U.S. Tax Accountant in Toronto

Generally, U.S. citizens living in Canada remain subject to U.S. federal income-tax filing rules when the applicable filing requirements are met. U.S. citizens generally consider worldwide income for U.S. tax purposes, so Canadian employment, investment, rental or business income can be relevant. Canadian tax paid may also be considered under applicable foreign tax credit rules.

A lawful permanent resident who continues to be treated as a U.S. resident for federal tax purposes can generally remain subject to U.S. income-tax rules even while living in Canada. Their circumstances may involve Form 1040, Canadian income, foreign tax credits and international reporting. Immigration status and tax residency should be reviewed carefully rather than assuming Canadian residence automatically ends the U.S. tax obligation.

A Canadian who is treated as a nonresident alien for U.S. federal tax purposes may need Form 1040-NR in certain situations involving U.S.-source income, U.S. trade or business activity, rental income, a refund claim or other applicable filing circumstances. The requirement depends on the type of income, withholding and the taxpayer's U.S. tax status.

FBAR is the Report of Foreign Bank and Financial Accounts, filed on FinCEN Form 114. A U.S. person generally has an FBAR filing requirement when they have a financial interest in, signature authority over or other authority over foreign financial accounts and the aggregate value of the relevant foreign accounts exceeds US$10,000 at any time during the calendar year. Canadian bank and investment accounts can therefore be relevant for U.S. persons living in Canada.

No. Form 8938 and FBAR are separate reporting requirements. Form 8938 is filed with an applicable U.S. income-tax return and relates to specified foreign financial assets when the taxpayer meets the relevant reporting threshold. FBAR is filed separately through the FinCEN system and has different rules. A taxpayer can potentially have one requirement, both requirements or neither.

Potentially. Eligible Canadian income taxes paid or accrued can be relevant when calculating a U.S. foreign tax credit. Form 1116 may be required for an individual foreign tax credit claim depending on the circumstances. The credit is subject to specific limitations and income categories, so it should not be assumed that every Canadian tax payment creates an equal dollar-for-dollar reduction of U.S. tax.

Form 2555 is used to claim the foreign earned income exclusion and certain foreign housing benefits where the taxpayer meets the applicable requirements. Living in Canada by itself does not automatically establish eligibility. Tax home, foreign earned income and either the applicable bona fide residence or physical presence requirements need to be considered.

Yes, depending on the investment. Certain non-U.S. corporations, funds or other investment structures can introduce additional U.S. information-reporting or tax considerations. For example, certain foreign investment companies may need to be reviewed under the Passive Foreign Investment Company rules and Form 8621 requirements. Canadian account treatment should therefore be reviewed by account and investment type rather than assumed to match Canadian tax treatment.

The appropriate approach depends on your filing history and why the filings were missed. Eligible taxpayers residing outside the United States whose failures resulted from non-willful conduct may qualify for the Streamlined Foreign Offshore Procedures. The procedure generally involves the most recent three required years of tax returns and six years of delinquent FBARs, together with the required certification and applicable tax and interest. Eligibility should be reviewed before submitting prior-year filings.

An ITIN is generally available to an individual who needs a U.S. taxpayer identification number for federal tax purposes but is not eligible for a Social Security Number. The application uses Form W-7 together with the required identity, foreign-status and supporting tax documentation. For more detail, read our U.S. Tax I.D. Numbers for Canadians guide .

Possibly. U.S. state income-tax rules are separate from the federal system and vary significantly by state. Employment, business activity, property, residency history or other connections with a state can create a filing question even when you currently live in Canada. State filing requirements therefore need to be reviewed separately from the federal return.

The fee depends on the actual filing scope rather than one price for every taxpayer. Factors can include whether Form 1040 or 1040-NR is required, state returns, foreign tax credits, FBAR, Form 8938, investments, property, business ownership, international information forms and prior-year filing issues. Filing Taxes can review the situation and provide a quote based on the work required.