U.S. tax services:
- Preparation of U.S. federal and state income tax returns for you and your family
- U.S. tax calculations
- U.S. and Canada treaty benefits
- Coordination of U.S. and Canadian deductions and credits
- Assistance with correspondence from the Internal Revenue Service
What you need to do
As a U.S. citizen, you must file two returns each year: a Canadian return and a U.S. return. Fortunately, this does not necessarily mean you'll have to pay taxes in both countries, as there are several ways to ensure you're not doubly taxed. The 1040 form is the standard documentation for filing your income tax return to the Internal Revenue Service (IRS). You may be subject to additional U.S. tax reporting and required to fill out more forms if you own or are a beneficiary of Canadian mutual funds, TFSAs, RESPS, RRSPs or RPPs. You also may have U.S. filing requirements if you meet the Lawful Permanent Resident test or have spent a certain amount of time in the United States.
Earned income exclusion
Form 2555 is a special form excluding foreign earned income from taxation in the United States. Ask us how to claim this exclusion.
There is a United States-Canada Income Tax Treaty that may affect your U.S. tax return. Article XXIX of this treaty states that there is nothing in the treaty that can prevent the United States from taxing its own citizens. Even though this provision exists, the treaty does provide some exemption and/or deferral opportunities for U.S. Persons. For more information on gaining exemptions from this treaty, visit an H&R Block office today.
Foreign tax credit or deduction
Another way to avoid double taxation is by claiming a foreign tax credit on your U.S. return for taxes you are required to pay to Canada. To find out how to claim this, make an appointment with an H&R Block U.S. Tax Specialist.
If you live outside the U.S., you have an automatic extension of two months to file your U.S. tax return. In other words, your U.S. return is due on June 15 each year, rather than April 15. This provides additional time for you to complete your Canadian return and determine your Canadian tax liability. This is needed in case you have to claim the foreign tax credit on your U.S. return. While you have until June 15 to file your US tax return, the IRS will begin assessing interest on any unpaid balances on April 15th.
Call us or visit an H&R Block location to discuss your U.S. tax return. Use our Office Locator to help you find the office nearest you.