Taxes for U.S. Expats in Canada | H&R Block® https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/ Tue, 16 Apr 2024 21:45:23 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.hrblock.com/expat-tax-preparation/resource-center/wp-content/uploads/2022/10/cropped-hrblock-32x32.jpg Taxes for U.S. Expats in Canada | H&R Block® https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/ 32 32 What U.S. Expats Need to Know About The Foreign Earned Income Exclusion (FEIE) https://www.hrblock.com/expat-tax-preparation/resource-center/income/foreign/foreign-earned-income-exclusion-for-u-s-expats/ https://www.hrblock.com/expat-tax-preparation/resource-center/income/foreign/foreign-earned-income-exclusion-for-u-s-expats/#respond Mon, 04 Mar 2024 20:42:09 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=241 Learn more about the Foreign Earned Income Exclusion with this tax guide from the Expat tax experts at H&R Block. Find out if you qualify for an exclusion on your expat taxes.

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The Foreign Earned Income Exclusion (FEIE) is one of the most common tax benefits U.S. expats have access to. If you’re eligible, it allows you to to exclude all or a portion of your foreign earned income from their United States taxes.

But before you jump to claim the FEIE, there are a few things you should know:

  • If used properly, the FEIE can save you thousands of dollars on your United States taxes
  • It’s not a blanket foreign income exclusion — there are stipulations on what you can exclude and what you can’t
  • You don’t automatically get the FEIE — you need to meet specific qualifications and then file the proper paperwork (Form 2555)
  • The FEIE isn’t your only tax relief option — you should ask your Tax Advisor what options are available to you based on your specific situation.

U.S. taxes for expats aren’t easy. Let our experienced Expat Tax Advisors help prepare your tax return this year to ensure the foreign earned income tax exclusion is elected when it is most beneficial to you. Ready to claim the FEIE? We’ve got a tax solution for you — whether you want to DIY your expat taxes or leave it to one of our experienced Tax Advisors. Head on over to our Ways to File page to choose your journey and get started.

What foreign income can you exclude with the FEIE?

The Foreign Earned Income Exclusion can help reduce or eliminate U.S. taxes on foreign income earned while working abroad, but it doesn’t apply to all sources of income.

This exclusion is only available for earned income and doesn’t apply to passive or investment income such as interest and dividends. Foreign earned income includes:

All income must have been earned in a foreign country to count as foreign earned income.

Note: You might qualify for the foreign earned income exclusion even if the country in which you’re working doesn’t assess income tax on compensation, like the UAE.

Who qualifies for the Foreign Earned Income Exclusion?

The foreign income tax exclusion applies to those who have lived abroad for a certain period of time within the tax year. However, partial-year exclusions are available if you’ve recently moved to a foreign country or returned to the U.S. mid-year.

The FEIE is available to expats who either:

Employees of the U.S. government can’t claim the foreign income exclusion. However, an employee of a private company under contract with the U.S. government might still be eligible.

Passing the Bona Fide Residence Test

To qualify as a Bona Fide Resident and pass the test, you must prove that you have more ties to a foreign country than the U.S. You also must be a resident of that country for an uninterrupted period that includes an entire tax year. When and if you go back to the U.S., you must have the intention of returning to your current foreign country of residence. In addition, you must:

  • Be a U.S. citizen or be a resident alien of a foreign country with which the U.S. has an income tax treaty.
  • Earn active income. Unearned, or inactive, income like pension payouts, interest, and dividends cannot be included.
  • Be overseas for work for a period longer than a year.
  • Have a permanent place of work in a foreign country.

It is possible to be a Bona Fide Resident for part of the year if you spent at least a full tax year outside the U.S. in a prior year. As a result, you can claim the FEIE for part of the year.

Passing the Physical Presence Test

To qualify under the Physical Presence Test, you must have been living outside the U.S. for 330 full days out of the year. Be careful when you track your time, because a “full day” counts as 24 hours starting at midnight, and you need to be in-country for every minute of those 24 hours.

