Many U.S. citizens living in Canada have been unaware of their U.S. tax filing requirements or puzzled about what they need to do and where to start.
Additionally, Canadian citizens who have U.S. income, either through employment or a property located in the U.S. may not realize that they too, are required to file a U.S. income tax return on those earnings.
We are here to help!
There are three distinct filing requirements for all U.S. citizens, even if you live outside of the United States.
- The IRS requires all U.S. citizens to file a U.S. income tax return annually and report their worldwide income
- Specific U.S. Information Returns are also required to be filed by U.S. citizens who have a Registered Retirement Savings Plan (RRSP); Tax-Free Savings Account (TFSA); and/or a Registered Education Savings Plan (RESP)
- All U.S. citizens are required to submit a Report of Foreign Bank & Financial Accounts (FBAR), if you have one or more accounts located outside of the U.S. and those combined balances exceed US$10,000.
Below are further details, based on your particular situation:
U.S. CITIZENS LIVING AND WORKING IN CANADA (Non-Resident Citizens)
- MUST file a U.S. tax return and report worldwide income in addition to the Canadian tax return filed as a tax resident of Canada
- In most cases, due to foreign tax credits and the Tax Treaty between Canada and the U.S., there is little or no additional U.S. tax to pay
- For non-residents, your U.S. tax return is due by June 15th each year. A further extension is available to October 15th,( if required)
Report of Foreign Bank and Financial Accounts (FBAR)
- All U.S. citizens regardless of where they live, are required to file a FBAR if the total value, at any time throughout the calendar year of all of the accounts combined equals US$10,000 or more
- The FBAR is not filed with a federal tax return.
- The FBAR must be filed electronically through FinCEN’s E-Filing System. We are an authorized e-filer with the U.S. Department of Treasury to electronically submit FBAR reports.
- MUST be filed each year by June 30th. There is no allowance for an extension of time to file an FBAR
If you have NOT filed all of your required U.S. Income Tax and Information Returns, or the FBAR, there is an opportunity currently available through the IRS Streamlined Filing Compliance Procedures to come up-to-date and file delinquent returns and FBAR’s without being subject to failure-to-file fines and penalties.Come and talk to us, we will review your situation and determine the best approach for you to file.
CANADIAN CITIZENS WITH RENTAL PROPERTY OR OTHER EARNINGS IN THE U.S. (Non-Resident Aliens)
- The IRS requires any Canadian citizen who earns income within the U.S. to file a non-resident tax return to declare that income.
- You will be required to have a U.S. “Individualized Taxpayer Identification Number” (ITIN) in order to file, if you are not eligible for a Social Security Number (SSN). We can assist you with obtaining a US tax ID number.
- The deadline to file the U.S. Non-Resident tax return is June 15th each year.
CANADIAN AND U.S. CITIZENS LIVING AND WORKING IN THE U.S. (Resident Aliens and Resident Citizens)
- All citizens, foreign or resident earning income within the U.S. must file a resident tax return
- The deadline to file a U.S. Resident income tax return is April 15th each year
Don’t get caught facing penalties and fines!
We strongly encourage compliance with all IRS filing requirements for our clients.
It’s to your benefit to always be in good standing for future dealings within the U.S.
Don’t delay, contact us, we are here to help!
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