Phil Hogan | TaxConnections

22 Mar 2019

How To File U.S. Income Tax Returns In Canada

Phil Hogen - What US Canada Filings Need To Be Completed

The first question we need to ask is whether you are actually required to file U.S. tax returns. Generally speaking, U.S. citizens and Green Card holders are required to file U.S. tax returns regardless of where they live. Therefore Americans living in Canada, whether they have recently moved to Canada, or have been in the country their entire lives, are required to file U.S. tax returns, in addition to their regular Canadian tax returns.

Once you have established that you are required to file U.S. tax returns, the next step will be to assess your actual filing requirements. Please keep current with US/Canada tax law changes as they can significantly affect your annual filing requirements.

What forms need to be filed?

Assuming you are above the required income filing threshold, you will need to complete Form 1040 for the current year. The 1040 is the general income tax form, and is really only 2 pages long. The bulk of your annual U.S. income tax filings will be comprised of additional forms and schedules.

Written by Phil Hogan | Posted in TaxConnections

30 Jan 2019

Who Needs To File Form 114 Foreign Bank Account Reporting

FBAR stands for “Foreign Bank Account Reporting”. Originally numbered as TDF 90-22.1, the FBARs current form number as revised a few years ago is currently form 114.

Who Needs To File Form 114 (FBAR)?

Form 114 is required to be filed by all US citizen, Green Card Holders and tax residents of the USA that meet the FBAR filing threshold requirement. This compliance form reports all foreign financial accounts (defined below) held by US taxpayers. The filing threshold is calculated by taking the total aggregate highest balance in all “foreign financial accounts”. If the total calculated exceeds $10,000, the taxpayer is required to file FBAR forms.

What Is A “Foreign Financial Account”?

A foreign financial account is defined as a “financial account” held outside of the USA. A financial account is defined in the instructions for form 114 as:

Written by Phil Hogan | Posted in Form 114- Foreign Bank Account Reporting

28 Jan 2019

Tax Fairness For Americans Abroad Act of 2018

On December 20th, 2018 Congress member George Holding of North Carolina introduced the Tax Fairness for Americans Abroad Act of 2018 bill into the House. This announcement garnered the attention of many US citizen taxpayers abroad for obvious reasons.

The introduced bill outlines an alternative taxation regime for US citizens living abroad. In simple terms the bill introduces the following measures:

the bill would allow US citizens to be taxed based on a residency established system.
for those considered “non-resident citizen” current worldwide reporting and taxation to the US government would not be required (assuming proper elections are filed)
US Citizens would continued to be taxed on certain US source income
US Citizens would be taxed on any sale of property or capital property during the time they were considered “resident Citizen of the US”
In order to be considered a qualify “non-resident citizen” the taxpayer would need to be fully compliant for tax purposes during the last 3 years.

Phil Hogan

Written by Phil Hogan | Posted in Tax Fairness • TaxConnections

24 Jan 2019

Canada Revenue Agency (CRA) Has Shared Over 1.6 Million Documents With The IRS To Date

Phil Hogan - Canada- US Cross Border Tax Issues

The Canada Revenue Agency (CRA) continues to supply information to the IRS on U.S. Citizen owned investment and bank accounts. According to CBC, CRA has already shared over 1.6 million Canadian banking records with the IRS. Even with the significant sharing of documentation we are still not seeing an increased level of new clients being contacted by the IRS.

You would think that if the IRS has such a large of amount of banking information from United States citizens abroad they would be enforcing compliance by reaching out to these Americans. This might be something that has yet to happen and may be on the horizon.

Written by Phil Hogan | Posted in Canada-US Cross Border Taxes