For example, if you lived in Windsor, Canada and popped over the border to Detroit for Friday night and came back Saturday evening, you wouldn’t be able to count that time towards your 330 full days.

How much foreign income can I exclude?

If you’re an expat and you qualify for a Foreign Earned Income Exclusion from your U.S. taxes, you can exclude up to $112,000 or even more if you incurred housing costs in 2022. (Exclusion is adjusted annually for inflation). For your 2023 tax filing, the maximum exclusion is $120,000 of foreign earned income. If you’re married and both of you meet either the bona fide residency test or the physical presence test, you can each claim the FEIE.

Foreign Tax Credit vs. Foreign Earned Income Exclusion

It’s important to choose between the foreign income exclusion vs. foreign tax credit wisely. If you claim the exclusion and then change back to the foreign tax credit, you can’t claim the exclusion again for five years. The only way to claim the exclusion again involves a costly process with the Internal Revenue Service (IRS). Get tax help from an expat tax advisor to help you understand your options.

Claiming the foreign tax credit and filing Form 1116 might be the better option if any of these apply:

  • You’re paying foreign tax at a higher rate than your U.S. tax rate
  • You wish to participate in an individual retirement arrangement (IRA)
  • You qualify for certain family-related credits based on non-excluded income
  • You wish to exclude or reduce taxes on passive or investment income

Foreign Earned Income Exclusion extensions

Even if you haven’t been out of the country long enough to claim the exclusion by your expat filing deadline, you can request an extension to file until you’ve met these time requirements.

You generally must claim the exclusion either:

  • Within one year of the due date of your tax return
  • By amending a timely filed return

However, you may claim the exclusion if:

  • The IRS hasn’t discovered your failure to file your return claiming the exclusion, or
  • You owe no tax after taking the exclusion into account

If you haven’t filed returns in prior years, you still might be able to exclude your foreign earned income from U.S. tax. This could have the effect of eliminating your tax liability and any penalties and interest that would be assessed.

Foreign Housing Exclusion and Foreign Housing Deduction

If you’re an expat and you incur foreign housing expenses, you might be able to exclude or deduct them. The Foreign Housing Exclusion is available for expats working as employees with housing expenses like rent and utilities.

The foreign housing deduction is available for self-employed expats paying foreign housing expenses. The amount of your housing exclusion or deduction is based on the difference between the following:

  • Your actual foreign housing expenses
  • A base amount for your foreign country of residence

You can use the Foreign Housing Exclusion if your housing costs total more than 16% of that year’s FEIE.

To calculate the maximum amount you can exclude, you’d multiply that year’s maximum income exclusion by 0.3 to get 30% of the full exclusion amount. So, for 2023, you’d take $120,000 x 0.3 = $36,000. Something to know is that most large metro areas have higher limits, so it’s important to have a Tax Advisor who knows the ins and outs of taxes in your specific area.

Common problems U.S. expats have with the foreign income exclusion and Form 2555

U.S. expats have a lot of the same questions and issues when they file their FEIE, but these are the most common problems associated with the FEIE:

  • You didn’t file Form 2555 – Many expats assume that if they qualify for the FEIE it will be automatically added to their tax filing. To claim the FEIE you must file Form 2555.
  • You’re a government employee — Unfortunately, U.S. government employees cannot claim this foreign income exclusion.
  • You failed to calculate the FEIE correctly – If you calculate your FEIE incorrectly you won’t get the correct amount excluded.
  • You claimed the FEIE when you should have claimed the FTC – For example, if you’re retired abroad and you only have investment and passive income, you may have been better off claiming the FTC.
  • You didn’t track your time properly – You must be vigilant about tracking your time if you want to pass the Bona Fide Residency or Physical Presence tests. Even being off by a few hours can mess up your qualifications.
  • You had no active income for that year – If you’re living abroad off investment or passive income, you don’t qualify for the FEIE.
  • You didn’t pay your U.S. self-employment taxes – You still have to pay self-employment taxes when you’re claiming the FEIE.

