U.S. Foreign Reporting Requirement For U.S. Persons Living In Canada

U.S. Foreign Reporting Requirement For U.S. Persons Living In Canada

  • by admin / September 22, 2020

W If you are a U.S. person (U.S. citizen or green-card holder), you must file annual U.S. income tax returns regardless of where you live or how long you have been away from U.S. and you are taxed on your income from all sources, both within and outside of U.S. In addition to being subject to U.S. income tax on worldwide income, as U.S. person, you are also required to file various U.S. foreign information returns as discussed below. Non-compliance may result in penalties.

REPORT OF FOREIGN BANK AND FINANCIAL ACCOUNTS (“FBAR”)

You (U.S. person) are required to file FinCEN Form 114 Report of Foreign Bank and Financial Accounts if you meet the following:

  • You have a financial interest in or signature authority over any financial account in a foreign country including Canada; and,
  • The aggregate value of those foreign financial accounts is more than US$10,000 at any time during the calendar year.

The due date of filing FBAR is April 15 of the following year. But a permanent automatic extension of the filing deadline to October 15 is granted without submitting an actual request for extension

FOREIGN FINANCIAL ASSET REPORTING

Foreign Financial Asset Reporting is required in addition to the FBAR reporting. Some examples of the foreign financial assets subject to the reporting include:

  • Stocks or securities issued by a foreign corporation
  • Notes, bonds, or debentures issued by a foreign corporation
  • Partnership interest in a foreign partnership
  • Interest in a foreign retirement plan or deferred compensation plan
  • Interest in a foreign estate
  • Interest in a foreign-issued insurance contract or annuity with a cash-surrender value

As U.S. person living outside of the U.S., you are required to report the specified foreign financial assets on Form 8938 if the total value of these assets exceeds the following amount:

  • $200,000 at the end of the year or $300,000 at any time during the year
  • $400,000 at the end of the year or $600,000 at any time during the year if you and your spouse file the U.S. tax joint return

 

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