Ties to the U.S.? Here’s who files where.

01U.S. citizens file wherever they live

The U.S. taxes its citizens and green card holders no matter where they live. If you’re a U.S. citizen living in Canada, you generally file a U.S. return every year, as well as your Canadian return.

02Canada taxes residents on everything

If you live in Canada, you report your income from everywhere to the CRA, including U.S. wages, investments, and rental income.

03You usually don’t pay twice

The Canada-U.S. tax treaty and foreign tax credits are designed so the same income isn’t taxed twice. In practice, you file in both countries and claim credit for tax already paid in the other. For many people living in Canada, little or no U.S. tax ends up owing, but the returns still need to be filed.

04Accounts outside the U.S. need reporting

• FBAR: if your Canadian bank and investment accounts add up to more than US$10,000 at any point in the year, you report them to the U.S. Treasury.
• Form 8938: larger account totals may also need reporting with your U.S. return. People living abroad have higher thresholds.

These are reports, not taxes, but the penalties for missing them can be steep.

05RRSPs and TFSAs are treated differently

• RRSP: the treaty generally lets growth stay tax-deferred in the U.S. too.
• TFSA: the U.S. doesn’t recognize it, so income inside it can be taxable on your U.S. return.

Canadian mutual funds and ETFs can also bring complex U.S. reporting. If you’re a U.S. citizen, talk to us before you open a TFSA or buy Canadian funds.

06The deadlines don’t line up

Canadian personal returns are due April 30, or June 15 if you’re self-employed, with any balance still due April 30. U.S. returns are due April 15, with an automatic extension to June 15 for citizens living abroad. Interest on any U.S. balance still starts after April 15.

07Canadians who spend winters in the U.S.

Spending a lot of time in the U.S. can make you count as a U.S. resident for tax purposes under the substantial presence test. Many snowbirds file Form 8840, the Closer Connection Exception Statement, to show their real home is in Canada. It’s usually due June 15.

08Never filed? There’s a way to catch up

Many Americans in Canada didn’t know they had to file. The IRS has a catch-up program, the Streamlined Filing Compliance Procedures, for people whose missed filings weren’t willful. It usually means three years of returns and six years of FBARs.

09How we help

We prepare both returns together, so the credits line up and nothing falls between them. We also help people catch up on missed U.S. filings and plan around RRSPs, TFSAs, and investments.