Did you know?
The United States is one of 2 countries worldwide that taxes based on Citizenship?!? The African country of Eritrea is the other citizenship-based taxation system, which imposes a flat 2% rate on its citizens’ foreign income.
Who might need to file a U.S. tax return?
- U.S. citizens and green card holders (regardless of where you live in the world)
- Canadian and snowbirds living in the U.S., you may have to file a tax return or a Closer Connection Exemption Statement (form 8840) depending on your particular circumstance
- Those who have rental real estate in the U.S.
- People who are disposing of their U.S. real property may need to file a tax return.
- Individuals who have had withholding on their U.S. gambling winning may also want to file.
What’s your filing deadline?
Like Canada, the United States have their individual filing deadline set in April.
The U.S. deadline is the 15th of April versus the Canadian deadline of April 30th (both countries allow additional days should the deadline occur on a holiday or on a weekend).
If you are a resident of a foreign (to the U.S.) country you are entitled to an automatic 2-month extension of time to file, and pay, your US taxes.
If you expect not to be able to meet your June 15th filing deadline, then you should file form 4868 “Application for Automatic Extension …” prior to this date. This will allow you to file your return as late as October 15th (an additional four-month extension). Interestingly, the FBAR also has an automatic 6-month filing extension. But the FBAR filing extension does not require filing the request.
Foreign Bank Account Reporting (FBAR).
Are you are a U.S. citizen who has foreign, to the U.S., bank accounts and other financial interests. Moreover is their combined total value exceeding $10,000 USD at any point in the year??? Then you are required to report all of your accounts to the U.S. Department of the Treasury. FBAR is an acronym for Foreign Bank Account Report. And this document is just that, a report, it is not a return that triggers tax!
What accounts are we talking about?
The reported accounts would include, but not necessarily limited to;
- TFSA’s,
- RRSP’s,
- RRIF’s,
- Bank accounts (Chequing, Savings, etc.) &
- Trading accounts.
- Don’t forget to include your joint accounts and
- Accounts over which you have signing authority but no financial interest!
Form FinCEN114 is electronically filed annually (if you meet the previously stated threshold). Be warned that failure to report these accounts may result in a penalty of up to $10,000 per account.
Furthermore, be aware that Canada Revenue Agency and the Internal Revenue Service communicate, at minimum, annually about accounts held by U.S. citizens in Canada.
What U.S. services to we offer?
- U.S. form 1040 individual tax returns
- Cross Border Financial Planning
- U.S. corporate tax returns
- 1040-NR non-resident tax returns; including gambling winning withholdings, real property dispositions, rental property returns.
- W-7 “Individual Taxpayer Identification Number” Applications and Certifying Acceptance Agent services (certifying your passport for ITIN purposes, you keep your passport).
What we include in our Tax Preparation Service?
- Preparation of federal, state and county level tax returns required depending on your circumstance.
- Analysis of the Canada/U.S. Tax Treaty as it may relate to your situation
- Disclosure Statements prepared relating to your treaty-based position
- Accounting and claiming of tax credits and deductions on your Canadian and US tax returns
- Representation should you need to correspond with the IRS or CRA
We are here to help meet your U.S. filing obligations. If you would like to discuss your situations and your options please do not hesitate to call us at: 204.292.1051 or send us and email.