Managing taxes is no joke! If not handled properly, you could end up facing an IRS audit and land in serious trouble. Federal tax laws are complicated and things get even more complex when cross-border transactions are involved. Many American citizens start a business in Canada or Canadians move to the U.S. for a job. For these individuals, it becomes necessary to deal with complex tax policies. Many people don’t realize they have to deal with the U.S. tax laws besides abiding by the tax policies in their resident country. And this is where expatriates need to hire a cross-border tax lawyer for taking care of their taxes.
What Does A Tax Lawyer do?
As the name suggests, a tax lawyer specializes in tax law. Tax lawyers provide a range of services to help people optimize their tax situations. They ensure their clients comply with tax rules and could also assist in handling disputes with the IRS or other tax authorities. There are individual tax professionals, as well as law firms offering services such as estate, international, or business taxes. Tax lawyers aren’t the same as financial consultants or auditors. Cross-border tax lawyers help clients navigate international tax laws and resolve domestic tax compliance complications. There are many benefits to seeking the services of a tax professional and here is how hiring a tax lawyer can help.
- Prevent Tax Penalty & Audit
As mentioned above, cross-border tax laws are complex. It can be difficult to learn all the rules and regulations. A single mistake in tax filing could lead to non-compliance and that results in audits and hefty monetary penalties. That’s why you need an expert in international tax law and tax agreements. When you move to another country, a tax lawyer can help navigate cross-border tax regulations. The Internal Revenue Service (IRS) performs vigilant reviews of tax documents. If any error is found during the review, you will end up facing an audit and penalty. An audit by IRS not only carries the risk of fines and imprisonment but also harms your reputation and disrupts your work. So, it’s best to hire a tax lawyer to ensure error-free tax filing.
- Detailed Cross-Border Tax Planning
When moving abroad, you need a comprehensive cross-border tax plan. A cross-border tax specialist not only helps in preventing mistakes in tax filing but also finds the best solutions to minimize tax liabilities. A cross-border tax specialist can help you to take advantage of the US-Canada Income Tax Convention. Their knowledge of multiple tax systems is immensely helpful in preventing double taxation. They can create a cross-border taxation plan that aligns with your financial goals. You need to find a Certified Financial Planner experienced to prepare tax returns for US Federal and State income tax, along with Canadian income tax returns. This will ensure that you comply with tax laws in both countries.
- Save Money
The knowledge and experience of tax professionals help in saving money. They have in-depth knowledge of the tax system that helps in claiming all possible deductions. For instance, a cross-border tax lawyer specializing in Canadian and U.S. taxation understands the tax laws of both countries. The tax professional will your earnings and expenses, along with all available deductions. The goal is to minimize payable taxes and reduce your tax burden. Their knowledge of tax laws helps you claim all deductions or tax credits that can help you save money and improve cash flow. These experts also ensure to avoid of double taxation. It means that stay tax compliant without having to pay taxes in both countries. Tax specialists also take advantage of incentives and credits offered by the government for small businesses.
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