These are only a few of the most common issues and problems we come across. If you’re having difficulties or are a new American expat, it’s smart to leave your expat taxes to a specialist.

File your Foreign Earned Income Exclusion with H&R Block

Filing taxes while living and working abroad can be overwhelming and stressful. As an expat, your tax situation is very different and requires specialized expertise. Get started with H&R Block’s Expat Tax Services today.

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The U.S./Canada Tax Treaty Explained https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/the-u-s-canada-tax-treaty-explained/ https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/the-u-s-canada-tax-treaty-explained/#respond Mon, 04 Mar 2024 19:23:01 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=284 The U.S./Canada tax treaty helps prevent U.S. expats living in Canada from paying taxes twice on the same income. Learn more about this treaty, its tax implications, and how it can help.

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The U.S. and Canada have historically had a great relationship, and that relationship extends to taxes within each other’s borders. The U.S./Canada tax treaty dictates, among other things, how U.S. citizens in Canada and Canadian citizens in the U.S. should be taxed in certain circumstances, and it saves a lot of headaches when it comes to tough tax scenarios.

Keep reading to find out more about the U.S./Canada tax treaty below, including why it exists, what all it covers, and how to make sure you’re getting the benefits you’re entitled to. Not sure about tax filing requirements for your U.S. expat taxes in Canada? We’re here to help. Get started on your expat taxes now.

Why the tax treaty between the U.S. and Canada exists

The U.S./Canada tax treaty, in summary, alleviates tax issues for U.S. citizens and residents living in Canada and Canadians living in the U.S.

Most countries around the globe, including Canada, have some form of income tax that residents are obligated to pay. This can create problems for U.S. expats because Americans file U.S. income taxes even if they aren’t living in the U.S. at the time.

The reason for this is that the U.S. is one of the few countries in the world that imposes taxes based on citizenship, not place of residence. In Canada, your Canadian tax obligation is based on residency status which is determined by the Canada Revenue Agency (CRA). The U.S. policy leaves some Americans responsible for taxes in two countries — once in the U.S. and once in their country of residence. One of the purposes of tax treaties is to solve this double taxation issue, and the United States treaty with Canada is no different.

The U.S. does have certain tools like the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC) that help alleviate the double taxation issue, but there were still some sticky situations — U.S. citizens with Canadian pensions and tax–free retirement accounts, for example, ran into trouble when it came to U.S. taxation of those accounts. The U.S./Canada tax treaty addresses those concerns and directs how those situations and individuals should be taxed.

Among other things, it also addresses cross-country expat financial reporting, to ensure transparency between Canadian financial institutions and the U.S.— so if you’re behind on U.S./Canada financial reporting like your FBAR and FATCA filing requirements, you should get caught up with Streamlined Filing as soon as you can.

Get started on Streamlined Expat Tax Filing now.

Saving Clause

Most U.S. tax treaties have what’s known as a saving clause. The saving clause essentially states that a country may tax its citizens as if the treaty never existed. As a result, it renders most provisions of the treaty ineffective for Americans living in Canada, but leaves them open for Canadian citizens living in the U.S.

This is one reason you should get familiar with the FTC — so that if you need to, you can claim it against Canadian taxes paid. The FTC can be claimed in some instances only because of the exceptions to the saving clause.

U.S. taxation on Canadian retirement plans

One question we hear on a regular basis from American citizens living in Canada is, “How are Canadian retirement plans taxed in the U.S.?”

If you’re a U.S. citizen and you receive benefits from a Canadian Pension Plan and the Old Age Security Plan, the Internal Revenue Service (IRS) will treat those benefits the same as U.S. social security payments for tax purposes.

Get started on your expat taxes now.

How to claim U.S./Canada income tax treaty benefits

The vast majority of tax benefits you get from the U.S./Canada tax treaty don’t have to be claimed. If you found yourself in one of those rare, complicated situations that a specific article alleviates, you’d file Form 8833 with your tax return and include your situation in the summary. Before you run out and file Form 8833, talk to an Expat Tax Advisor.

