When it comes to your hard-earned money, it’s obvious that you want to save as much as possible when filing your taxes. For people with an office job and a simple tax situation, it is possible to file their own taxes. DIY tax filing is for those with a single source of income and those who don’t have any investments. However, if your tax situation is complicated, especially if you work abroad or have cross-border investments, you need to seek the help of a professional. As the tax situation becomes complex, it becomes crucial to hire a tax professional to ensure accuracy in your tax returns and avoid legal issues.
For instance, an American citizen living in Canada needs to find a cross-border tax advisor to avoid issues like double taxation or worse – criminal prosecution. The citizens of the United States need to file tax returns in USA on their income even if they are working in Canada. It can be challenging to deal with cross-border tax compliance requirements. Likewise, high-net-worth individuals have unique financial, tax, and estate planning needs. That’s why, to handle these complicated financial and cross-border tax planning needs, hiring a cross-border tax planning specialist makes sense. Cross-border tax laws can be extremely complex and can only be understood by tax planning professionals with extensive cross-border training.
The American or Canadian citizens living and working abroad have complex incomes, such as capital gains on property sale or foreign assets, revenue from businesses in different countries, income from interest, and dividends. If all the inbound and outbound transactions are not properly considered, you may face more of your hard earned money paid in taxes. If you still think you don’t need the services of a specialist, here are some more compelling reasons to hire a cross-border tax advisor.
Minimize Tax Burden
When it comes to tax filing, you may seek benefits of certain deductions and credits that are available on the U.S. income tax return. However, to seek these deductions, it is necessary to fill additional forms besides Form 1040, U.S. Individual Income Tax Return. Tax filing obligations are complicated both in Canada and the U.S. Only a professional cross-border tax advisor can help you avoid mistakes and identify relevant deductions and credits to reduce your tax burden.
A single mistake in filing a tax return could lead to costly penalties. Preparing a tax return is complex, especially if you have multiple business transactions, capital gains, or real estate rentals. Different countries have their own unique taxation system. Someone who doesn’t know international tax law could commit serious mistakes when preparing tax returns. So, hiring an experienced tax professional specializing in cross-border taxation will ensure that you comply with your tax obligations. The cross-border tax professional have knowledge of the tax system of different countries, as well as international tax agreements such as double taxation agreements to help their clients that avoid paying tax twice. These professionals eliminate all the confusion and prevent errors that lead to penalties.
Identify All Credits and Deductions
The purpose of hiring a cross-border tax specialist is not just to avoid double taxation. These tax professionals can identify all the tax deductions and credits that you are eligible for and help to minimize your tax liability. High-net-worth individuals with income from foreign sources need a comprehensive tax solution. They need to find a way of ensuring that they are not taxed in two countries. So, to avoid double taxation and seek all possible tax deductions, it becomes crucial to hire a qualified cross-border tax advisor. This professional will carefully consider all possible credits or deductions that you may qualify for. In addition to this, your tax advisor can also assist you with retirement planning, estate planning, and wealth management.