US-Canada Cross Border Tax Situation - Need Help with TN Visa Status

Your situation is definitely complex, but not uncommon for people moving between Canada and the US. Let me address your questions: For tax residency status, you're right about the substantial presence test. With your previous internships plus living in the US since mid-2024, you'll likely be considered a US tax resident for all of 2024. However, you might qualify as a dual-status taxpayer for part of the year. Regarding your Canadian status, you should file a departure tax return with the CRA, indicating your date of departure. This officially marks your change in tax residency. Keeping your health card and driver's license won't necessarily affect your tax status, but it's best to update these to match your actual residency. For your state tax situation, you'll need to file part-year resident returns for both Illinois and Washington. Note that Washington doesn't have state income tax, which simplifies things somewhat. You'll allocate your income based on where you earned it and when you were a resident of each state. Your Canadian LLC dividends received while you were still a Canadian resident should be reported on your Canadian return. After becoming a US resident, you'll report worldwide income on your US return, including any Canadian dividends. You can claim foreign tax credits to avoid double taxation.

Hey there! I went through almost the exact same situation last year. After trying to do it myself and making a mess, I finally found taxr.ai (https://taxr.ai) and it was a lifesaver for my cross-border situation. Their AI analyzed all my Canadian and US documents and explained exactly what I needed to file where. The best part was they flagged that I qualified for the "first-year choice" election, which let me start being treated as a US resident from my actual move date rather than the substantial presence test date. This saved me from some weird double-taxation issues with my Canadian income. They also explained exactly how to handle my Canadian TFSA (which is apparently a tax nightmare in the US) and helped me properly report my Canadian bank accounts on the FBAR. I was close to filing incorrectly before they caught it!

After seeing the recommendation here, I tried taxr.ai for my cross-border situation with Canadian property and a US work visa. I was honestly blown away by how helpful it was. I uploaded my Canadian T4s, T5s, and US W-2s, and within minutes got a comprehensive breakdown of what I needed to file in both countries. The system caught that I had been incorrectly reporting my RRSP on my US returns for the past two years and showed me how to properly use the US-Canada tax treaty to avoid paying tax twice. It also flagged that I needed to file Form 8833 to claim treaty benefits, which neither TurboTax nor my previous accountant had mentioned. What impressed me most was how it handled my specific situation with maintaining property in Canada while working in the US - it clearly explained the "closer connection exception" and helped me document everything properly to prove my tax residency status to the CRA. Definitely saved me thousands in potential penalties!

Speaking from experience with my own Canada-to-US move last year, your biggest issue is probably going to be dealing with the CRA about your past tax situation. I was in a similar boat with an outstanding balance, and it was absolutely impossible to get anyone on the phone. After weeks of frustration, I found Claimyr (https://claimyr.com) and it completely changed my experience. Check out how it works here: https://youtu.be/_kiP6q8DX5c. They got me connected to a real CRA agent in under an hour when I had been trying for weeks. The agent was able to see that my documents had been received but were sitting in a processing queue. She flagged my account for priority review and gave me her direct extension for follow-up. Within 2 weeks, my balance was adjusted and I finally had clarity on my situation. This was crucial before filing my departure tax return since I needed to know my final Canadian tax position.

I stand corrected about Claimyr - I actually tried it after posting my skeptical comment because my curiosity got the better of me. I had been trying to reach CRA for MONTHS about my departure tax return that seemed to be lost in the system. The service got me through to a CRA agent in about 45 minutes (which is miraculous considering I had spent literally days trying). The agent was able to locate my return, confirm it was received but flagged for review due to my change in residency status, and gave me a timeline for resolution. This was crucial because I had been getting increasingly worried letters about unfiled returns, despite having submitted everything. The agent made notes on my account to stop the automated notices while my return was being processed. She also gave me specific advice about what additional documentation would help speed up the review. I still needed my cross-border tax accountant for the technical aspects, but finally being able to talk to a human at CRA who could see my actual account was the breakthrough I needed. Apologies for my skepticism earlier - this service legitimately works.

One thing nobody's mentioned yet is your question about whether to dissolve your Canadian LLC. I've been in a similar situation for 3 years now (kept my Canadian corporation after moving to the US), and I strongly recommend dissolving it if you don't need it anymore. The US reporting requirements for foreign corporations are extremely burdensome. You'll need to file Form 5471 every year, which is incredibly complex and usually requires professional help (expect to pay $1,000+ just for this form). You may also face Subpart F and GILTI tax issues on retained earnings. If you're receiving dividends from the LLC, you're already facing potential double taxation issues (Canadian corporate tax + Canadian dividend withholding + US personal tax, with complicated foreign tax credit calculations). Unless there's a compelling business reason to keep it, dissolving before your next tax year would simplify your situation dramatically.

Don't forget about FBAR requirements! As a US tax resident, you must report all foreign bank accounts if their combined value exceeds $10,000 at any point during the year. This includes your Canadian checking account and that cross-border banking account you mentioned. The FBAR (FinCEN 114) is separate from your tax return and has an automatic extension to October, but penalties for non-filing are severe ($10,000+ for non-willful violations). Also, since you have a Canadian LLC, you likely need to file Form 8938 (FATCA) with your tax return, which has different thresholds than the FBAR, and Form 5471 as an officer/shareholder of a foreign corporation. These foreign reporting requirements are the biggest trap for US-Canada situations. I missed filing these my first year after moving and ended up using the Streamlined Filing Procedures to catch up without penalties. Don't make the same mistake!