Get help with claiming Canada/U.S. tax treaty benefits or filing U.S. taxes from Canada

Whether you’re an American who has recently relocated to Vancouver or are a full–on U.S./Canada dual citizen who’s lived in Toronto for decades, we’ve got the tax solutions for you. Whether you file expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help. Get started on your expat taxes now.

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U.S. Tax Guide for American Expats in Canada https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/u-s-tax-guide-for-americans-living-in-canada/ https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/u-s-tax-guide-for-americans-living-in-canada/#respond Mon, 04 Mar 2024 19:19:33 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=286 Get tax advice for U.S. Citizens or green card holders living in or moving to Canada. H&R Block explains everything you need to know to file U.S. expat taxes in Canada

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With H&R Block, you can feel confident knowing you’ve found the right expertise for your U.S. expat taxes in Canada. We’ve outlined a few considerations U.S. citizens working in Canada should know about U.S. and Canada taxes below, including what affects the tax you pay and which forms you may need to file. Of course, expat tax rules are complex and go far beyond what we’ve listed below, which is why we made it simple to get your expat taxes done right. Get started on your U.S./Canada taxes now!

What Americans living in Canada should know about U.S. taxes

For starters, Americans and U.S. green card holders living in Canada should continue to file a U.S. tax return each year. As a U.S. citizen, you have a tax obligation to the U.S. regardless where you hang your hat. That means you’re taxed on all your income, including income from your wages, dividends and interest, and rental properties.

Working as a U.S. citizen in Canada can affect your taxes even if you don’t stay long. For example, if you earn income while on a short-term assignment, you’ll need to report that income on your U.S. taxes. As you establish deeper financial roots in Canada, you’ll have more considerations for your American tax filing.

You may need to report your Canadian financial accounts and assets. Generally, U.S. taxpayers with more than $10,000 in foreign bank or financial accounts are subject to FBAR filing and reporting requirements. You may also be subject to FATCA reporting requirements if you have foreign assets valued at $200,000 and higher.

U.S. tax penalties are steep, and can result in fines, a revoked passport, or even jail time. If you’re tempted to skip filing your U.S. taxes or additional financial reporting, you’ll pay the price later. Canada is one country that complies with FATCA reporting—meaning Canada and the U.S. can exchange information about an individual’s financial accounts. Considering the hefty fines and penalties that come from not reporting your assets (upwards of $10,000 in fines per year), it’s worth it to have a U.S./Canada tax expert go through your documents to make sure you’re reporting the correct amount.

You can lower your U.S. bill and avoid dual taxation with certain tax strategies. If you were worried about double taxation between the U.S. and Canada, you can relax. U.S. citizens working in Canada may take advantage of one of two options, detailed below, to lower their taxes:

  • The Foreign Earned Income Exclusion and Housing Exclusion – The FEIE and housing exclusion allow American expatriates living in Canada to exclude up to a certain amount of foreign earned income if they meet certain requirements.
  • Foreign Tax Credit – The Foreign Tax Credit allows Americans to claim a dollar-for-dollar credit on Canadian taxes paid if they meet certain requirements.

I’m a U.S. citizen retiring in Canada. What do I need to know about U.S. taxes?

If retiring up north is your long-term goal, you should first understand how taxes work when retiring abroad. To start, you still may have to file a U.S. tax return even if you retire in Canada. You’ll also still have to report money in any foreign financial accounts on your FBAR if you meet the requirements

Canadian tax-free investments are not tax-free in the United States. If you own a Canadian Tax-Free Savings Account (TFSA), Registered Education Savings Plan (RESP), or Registered Disability Savings Plan (RDSP), your contributions can grow tax-free as far as your Canadian taxes are concerned. However, your earnings are subject to U.S. taxes, and you may need to report your account as a foreign grantor trust.

Your Canadian pension and retirement account earnings can be eligible for special treatment. Thanks to the U.S. – Canada tax treaty, any benefits paid from the Canada Pension Plans (CPP), Quebec Pension Plan (QPP) and Old Age Security (OAS) pension programs may not be subject to income tax.

