US Personal Tax
You are a US citizen or a US “Green Card” holder. You live and work in Canada and you’re current with all your tax filings with the CRA. But you’ve never filed a US tax return, or it’s been several years since you did. The IRS is looking for you. You are required to file a US personal income tax return every year, even if you don’t owe any taxes. The penalty for failing to do so can be quite severe.
In addition to the tax return, you need to tell Uncle Sam about all your foreign bank accounts. Yes, all your Canadian accounts, including your RRSPs, life insurance and investment accounts are foreign accounts because they are not in the US – why would they be, you live in Canada. The penalty for not disclosing these accounts is also severe, and Canadian banks are required to assist the IRS in locating Americans who have not complied with these filing obligations.
US Corporate Tax
You’re doing business in the US. You’ve only got a few sales. Did you know you are required to file a US income tax return? Did you know there may be state returns? Some cities and other local governments also require income tax returns. Have you considered state or local sales tax? Have you considered that your transactions may be taxed differently in the US than in Canada?
If you’re doing business in the US, even on a limited scale, you have an obligation to file a US corporate tax return. You may, depending on the state, have state income or sales tax returns to file. Some states require each company doing business in the state to register in that state and they may want an annual information return.
US Tax Planning
You may be considering a move to the US. Perhaps you’d like to buy some property. Perhaps your business is considering expanding into the US or perhaps you’ve got a proposed transaction that involves US persons. You want to be sure what the tax implications are before you take that next step.
Other US Tax Concerns
Perhaps the IRS has already found you and you’re in the midst of an audit. Maybe the IRS or the CRA are asking about the prices you charge on cross border transactions.