The people who can benefit from our cross-border financial, tax and estate planning and investment management consulting expertise include:
- Executives and professionals working and living across the border
- Canadians retiring in the United States and Americans retiring in Canada
- Small business owners with companies on both sides of the border
- Canadians returning to Canada and Americans returning to the United States
- Canadian and U.S. expats living abroad
- US citizens with divorce or separation asset allocation or alimony payment issues.
- US citizens considering citizenship renunciation.
Connect with the team at Kaman Kwok Inc if you have a question about our services. If we cannot help you, we can direct you to the right place.
Below are a list of questions that we see asked most often. These are real questions, from real people. We welcome anyone who is unsure of their tax position with a cross-border situation to post their questions here and we will endeavor to provide you a quick answer. Deep questions with complicated answers will require a call or meeting, but we will advise you if we feel you need to come see us.
US tax law require all US citizens to file tax returns with the IRS, and pay any taxes resulting from the filing. However, the Canada-US tax treaty and other related domestic exemptions are in place to prevent double taxation in both countries. Therefore, US citizen living in Canada may or may not pay any US taxes as a result of filing. Some examples where US citizens living in Canada may need to pay the US tax are: if you earned US source income; you have not paid enough Canadian tax to fully reduce your US tax liabilities via foreign tax credit; your US source income is significantly higher than your Canadian income. These are a few – there are more situations you may be required to file. In addition to the US income tax filing, there are additional foreign disclosures that US citizens will need to comply or they may be subject to late filing penalty. Call us and we can assist you in understanding where you stand.
If you have a foreign financial account (bank account, brokerage account, mutual fund, trust, or other type of foreign financial account) where you hold financial interest or signature authority exceeding US$10,000 in aggregate, the Bank Secrecy Act require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).
If you are delinquent in filing your US tax returns, you may be qualified to file under the streamlined tax filing procedures administered by the IRS. The streamlined tax filing procedures only require you to file three most recently years of tax returns and six years of FBAR forms. If you do not qualify to file under the streamlined program, other less favourable options are also available.
Yes, all US citizens are subject to US gift tax rules, however, exemptions apply to certain gifts throughout the year. In 2017, the annual exclusion is US$14,000 per recipient, US$149,000 to non-resident spouse, and unlimited for US spouses.
Opening a TFSA or holding Canadian mutual funds may result in additional tax and costs to file your US tax return. The IRS may view the TFSA as a foreign trust and form 3520/3520-A would need to be filed along with your US tax return. In addition, Canadian mutual funds may be considered Passive Foreign Investment Companies (PFIC) for US tax purposes, and form 8621 are required to file for each PFIC you owe.