Additionally, the U.S./Canada tax treaty allows you to defer U.S. tax on undistributed earnings from a Canadian Registered Retirement Savings Plan (RRSP) or Canadian Registered Retirement Income Fund (RRIF) in certain situations. However, while contributions to such accounts are also tax deferred, the RRSP and RRIF are still subject to FBAR and FATCA reporting.

You might need to report your Canadian retirement and pension on Form 1040. Your H&R Block tax advisor can help you determine if your earnings can be deferred and the appropriate reporting for your U.S. and Canadian taxes. Plus, if you choose to do both your Canadian and American taxes with Block, you’ll only need to provide your information once.

Taxes for U.S.-Canada commuters

Since Canada is America’s upstairs neighbor, there are situations in which you might find yourself popping over the border for work.

For example, let’s say you live in Detroit and work for a Canadian company in Windsor, or the opposite. You would still have to file a U.S. tax return, and you may also have to file a Canadian tax return. Because each situation is different, we recommend you file with an advisor and let them help determine whether you have to file both Canadian and U.S. taxes as a commuter.

Basics of Canada taxes for U.S. citizens

Do expats pay taxes in Canada? Will you pay taxes to the Internal Revenue Service (IRS) or the Canada Revenue Agency (CRA) or both after moving to Canada? As a U.S. citizen working and living in Canada, you may also have to file Canadian taxes:

  • Canadian tax residents are taxed on all income, regardless of where it’s earned.
  • Nonresidents are taxed on income from employment, business in Canada, investments in Canada and/or capital gains from the sale of a Canadian property.

Who qualifies as a Canada resident? We recommend you speak with a residency expert, but generally, you’re considered a Canadian resident if you maintain residential, social, and economic ties in Canada or if you stay in Canada more than 183 days.

Canada’s federal income tax rates range from 15% to 33%. Similar to taxes in the U.S., the percentage of tax that you pay increases as your income increases into different brackets. Depending on their tax bracket, some Americans would pay higher income tax rates locally than in the U.S.

It’s generally more favorable for Americans living in Canada to use the foreign tax credit vs. the FEIE—but there are exceptions. Your tax advisor can help you make the right decision.

2023-2024 Tax Rates

Tax Rate
15% on the first $53,359 of taxable income
20.5% on the next $53,358 of taxable income (on the portion of taxable income over $53,359 up to $106,717), plus
26% on the next $58,713 of taxable income (on the portion of taxable income over $106,717 up to $165,430), plus
29% on the next $70,245 of taxable income (on the portion of taxable income over $165,430 up to $235,675), plus
33% of taxable income over $235,675

Provincial/Territorial tax rates top out from 11.5% to 25.75% Ontario has surtax of 20% and 56%


The tax filing season is similar to the U.S. tax year, but with a few differences.
 Canadian taxes follow a January to December tax year. Tax returns are due on April 30 for individuals and June 15 for self-employed taxpayers. In general, no extensions are allowed.

How to file U.S. taxes from Canada

It’s simple to file U.S. taxes from Canada with H&R Block’s Expat Tax Services. Here’s how to file your U.S. expat taxes online:

  1. Head on over to our Ways to File page
  2. Pick your journey—in the driver’s seat with our online DIY tool or letting a Tax Advisor take the wheel.
  3. Once you’re through your chosen journey, you review your return and pay
  4. We file your return with the IRS
  5. You sit back knowing your taxes were done right

How H&R Block can help Americans living in Canada with taxes

Thousands of U.S. expats living in Canada have chosen H&R Block to handle their U.S. expat taxes for the peace of mind their taxes are done right. Not only can you trust our expertise and guidance to find your credits and tax-saving opportunities, you can get it all done from the comfort of wherever you call home. Get started on your U.S. taxes today!

