PR Obligation - Filing US taxes w/no US income?

[Patrice_e]

The past three years I've been living in Canada w/my Canadian fiance on a visitor's-, then study-, and now post-grad work permit. I will be applying for PR within the year. I am a US citizen who was self-employed in the states. My tax gal filed US income taxes for me for 2009, as I owed some, but the past two years I haven't made any money in the states. (I co-own a couple of rental properties there, but they both lost money.)

Last year (2010 taxes) she told me I didn't need to file, which made me very uncomfortable... I've never NOT filed, but I said ok. This year (2011 taxes), she's saying the same thing. I pay taxes in Canada on my income here for 2010 and will also for 2011.

My question is, even though I've made no money in the states, will I be required to submit copies of the past couple of years' US tax returns as part of my PR application?

Many thanks,
Patrice

 

[SenoritaBella]

No. Only the most recent T4's and NOA from canadian earned income need to be included with PR application.

You are required by the IRS to file annual tax returns regardless of where you live and work. It has nothing to do with whether you owe or not. It is in your best interest to become compliant buddy.

http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/irs-hints-at-leniency-for-americans-living-in-canada/article2265020/

http://www.theglobeandmail.com/globe-investor/personal-finance/home-cents/four-tips-for-americans-looking-to-come-clean-on-their-taxes/article2268221/

 

[YorkFactory]

You are not required to file a U.S. tax return if you make less than the standard deduction. However, it's probably a good idea to do so, as it starts the clock ticking on the IRS's ability to challenge the information on your return, and it means there's no gap that they can suddenly ask you about five years from now.

 

[Leon]

As far as I know, as a US citizen, you are required to file taxes in the US for the rest of your life no matter where you are in the world. I found this article on the issue: http://ottawalawyersconnection.com/2011/03/28/tax-obligations-of-u-s-citizens-living-in-canada/

Canada and the US have a tax treaty so you shouldn't be paying extra taxes to the US because of your Canadian income but you should still file.

 

[YorkFactory]

The standard deduction for 2011 was $5,800 for single people and $11,600 for married couples filing jointly. In general, if you make less than the standard deduction, you aren't required to file a return. Living outside the U.S. doesn't matter (it's not a reason for you not to file, or a reason why you must file).

If you are unsure, you should ask an accountant who has experience with cross-border tax issues.

 

[Patrice_e]

Thanks, everyone, for your replies and article links. I'll be filing 2010 and 2011 taxes to the IRS and will send FBARs to the US Dept of Treasury, along with a letter of why last year's is late.

The standard deduction for 2011 was $5,800 for single people and $11,600 for married couples filing jointly. In general, if you make less than the standard deduction, you aren't required to file a return. Living outside the U.S. doesn't matter (it's not a reason for you not to file, or a reason why you must file).

If you are unsure, you should ask an accountant who has experience with cross-border tax issues.

This is exactly why my accountant said I didn't need to file, as it would be unnecessary for me to file if I were living in the states with an income under $5800. However, as you noted, Leon and SenoritaBella, the IRS requires its paperwork from ex- or soon-to-be ex-pats. Forever. Bah. :

Thanks also, SenoritaBella, for letting me know that copies don't need to be included with the PR application.

Your expertise is much appreciated.

 

[YorkFactory]

However, as you noted, Leon and SenoritaBella, the IRS requires its paperwork from ex- or soon-to-be ex-pats. Forever. Bah.

Moving outside the U.S. does not change the filing requirements. If you didn't make enough money to be required to file, living in Canada will not change anything about that.