back home. What sucked - getting taxed in Canada in '03 on USD earnings X 1.55 or so. 

We went in on a TN visa. Make sure that you keep a copy of this. I had to surrender it at the border when I came home, but then had the IRS hounding me for a copy of it. Hello? Don't you people issue these things - why do you need a copy of it from me? (which I don't have because - hello, you made me surrender it.)


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## Sherlock (Apr 18, 2010)

Thanks for all the info guys.


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## james4beach (Nov 15, 2012)

Those questions of what to do with your RRSP and TFSA completely depend on where you choose to be a resident for tax purposes. It's not as straightforward as laid out above.

For instance, I am now temporarily living in the US (for a few years probably) but am still a Canadian resident, and my TFSA and RRSP continue to exist normally. I can add to both my RRSP and TFSA and virtually nothing changes. I do have to file tax returns in both countries though.


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## smihaila (Apr 6, 2009)

US credit cards: the easiest which I was personally able to get was a VISA card from DCU - Digital Federal Credit Union (www.dcu.org). They were flexible and weren't so worried that I was lacking credit history in US. They just needed a copy of my employment letter, and ID, and a proof of US address. Very nice guys - them seem to cater lot to Indian natives/reservations hence they are more open to people lacking credit or having bad credit.

Their online services are top notch and they also offer POPmoney integration support.
You just have to open a savings account with them, by depositing at least $5. 
Being a credit union (credit unions are in general better to deal with than normal banks), you have to be part of some community in order to be eligible for membership. In my case, I stated that I am a member of the FSF - Free Software Foundation.

I hope this is helpful, and congrats for making this step. I'm in Colorado, on a TN.


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## Karen (Jul 24, 2010)

I highly recommend a book called "The Canadian in America" by Brian D. Wruk and Terry F. Ritchie. The subtitle: "Real-Life Tax and Financial Insights into Moving and Living in the U.S." We ordered our copy and it's opposite, "The American in Canada," from Amazon.ca when my late American husband moved here from Alaska to marry me, and we found them both very helpful and very readable.


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## RBull (Jan 20, 2013)

Only tip I have is bring your portable bidet. That will keep you very happy.


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## smihaila (Apr 6, 2009)

RBull said:


> Only tip I have is bring your portable bidet. That will keep you very happy.


??


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