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FBAR vs. FATCA: Filing Requirements for Americans Abroad https://www.hrblock.com/expat-tax-preparation/resource-center/tax-law-and-policy/tax-acts/fbar-vs-fatca-filing-requirements-for-americans-abroad/ https://www.hrblock.com/expat-tax-preparation/resource-center/tax-law-and-policy/tax-acts/fbar-vs-fatca-filing-requirements-for-americans-abroad/#respond Sun, 02 Apr 2023 19:51:00 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=259 Learn more about FBAR and FATCA filing requirements for U.S. expats from the tax experts at H&R Block.

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What’s the difference between FATCA and the FBAR? If you’re unsure, you’re in the right place—the Foreign Bank Account Report (FBAR) and FATCA Form 8938 are two common and important forms you may have to file if you have money in foreign financial accounts. It’s crucial to understand what each one’s for and their filing requirements — filing one or both incorrectly or not filing when you’re supposed to can lead to some serious penalties.

Understanding each form is key to avoiding a problem with the IRS or the Financial Crimes Enforcement Network (FinCEN), so below we’ll dive into the FBAR and FATCA Form 8938 filing requirements for Americans abroad. If you’re still unsure which tax documents you need to file or if you haven’t filed taxes in a few years, it’s always best to trust these forms to an experienced advisor.

Need to file FinCEN Form 114 or FACTA Form 8938? Whether you want to file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.

FBAR vs. FATCA: Do you file FinCEN Form 114, Form 8938, or both? What’s the difference?

A common question Americans with assets in foreign bank accounts ask us is if they need to file an FBAR (the actual form you’d file is FinCEN Form 114) or FATCA Form 8938. The answer is: You could have to file one, none, or both. While they both exist to report financial assets to the government, they differ in a number of ways. For starters, they get sent to different places — you send your FBAR to the Financial Crimes Enforcement Network and send Form 8938 to the IRS.

We’ll dive more into the individual FBAR and FATCA filing requirements below, but here’s the quick who-what-where-when comparing the two:

FATCA Form 8938FBAR (FinCEN Form 114)
Who filesU.S. citizens and certain U.S. corporations, trusts, and partnerships who also fall in the following thresholds:Citizens living in the U.S.:Unmarried individual (or married filing separately) with assets valued at more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.Married individual filing jointly with assets valued at more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.
Citizens living outside the US:Unmarried individual (or married filing separately) with assets valued at more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.Married individual filing jointly with assets valued at more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.
Other specified domestic entities:Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the tax year.
U.S. citizens, resident aliens, trusts, estates, and domestic entities whose assets in reportable foreign financial accounts exceed a total of $10,000 at any time during the calendar year.
Where it gets filedWith your yearly IRS tax returnWith FinCEN, the Financial Crimes and Enforcement Network of the U.S. Treasury Department
Filing deadlineBy the filer’s U.S. income tax return due date.By the filer’s U.S. income tax return due date (automatic extension to Oct 15 in prior years)
Penalties for failing to fileYou’re fined up to $10,000 for failure to disclose and then another $10,000 every 30 days after the IRS notifies you of a failure to file. While the maximum fine is a penalty of $50,000 the IRS may also apply criminal penalties.$10,000 for each failure to file; if the IRS determines that the failure was willful, that fine goes up to the greater of $100,000 or 50% of account balances. Criminal penalties may also apply.

FATCA filing requirements

The Foreign Account Tax Compliance Act (FATCA) is a part of the government’s efforts to combat offshore tax evasion. American expats of all income levels with foreign accounts and assets should know about it. FATCA requirements impact U.S taxpayers and overseas financial institutions:

  • U.S. taxpayers with foreign accounts and assets may need to file Form 8938: Statement of Specified Foreign Financial Assets with their annual U.S. Income Tax Return
  • FATCA reporting requirements for financial institutions overseas mandates them to disclose information about U.S. citizens who hold accounts overseas

Form 8938 is similar to the FBAR in many ways. However, it has higher reporting thresholds and requires you to disclose certain “non-account” assets such as:

  • Business and trust ownership
  • Certain contractual investments with foreign parties

FATCA reporting deadline

As Form 8938 is filed with your U.S. income tax return, due dates applicable to Form 1040 apply. Automatic extensions for expats living abroad or additional extensions to October 15 can provide more time to collect needed information from foreign financial institutions and determine your filing requirements.

