US

For a full list of payment options, see: https://www.irs.gov/Payments

To pay by mail, include a cheque, money order or cashiers cheque payable to “United States Treasury”. Include the following information on the cheque:

  • Name and address
  • Daytime phone number
  • SSN or ITIN
  • Tax period and form or notice number (eg 2018 Form 1040).

Mail payment to:
Internal Revenue Service
P.O. Box 1300
Charlotte, NC 28201
USA

To help process your payment, we recommend you also include a 1040V payment voucher.

For US returns, we are selectively accepting new clients, usually those who work in the arts & entertainment industry.

Add the following sentence:  Please call our office or email ustax@brianborts.com to discuss your US tax situation.

April 15th – US Residents; Canadians filing non-resident returns
June 15th – US persons living abroad
June 30th – FBAR (no extensions); starting in the 2016 tax year, FBARS deadlines will match return deadlines.

If the due date falls on a weekend or holiday, the deadline is extended until the subsequent Monday.

An extension until October 15th can be filed for all US tax returns, but  interest will accrue on any outstanding balance owing as of April 16th.

US citizens, green card holders, and resident aliens who meet minimum income thresholds are required to file a tax return showing worldwide income. Canadians who have earned income from the US should file a non-resident tax return (certain exceptions do apply).

For US citizens who live and work in Canada can, we can generally prepare much of your US return by referencing your Canadian T1 return. 

If you are
1) a US Citizen/Green Card holder AND
2) living in Canada AND
3) do not have income from US sources
you can use our Simplified US Tax Package.

Those who have income from US sources should use our regular US Tax Package.  If you receive any US tax slips (1099s, etc) please submit them.

If you hold non-US investments (including RRSPs, bank accounts, RESPs, etc), you may also be required to file an FBAR and submit other information about your accounts.  An FBAR worksheet is available on our website.

Please reference the checklists in our US tax packages to ensure that you are including all necessary information and documentation.

The IRS does not have an official exchange rate, but will generally accept any posted exchange rate that is used consistently.

Our office generally uses Bank of Canada exchange rates.

There are two options for non-resident aliens (aka those who are not US citizens or resident):

  1. Have an agent withhold and remit 30% of gross rents to the IRS. In this case, there is no obligation to file a US tax return.
  2. File a 1040NR (non-resident) tax return listing both rental income and expenses. This usually leads to a lower tax liability than the above option, because you are taxed on the net profit of the rental property. If choosing this option, you will need to file a special election in the first year that the property is rented to notify the IRS of your choice.
The US offers various options that will allow you to become compliant in your filing; often that involves doing 3 years of US tax returns and 6 years of FBARs. Please speak to us about your specific situation.

Unlike most other countries in the world, the US taxation is citizenship based, rather than residency based. US persons with income above a certain threshold must file a tax return and show world income. Credit is given for taxes paid in Canada, so US persons living in Canada usually pay no US tax.

If paper-filing your return, we recommend sending it via registered mail so that you have a record.

If you live in Canada, and no payment is included with your return, mail to:
Department of the  Treasury
Internal Revenue Service
Austin, TX  73301-0215
USA

If you live in Canada, and including payment with your return, mail to:
Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303
USA

You can call the International Taxpayer Service Call Center at 267-941-1000. Hours are Monday – Friday, 6:00 a.m. to 11:00 p.m. (Eastern Time):

Note that this is not a toll-free call, and wait times can be significant (45 minutes is not unusual.)
By mail, the address is:
            Internal Revenue Service
            International Accounts
            Philadelphia, PA 19255-0725

For 1040 returns that are eFiled, most refunds are issued within 21 days. For paper-filed returns, the wait time is about 6 weeks.

Non-resident tax returns (1040NRs) take significantly more time to process – 6 months or longer.

You can access “Where’s my Refund” to see the status of your return.

No, the IRS does not send confirmation that returns have been processed.

If your return is electronically filed, our office will receive confirmation from the IRS when the file has been successfully received.

If paper-filing your return, we recommend sending it via registered mail so that you have a record.

You can also access “Where’s my Refund” to see the status of your return.

A tax account transcript is an official IRS document showing basic data such as return type, marital status, adjusted gross income, taxable income and all payment types, as well as any changes made after the original return was filed.

Account transcripts are one of the forms of documentation that CRA will accept as proof of US taxes paid.

To order a Tax Account Transcript online:

Enter the fields (Your address and postal code must exactly match the information entered on your most recent US tax return)

  • For “Type of transcript” select “Account Transcript” and for tax year choose the applicable year

If you are unable to order the transcript online (which happens about 50% of the time), you will need to order a transcript by filling out form 4506-T. See below for instructions.

