A Tax Accountant Will Help You Avoid US-Canada Cross-Border Tax Problems

If you are an US entrepreneur hoping for business transactions in Canada or a Canadian resident working in the US, cross border income is something you should consider. You need to know whether your taxes are paid in the country where you are working or the country of origin. Most people do not know about tax compliance when working or doing business in foreign countries and this ignorance can come with hefty tax fines and audits. To avoid all these it is best to work with accounting firms Windsor Ontario trusts.

Get Knowledge on Cross-Border Taxes

One of the major mistakes that many people do not know is that the USA taxes its citizens on whatever they earn across the world. Therefore, if you are a USA citizen, you have to pay your tax obligations on time. However, in Canada, those who are no longer Canadian citizens are not obligated to pay taxes.

Avoid Tax Mistakes

Cross-border tax mistakes are extremely common since many people do not know about these rules and regulations governing them. A tax accountant will help keep these rules in mind when filing tax on both countries. The IRS has a right to tax you if you are working in the USA and the Canadian Revenue Authority can also tax its citizens worldwide. Foreign tax credit consultants can help you avoid common cross-border tax blunders. These professionals also know the 1980 Canada-U.S. tax treaty that impacts your tax filing process and your future planning.

Cross-border tax experts will help you identify the situation and will guide you throughout the tax filing process.  You can trust expert consultants since they can help you determine what you should do to avoid double taxation and ensure you get the tax exemptions that you are eligible for.

How Can You Survive A CRA Audit for Foreign Tax Credits

Today, more and more individuals and businesses face CRA audits. Canada Revenue Agency (CRA) has ramped up audits of foreign tax credits for both individuals and small-to-medium sized businesses. If you are singled out, you can get prepared by getting information of how CRA selects foreign taxpayers for audits and knowing what to expect during the audit. Here are a few tips to help you survive a CRA audit.

Avoid Getting a CRA Audit

Most foreign taxpayers are simply chosen randomly for a tax audit. Other people are targeted because of things that they give or omit on their tax returns. You can always work with a cross border tax accountant to help you avoid getting a CRA tax audit in the first place.

Keep Detailed and Accurate Records

One of the best ways of surviving an audit is to have detailed and precise records. Good bookkeeping habits will also help the auditors to do their work and will get them away from you sooner. Ensure that you keep copies of all your personal investment, bank, credit card, and RRSP statements for you and the family, including the business records. This will help to speed up matters and will be less expensive if the CRA requests for them during the treaty tax return audit.

Hire a Tax Professional

When you get a notification from the CRA regarding the upcoming audit, be sure to hire a tax accountant. This will ensure that you have qualified representation during the entire audit process. Furthermore, you will have a tax expert who has your best interest at heart.

Tax review processes are done randomly among foreign taxpayers. Therefore, having this check does not mean that there are errors on the tax return or you are being suspected of anything. Furthermore, if you do not agree with the CRA assessment, you can always appeal their ruling. Ensure that you put these tips in mind as a taxpayer eligible for cross border tax.