US CITIZENS : Living Abroad, but still filing tax returns for the IRS

[Hnhkrk]

Hello Hello.

So, now that I'm established and working in Canada I'm going to have to file tax returns not only in Canada, but also in the USA. I've been looking the IRS website a little bit, and I'm mega confused. I'm just wondering how you guys go about paying your US taxes and if any of you have filed by yourself. What is the process you take? What are things I should look out for? Who do you go to, if you go to someone?

I have made just under 2k, and I won't end up paying any taxes here in Quebec/Canada, I don't know if that's relevant or not.

Also, what is this I hear about the US wanting you to claim any account over 10k? My husband and I's bank account went over the 10k threshold this year, are they going to tax that money?

 

[Ponga]

The U.S. is one of only two countries in the world (the other being a small country in Africa) that assess tax based on citizenship, rather than residency. The good news, is that you are not taxed twice, because the U.S. and Canada have a tax treaty. Yay!

Are you employed by a company in Canada, meaning that you are not an independent contractor?

If you are independent, you will need to pay U.S. Federal tax on anything over $400.


I can't speak to the bank question, but you might get an answer by researching: FATCA

 

[keesio]

In short: If you have a complex tax situation, I suggest going to an accountant that specializes in cross-border taxes. It is costly but worth it. Complex would be if your income exceeds the FEIE (97K+), trying to use the FTC, sold stocks, have mutual funds, trusts, etc.

If you earned under 2K, you could probably do it on your own. I would still recommend for your first time you hire a professional so you get the hang of it. But again can be costly (I spend roughly ~1K on my US tax returns as they are a bit complex, it should be cheaper for a simpler return).

10K thing is the FBAR reporting to the US Treasury Dept (it is different from FATCA). Basically if your combined foreign (as in outside the USA) accounts total over 10K at any time in the year, you must report all your accounts (with max value of each for the year) to the US Treasury Dept. Note that the only accounts that matter are ones that are held by a US citizen. If your husband is not a US citizen, then his accounts do not need to be reported and also do not come into play for the 10k threshold. However if he has joint accounts with your name on it too, then it does count. Note that the FBAR is all about reporting. There is no taxes involved here. You are simply reporting what foreign accounts you have.

Other good advice for starters - don't get a TFSA. Don't get an RESP under your name. Avoid Canadian Mutual Funds.

Lots of good info in this thread:
http://www.canadavisa.com/canada-immigration-discussion-board/-t184395.0.html

 

[Hnhkrk]

The U.S. is one of only two countries in the world (the other being a small country in Africa) that assess tax based on citizenship, rather than residency. The good news, is that you are not taxed twice, because the U.S. and Canada have a tax treaty. Yay!

Are you employed by a company in Canada, meaning that you are not an independent contractor?

If you are independent, you will need to pay U.S. Federal tax on anything over $400.


I can't speak to the bank question, but you might get an answer by researching: FATCA

WHAT?!!! That's absurd! I worked as a dog walker, which is technically an independent contractor, and I made 2k! Ugh.


I'de love to hire an accountant, but I don't have nearly the money to pay for that. We hire one for our canadian taxes, but they cost barely a thing. I'll have to look into it more, and just breathe my way through it. If I was able to fill out all the immigration papers, I should be able to fill out some forms online... right?

I know tons of people who don't file, and I almost want to join them... but I don't want to get into trouble. ack ack ack.

 

[keesio]

WHAT?!!! That's absurd! I worked as a dog walker, which is technically an independent contractor, and I made 2k! Ugh.


I'de love to hire an accountant, but I don't have nearly the money to pay for that. We hire one for our canadian taxes, but they cost barely a thing. I'll have to look into it more, and just breathe my way through it. If I was able to fill out all the immigration papers, I should be able to fill out some forms online... right?

I know tons of people who don't file, and I almost want to join them... but I don't want to get into trouble. ack ack ack.

If all you made was 2K in foreign (non-US) income and don't have much else in investments and savings, then all you need to do is file along with your standard 1040 is the FEIE (Foreign Earned Income Exclusion) form which exempts you from paying US taxes for the first 97K. It shouldn't be too bad from what I understand. Things start to get tricky when you exceed the FEIE limit and have "special" accounts and investments like RRSP/RPP/RESP/TFSA, stocks and Mutual Funds and the like. Then an accountant makes life a lot easier.

 

[Hnhkrk]

If all you made was 2K in foreign (non-US) income and don't have much else in investments and savings, then all you need to do is file along with your standard 1040 is the FEIE (Foreign Earned Income Exclusion) form which exempts you from paying US taxes for the first 97K. It shouldn't be too bad from what I understand. Things start to get tricky when you exceed the FEIE limit and have "special" accounts and investments like RRSP/RPP/RESP/TFSA, stocks and Mutual Funds and the like. Then an accountant makes life a lot easier.

Ah, okay. WEll in that case I can probably just file myself.

I'm actually trying to figure out if I nee dto file in Quebec at all. Ahhh, tax season here is going to be good fun!

 

[keesio]

Ah, okay. WEll in that case I can probably just file myself.

I'm actually trying to figure out if I nee dto file in Quebec at all. Ahhh, tax season here is going to be good fun!

yeah I hate this time of year lol.