Living abroad as a Canadian is exciting, but tax mistakes can quickly turn your dream into a financial headache.
From missed deadlines to misreporting foreign income, even experienced expats make errors that lead to penalties, audits, or unnecessary double taxation.
At Accounting Montreal, we’ve seen these mistakes firsthand, and we know exactly how to help you avoid them.
1. Failing to Determine Residency Status
Your tax obligations depend entirely on whether you’re a resident, non-resident, or deemed resident. Get it wrong, and you could be taxed twice.
Fix: Book a residency status review before filing.
2. Ignoring the Departure Tax
When you leave Canada, certain assets are deemed sold, triggering a capital gains tax. Many expats only discover this after they’ve moved.
Fix: Plan asset sales or transfers before departure to reduce taxable gains.
3. Missing the Filing Deadline
Out of sight doesn’t mean out of mind for the CRA. Late filing can mean penalties and interest charges — even if you owe nothing.
Fix: Set reminders for Canadian deadlines, adjusting for your time zone.
4. Misreporting Foreign Income
You must report worldwide income if you’re still considered a Canadian resident. Underreporting can trigger audits and fines.
Fix: Keep accurate records of all foreign earnings and currency conversions.
5. Overlooking Tax Treaty Benefits
Many expats pay more tax than necessary because they don’t apply the relevant tax treaty provisions.
Fix: Review your country’s treaty with Canada before filing.
6. Contributing to TFSA as a Non-Resident
Non-resident contributions are subject to a 1% penalty per month until removed.
Fix: Stop TFSA contributions once you become a non-resident.
7. Forgetting to File Required CRA Forms
Forms like T1161 (Listing of Property by an Emigrant) are often overlooked but mandatory for certain departures.
Fix: Work with a tax professional to ensure all forms are filed on time.
8. Neglecting to Claim Foreign Tax Credits
Without claiming credits, you could pay tax twice on the same income.
Fix: Keep proof of taxes paid abroad and claim them on your Canadian return.
9. Not Reporting Canadian Rental or Investment Income
Even as a non-resident, you must report certain Canadian-sourced income, often with withholding taxes.
Fix: File a Section 216 return or NR6 form to potentially lower tax rates.
10. DIY Filing Without Understanding Expat Rules
Canadian expat tax law is complex. Filing without guidance often means missed deductions or treaty benefits.
Fix: Hire an expat tax specialist to ensure compliance and maximize savings.
How Accounting Montreal Helps
We:
- Review residency status
- Apply tax treaty benefits
- Handle departure tax planning
- File on time from anywhere in the world
- Maximize credits and deductions
Most expat tax mistakes are avoidable with the right advice. Don’t let misinformation or oversight cost you money.
Contact Accounting Montreal today for a complete expat tax review before your next filing.
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