You can always see up-to-date FATCA declaration deadlines on our expat tax deadlines page.

Who files? FATCA Form 8938 filing thresholds

Who is subject to FATCA reporting? The filing thresholds differ depending on where you lived during the tax year.

If you live within the U.S. the entire tax year, you must file Form 8938 if the value of your reportable foreign assets exceeds either of these levels:

  • More than $50,000 (or $100,000 if married filing jointly) at the end of the year, or
  • More than $75,000 (or $150,000 if married filing jointly) at any time in the year

Expats living abroad have an increased reporting threshold. You don’t need to complete this form unless your foreign assets exceed either:

  • $200,000 (or $400,000 if married filing jointly) at the end of the year, or
  • $300,000 (or $600,000 if married filing jointly) at any time during the year

FATCA financial institution reporting

Many foreign financial institutions must report their U.S. citizen and resident clients’ accounts and if you’re an expat who hasn’t been filing FATCA information, that could affect you as you might face penalties and interest.

Ready to file FACTA Form 8938? Whether you file your expat taxes yourself with our online DIY expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.

FBAR filing requirements

The Report of Foreign Bank and Financial Accounts, or “FBAR” serves many of the same purposes Form 8938 does, with a few differences. A main one is that the FBAR goes to the Financial Crimes and Enforcement Network of the U.S. Treasury Department instead of the IRS. The FBAR came into existence in the Bank Secrecy Act of 1970 (BSA). Its purpose was, and still is, to prevent U.S. citizens from hiding assets overseas with the intent to commit tax evasion and money laundering.

By law, you must file FinCEN Form 114 if both of the following are true:

  • You’re a U.S. citizen, resident taxpayer or domestic business entity
  • You own, control, or have signature authority over foreign bank and financial accounts with a combined value over $10,000

If you were thinking of writing it off or ignoring your reporting obligation, beware: The penalties for willfully not filing can be $100,000 or more.

FBAR filing deadline 2023

The FBAR is filed separately from your tax return and does not go to the IRS. The FBAR deadline is the same as your income tax deadline, with an automatic extension to October 15 available.

You can always see up-to-date FBAR reporting deadlines on our expat tax deadlines page.

Who files? FinCEN Form 114 filing thresholds

You may be required to file an FBAR if you’re A U.S. citizen or green card holder using personal or business foreign accounts for everyday activities

The reporting requirement covers many types of foreign accounts maintained outside of the United States, including:

  • Bank accounts
  • Securities accounts
  • Certain foreign retirement arrangements

The FBAR filing requirement isn’t new, but expats often overlook it. Recent international enforcement efforts have raised awareness of the requirement. Don’t worry, though — your FBAR is only an informational document. No additional tax will be added. However, penalties can be levied if you don’t file or file late.

Need to file FinCEN Form 114 (FBAR)? H&R Block makes it simple to file your U.S. taxes and FBAR together.

Not sure if you should file FBAR vs. FATCA Form 8938? The experts at H&R Block are here to help.

Confused whether you should file an FBAR, FATCA declaration, or both? Don’t go it alone — your H&R Block tax advisor will know exactly what to do with your specific situation. Ready to file?

Get started with H&R Block’s Expat Tax Services today.

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U.S./Canada Dual Citizenship Taxes: 5 Things to Know https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/u-s-canada-dual-citizenship-taxes-5-things-you-should-know/ https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/u-s-canada-dual-citizenship-taxes-5-things-you-should-know/#respond Tue, 28 Mar 2023 16:21:13 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=282 If you have U.S./Canada dual citizenship, taxes can be complicated. Here are five things you should know before tax season comes around.

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As a U.S./Canada dual citizen, taxes can get tricky — dual citizens have few more tax and financial requirements than the typical resident. These requirements can affect not only taxes on your wages, but also taxes on your Canadian investments, pensions, and properties.