To order a Tax Account Transcript using Form 4506-T

  • Print the form: https://www.irs.gov/pub/irs-pdf/f4506t.pdf
  • Fill in your name and address
  • On Line 6, put “1040”
  • Check box 6b
  • On Line 9, enter the date of the year you for which you are requesting a transcript in this format DD/MM/YYYY. You may request multiple years at the same time.
  • Sign and date the form
  • Submit the form by fax or mail

          By Fax: 855-298-1145

          By Mail:
          Internal Revenue Service
          RAIVS Team
          P.O. Box 9941
          Mail Stop 6734
          Ogden, UT 84409

Once you receive the form by mail, please send a copy to our office as soon as possible so that we can submit it to CRA.

A Social Security Number, commonly referred to as an SSN, is a nine-digit number issued to individuals who are U.S. Citizens, permanent residents, or temporary alien residents authorized to work in the United States.

An Individual Taxpayer Identification Number, commonly referred to as an ITIN, is a tax processing number available for certain non-resident and resident aliens, their spouses, and dependents who do not qualify for a Social Security Number.  ITINS have 9 digits and begin with “9”. Unlike Social Security numbers, ITINs expire, and can be renewed by filing form W-7.

It is illegal for an individual to have both an ITIN and an SSN.

To obtain an ITIN, complete Form W-7, Application for IRS Individual Taxpayer Identification Number. Form W-7 can be submitted along with a Non-Resident tax return, or separately. Note that if you are including a copy of your passport, it must be certified by the issuing agency (ie a Canadian passport office.)

For more information, see www.irs.gov/individuals/general-itin-information.

Social Security Numbers are issued by the Social Security Administration (SSA). Form SS-5 (Application for a Social Security Card) must be completed, and submitted along with supporting documentation.

U.S. citizens in Canada may apply for an SSN at a U.S. consulate (by appointment). However, it is often faster to apply at a Social Security office in the United States. The Social Security office closest to Toronto is located in Niagara Falls, New York at 6540 Niagara Falls Boulevard.

If applying by mail, you must either submit original documents (which will be mailed back to you), or else documents certified by the custodian of the original record. For example, if you are including a copy of your passport, it must be certified by the issuing agency (ie a Canadian passport office.)

The US Congress recently passed new legislation regarding ITINs (Individual Taxpayer Identification Numbers). Those who are filing US returns will need to renew their ITINs if they have not used their ITIN on a tax return at least once in the last 3 years.

In addition, certain ITINs issued before 2013 have also expired.

ITINs can be renewed using form W-7.

For more information about ITIN renewal see https://www.irs.gov/individuals/itin-expiration-faqs.

To renew an ITIN, taxpayers must complete Form W-7, Application for IRS Individual Taxpayer Identification Number. The ITIN application can, but not need to be, submitted with a tax return.

Note that if you are including a copy of your passport with your ITIN application, it must be certified by the issuing agency (ie a Canadian passport office.)

For more information about ITIN renewal see https://www.irs.gov/individuals/itin-expiration-faqs.

1042-S slips are issued for amounts paid from US sources to non-resident taxpayers who are not US citizens. 1042s can be issued for compensation for services performed in the US, royalties, interest, etc.

Canadian residents (non-US citizens) working in the U.S. temporarily should (in most cases) receive a 1042-S slip so that Social Security and Medicare taxes are not withheld. Before starting work, please discuss with your employer what type of tax slip they plan to issue you.

Generally, 30% taxes are withheld on a 1042S, which then means you must file a US tax return to recoup any overpaid taxes. However, you may be eligible for a reduced withholding rate (or no withholding) if you file Form W- 8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting).

A W-7 form is an application for an ITIN, or Individual Taxpayer Identification Number. For more information, see www.irs.gov/individuals/general-itin-information

A W-8-BEN form is a Certificate of Foreign Status of Beneficial Owner for US Tax Withholding and Reporting. This form should be used only by non-residents who are not US citizens, permanent residents, or green card holders. It lists an individual’s Taxpayer Identification Number, and may also contain information about the tax withholding rate that applies on income. W-8BEN-E forms are used by non-resident entities such as businesses or corporations.

A W-9 form is a request for a Taxpayer Identification Number (often by an employer or financial institution). This form should be used by only by US persons (citizens, permanent residents, green card holders).

