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If you are a U.S. Citizen or a Green Card Holder resident in Canada, you are subject to exactly the same filing requirements that you would be subject to in the U.S.
This means you must file U.S. Form 1040 every year, reporting your worldwide income. This fact may come as a surprise to you if you have been accustomed to Canadian rules, which tax on the basis of residency rather than citizenship.
The net result is that if you are a U.S. citizen resident in Canada, you must file two returns each year: a Canadian return because you live here, and a U.S. return because you are a U.S. citizen. Fortunately, this does not necessarily mean you'll have to pay taxes to both countries. There are several mechanisms available to make sure you're not doubly taxed.
Looking For Help With Cross Border U.S. Taxes as an American in Canada or Canadian with US property?
Personal tax, Rental Income from U.S. properties, Sale of U.S. properties and Estate taxes all require expert handling to ensure the legal minimum taxes are paid and penalties avoided. Storoszko & Associates, U.S. Tax Services provides professional cross-border accounting services to ensure your taxes are filed properly and on-time.
U.S. CANADA TAXES: U.S. Tax Issues for Americans and Canadians
In the United States, the income tax system is based on either citizenship or residence. This is not the case in Canada. Americans living or working in Canada and Canadians living or working in the United States may find themselves taxed on their "world income" in both Canada and the U.S.
The U.S. tax system, administered by the IRS, is complex with many compliance and reporting requirements that are quite different from the Canadian system, administered by the CRA.
Engaging tax specialists with expertise in both the U.S. and Canadian tax systems may not longer be an option for most Canadians that have to deal with these complexities -- not an option, just good sense.
Contact Storoszko & Associates, US Tax Services at 647 872-8200 to discuss this or any other tax questions or issues you may have.