income tax return - proof of spouse's US income?

[Marrigold]

Hello,

I am rather belatedly preparing to file my income tax return for 2013. In 2013 I was married to my US husband, whose outland sponsorship application was still in process. In filing my taxes for 2013 what documentation do I need to provide for my husband's US income (no Canadian income)? He was working as a volunteer in US in 2013 and didn't file US taxes as he had no income.

Looking forward to 2014 taxes, now that my husband is a PR in QC - will he need to start filing US taxes too even though he has no income there? I ask particularly for instances where family income needs to be stated, e.g. child credits.

thank you!

 

[rhcohen2014]

yes, if your husband is a US citizen, he is required by law to file taxes every year of his life even if he does not reside in the US. It doesn't matter where he lives, he is obligated to always file taxes in the US every year of his life. It is commonly recommended for US citizens to file taxes in Canada first, then the US, so any taxes paid in canada are credited toward the US return.

Also, if he has access to $10,000 or more in foreign bank accounts, he must file extra paperwork to report it to the IRS. This total is not just for 1 account, it is the cummulative total of ALL accounts he is an owner of or has signing rights for. This includes any accounts in his name, any joint accounts shared by you, any children savings accounts he is a signer on, and any business accounts he is a signer on. So if he has a checking account, a joint account, and children savings accounts that total $10,000 or more, he must report it.

 

[screech339]

yes, if your husband is a US citizen, he is required by law to file taxes every year of his life even if he does not reside in the US. It doesn't matter where he lives, he is obligated to always file taxes in the US every year of his life. It is commonly recommended for US citizens to file taxes in Canada first, then the US, so any taxes paid in canada are credited toward the US return.

Also, if he has access to $10,000 or more in foreign bank accounts, he must file extra paperwork to report it to the IRS. This total is not just for 1 account, it is the cummulative total of ALL accounts he is an owner of or has signing rights for. This includes any accounts in his name, any joint accounts shared by you, any children savings accounts he is a signer on, and any business accounts he is a signer on. So if he has a checking account, a joint account, and children savings accounts that total $10,000 or more, he must report it.

If I'm not mistaken, he must also report any RRSP accounts as along with the list you gave.

 

[keesio]

If I'm not mistaken, he must also report any RRSP accounts as along with the list you gave.

Yup. That and RPP, RESP, TFSA... pretty much any kind of account that has money in it if you exceed the total threshold.

 

[Alurra71]

Hello,

I am rather belatedly preparing to file my income tax return for 2013. In 2013 I was married to my US husband, whose outland sponsorship application was still in process. In filing my taxes for 2013 what documentation do I need to provide for my husband's US income (no Canadian income)? He was working as a volunteer in US in 2013 and didn't file US taxes as he had no income.

Looking forward to 2014 taxes, now that my husband is a PR in QC - will he need to start filing US taxes too even though he has no income there? I ask particularly for instances where family income needs to be stated, e.g. child credits.

thank you!

You don't need to provide CRA with any documentation regarding your spouses' income for US or lack there of. If he had none, then write none. That is what our accountant did when filing our taxes my first year here. It was sufficient.

As to the second half. Yes, your husband will indeed need to file an tax return in the us every year whether he has income there or not. As stated by others, there are rules and regulations that must be followed and you should probably spend the extra money on a tax accountant that is well versed in cross border income tax filings. I know that is what I plan to do this year even though I don't have RRSP and all that other stuff, my husband does. My name is not listed anywhere on any of these accounts, but I want to make double/triple/quadruple sure that the good ole US of A doesn't come back to slap me later on! LOL

 

[screech339]

You don't need to provide CRA with any documentation regarding your spouses' income for US or lack there of. If he had none, then write none. That is what our accountant did when filing our taxes my first year here. It was sufficient.

As to the second half. Yes, your husband will indeed need to file an tax return in the us every year whether he has income there or not. As stated by others, there are rules and regulations that must be followed and you should probably spend the extra money on a tax accountant that is well versed in cross border income tax filings. I know that is what I plan to do this year even though I don't have RRSP and all that other stuff, my husband does. My name is not listed anywhere on any of these accounts, but I want to make double/triple/quadruple sure that the good ole US of A doesn't come back to slap me later on! LOL

IRS won't go after your spouse's RRSP since your name is not attached. However if you have a joint account with your spouse, your spouse basically have to list all his accounts, whether or not, your name is listed. Pretty evasive of US tax reaching rules.

I hope I am wrong but I believe that to be the case.

 

[Alurra71]

IRS won't go after your spouse's RRSP since your name is not attached. However if you have a joint account with your spouse, your spouse basically have to list all his accounts, whether or not, your name is listed. Pretty evasive of US tax reaching rules.

I hope I am wrong but I believe that to be the case.

We have joint checking. I'm going to let the accountant worry about it. Yeah, the US is far reaching and quite invasive in a lot of things, but they think they're justified. Whether or not they are remains to be seen, but I can't change the tax law so I'll just follow the rules and stay off the radar

 

[Marrigold]

Everyone - this is super helpful.

I do have RRSPs and TFSAs (assets prior to our marriage and his PR status though), but why does my US husband need to report these to IRS? Does he have to report them if he is just listed as a beneficiary? Will he pay income tax on my gains? That doesn't seem to make any sense to me.

In order to evade the IRS's invasivenes should I keep my husband's name off all my accounts, children's accounts etc?
Thanks for enlightening me, grrrrr

 

[Alurra71]

Everyone - this is super helpful.

I do have RRSPs and TFSAs (assets prior to our marriage and his PR status though), but why does my US husband need to report these to IRS? Does he have to report them if he is just listed as a beneficiary? Will he pay income tax on my gains? That doesn't seem to make any sense to me.

In order to evade the IRS's invasivenes should I keep my husband's name off all my accounts, children's accounts etc?
Thanks for enlightening me, grrrrr

I really don't know how it all works, sorry. I would surely consult with someone familiar with the cross border tax laws to ensure I was getting accurate information. At the very least someone here who has been doing this for a few years now and knows the ins and outs.

 

[keesio]

Your US husband only needs to report accounts in his name to the IRS. If you have a joint account where he has signature authority, then those count also. Accounts in your name do not need to be reported if you are not a US citizen. The IRS and US State Dept only cares about accounts held by US citizens. Assuming you are not a US citizen, you have no obligation to report or file anything to the IRS or US State Dept. Any income of your accounts that don't have his name on it does not have to be reported to the US or taxable by the US.

Hence you may want to keep your accounts separate as much as possible. For example if you have an RESP, have it in your name and keep your husbands name off it.

If you exceed the FEIE limit, note that for the most part, double taxation can be avoided so if you want to have a joint account, it is not necessarily bad. He would have to pay CRA for taxes on income earned and then use that as credit when he reports the earnings in his US taxes. But it is just extra work to deal with. And note that TFSA, RESP are not recognized by the IRS as a valid tax shelter so he may have to pay taxes on it. And the US may see it as a trust so you need to fill out the forms for a trust. Basically the recommendation for US citizens is to avoid TFSA, RESP and Canadian mutual funds - not worth the hassle.