Please contact our office to discuss all the considerations, based on your situation.
Owning U.S. real estate has tax implications on both sides of the border, and there are multiple options for how to take title. Make sure to contact a lawyer that specializes in cross-border issues before purchasing real estate. Our office can, upon request, provide you names of lawyers who specialize in this area.
The FBAR is a Report of Foreign Bank and Financial Accounts.

US persons who hold over $10,000 (aggregate) in non-US assets (bank accounts, RRSPS, RESPs, TFSAs, etc) must file an FBAR listing the following details about each account for which they have signing authority (no matter the balance):

  • Bank name and address
  • Account number
  • Individual or joint account (if joint, information about the co-account holders)
  • Maximum amount in account during the calendar year (often the Dec 31st balance)

***The FBAR is submitted separately from a tax return. The deadline to submit the FBAR matches your US tax return filing deadline.

We encourage you to file your own FBAR at: http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html. Once completed, submit your FBAR electronically via the The BSA E-Filing System.

If you have requested that our office prepare your FBAR, you can use our worksheet to enter your information. If we have prepared your FBAR previously, you can ask us to send you a copy in Excel format, so that you just update the relevant information for the current year.

We encourage you to file your own FBAR at: http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html. Once completed, submit your FBAR electronically via the The BSA E-Filing System.

Remember to list ALL accounts for which you have signing authority. For each account, you will need to provide the following information:

  • Bank name and address
  • Account number
  • Individual or joint account (if joint, information about the co-account holders)
  • Maximum amount in account during the calendar year (often the Dec 31st balance)
Form 8938 is filed as part of a 1040 tax return, and includes much of the same information as an FBAR. Reporting thresholds (aggregate) are:

  • Living outside the US, filing as single: $200,000 at year end (or $300,000 at any point during the year); filing jointly: $400,000 at year end (or $600,000 at any point during the year)
  • Living in the US, filing as single: $50,000 at year end (or $75,000 at any point during the year); filing jointly: $100,000 at year end (or $150,000 at any point during the year)
The US has many reporting requirements around foreign financial assets, aka FBARs, Statements of Specified Foreign Financial Assets, etc. Note that information about accounts held in Canada by US persons is now being reported to the IRS as per FATCA (Foreign Account Tax Compliance Act) legislation.
The Foreign Account Tax Compliance Act (FATCA) is legislation requiring non-US financial institutions to report information about financial accounts held by US persons to the IRS. Canada and the US have an agreement in which financial institutions in Canada will report this information to Canada Revenue Agency (CRA), and CRA will share this information with the IRS.

Certain types of accounts (including RRSPs, RESPs, and TFSAs) are excluded under the agreement, but should still be reported as per IRS filing and reporting requirements.

RRSPs, like traditional IRAs, are sheltered until distributed. The RRSP account value needs to be reported on your FBAR and/or Form 8938 (if applicable), but the income that builds up inside the RRSP isn’t taxed federally until the money is withdrawn.

If you sell your principal residence, capital gains above $250,000 (if single) or $500,000 (for a couple, if both are US persons) are taxable in the US… even if the home is in Canada. When calculating the capital gain, you may deduct the following from the sale price:

  • The cost of renovations or improvements made while you owned the property
  • Costs incurred during the sale, aka closing costs, real estate commission, etc.
TFSAs and RESPs do not receive special tax treatment in the US, so all interest, dividends and capital gains inside those plans must be reported annually on a US return. US persons may decide to transfer RESPs into the name of a non-US person (spouse, parent or grandparent, etc).
Yes; interest, dividends and capital gains inside RESPs or TFSAs must be reported annually on a US tax return; please submit statements and/or tax slips for these accounts.
Canadian mutual funds may be considered PFICs (Passive Foreign Investment Companies), and if so special reporting requirements and tax rules apply. Mutual funds held inside registered accounts (i.e. RRSPs and RRIFs) are exempt from PFIC reporting requirements.

***If you hold Canadian mutual funds, please let us know so we may analyze your situation.

A PFIC (Passive Foreign Investment Company) is a non-US corporation in which 75% or more of the gross income is passive, or 50% or more of its assets produce passive income.

Canadian mutual funds may be considered PFICs, and if so special reporting requirements and tax rules apply. However, mutual funds held inside registered accounts (i.e. RRSPs and RRIFs) are exempt from PFIC reporting requirements.

***If you hold Canadian mutual funds, please let us know so we may analyze your situation.

Some mutual fund companies provide PFIC Annual Information Statements. If you have received these or other US tax materials related to your mutual funds, please submit them along with your tax package.

Some dual citizens are opting to renounce their US citizenship. In order to do so, you must be up-do-date in filing your US taxes for the previous 5 years.