U.S. Cross Border U.S. Citizens Living in Canada
Many U.S. citizens live in Canada for many years and have been filing their Canadian income tax returns unaware that they also, as U.S. citizens, have to file annual U.S. tax returns by June 15th (October 15th under extension).
In addition, most of these U.S. citizens have bank accounts, RRSPs, TFSA and other investment accounts in Canada that aggregate to $10,000 USD during the year, which must be reported annually by June 30th (no extensions) to the Department of Treasury on an FBAR report.
Up to this point, there have been large penalties for failure to file, particually for failure to file the FBAR reports.
Good news has been received from the IRS, that we encourage U.S. citizens to take advantage of, and catch up on, their past filings. Under the IRS Streamlined procedure for U.S. citizens and Green card holders living outside the United States, taxpayers can come into U.S. tax compliance. Basically, the taxpayer is required to catch up with their past 3 years of all U.S.tax return filings (Form 1040, 3520, etc.) and 6 years of FBAR filings along with Form 14653: "Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures", and pay any taxes owing, if any. If done correctly, there will be no additional failure to file FBAR report penalties. This procedure should be exercised as soon as the U.S. citizen or Green card holder becomes aware of their annual U.S. tax filing obligations.
Our experience shows that most U.S. citizens have made more than enough Canadian federal and provincial combined taxes, that they owe no U.S. taxes.
We welcome you to call us at 716-694-3500 (NY) or 416-766-3941 (Toronto) or email us
, so that we can assist you in being tax compliant and catch up on your past filings with the IRS and have no worries.
Contact Marlies Hendricks
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