To help make things less confusing, we’ve addressed some common questions and concerns and distilled them into five things you should know about dual citizenship taxes for U.S. citizens living in Canada.

Not a dual citizen but an American citizen living in Canada? Learn more about U.S. expat taxes in Canada. Ready to file your U.S. tax return? Get started now.

1. Yes, U.S./Canada dual citizens file U.S. taxes

A common question we hear is, “do U.S. dual citizens in Canada have to file U.S. taxes?”

Yes, if you are a citizen or resident alien of the United States, you have a U.S. tax obligation, even if you’re a dual citizen of the U.S. and Canada.

The U.S. is one of two countries in the world that taxes based on citizenship, not place of residency. That means it doesn’t matter where you call home — if you’re a U.S. citizen, you have a tax obligation. This is true even if you earn no income in the U.S., or if you are a U.S./Canada commuter.

You should know the Canadian tax year is the same as the U.S. tax year, but the filing deadline is different. The U.S. tax year starts January 1 and ends December 31. Canadian taxes follow a January to December tax year. Canadian tax returns are due on April 30 for individuals and June 15 for self-employed taxpayers. In general, no extensions are allowed.

If you’re a dual citizen living in Canada, taxes go both ways — so you may end up having to file not only U.S. taxes but also Canadian taxes. Where you fall in Canada and U.S. tax brackets can influence decisions on how to file your U.S. taxes, so it’s important to understand the Canadian tax bands and taxation rates. To see up–to–date Canadian tax bands for 2022/2023* and the qualifications, head over to our tax guide for American citizens in Canada.

Start your U.S./Canada expat taxes now with an advisor or with our DIY online expat tax service.

2. Most dual citizens of the U.S. and Canada do not end up owing U.S. taxes because of the Foreign Earned Income Exclusion and the Foreign Tax Credit

Just because you have a U.S. tax obligation doesn’t mean you’ll end up owing anything at the end of the tax year — there are a few tools the U.S. provides to citizens abroad to ease its tax burden, including the Foreign Tax Credit and the Foreign Earned Income Exclusion.

The Foreign Earned Income Exclusion for U.S./Canada dual citizens

The Foreign Earned Income Exclusion (FEIE) is the most commonly used tool to lower U.S. taxes. It excludes your foreign earned income from U.S. income tax, therefore lowering (or eliminating) your U.S. tax liability. If you qualify, you’re able to exclude up to $120,000 of foreign earned income in 2023. You qualify if you live and work outside the U.S. and pass either the Bona Fide Residency test or the Physical Presence Test.

For example, say you’re a dual citizen who was born in the U.S., now lives and works in Toronto, and has a salary of $105,000. You would be able to exclude all that income from your U.S. taxes, lowing your U.S. tax obligation to $0.

The Foreign Tax Credit for U.S. citizens living in Canada

Another important tool for lowering your U.S. tax obligation is the Foreign Tax Credit (FTC). The FTC gives you a dollar-for-dollar reduction of your U.S. tax liability per Canadian taxes paid.

Get started on your U.S. taxes now.

3. Your Canadian pensions and tax-free investments may be treated differently in the U.S., even if you’re a U.S./Canada dual citizen

As it turns out, many of the tax-free investment accounts you own in Canada are probably not tax-free in the United States. For example, if you own a Registered Education Savings Plan (RESP), a Canadian Tax-Free Savings Account (TFSA), or a Registered Disability Savings Plan (RDSP), your earnings are subject to U.S. taxes, and you may need to report your account as a foreign grantor trust. In Canada, those investments are allowed to grow tax-free.

There is good news — thanks to the U.S./Canada tax treaty, your Canadian pensions and certain retirement accounts may qualify for special treatment.

The Canada/U.S. tax treaty, U.S. taxes, and your Canadian pensions explained

The U.S. has entered into tax treaties with more than 50 countries around the world. Among other things, they serve to clarify what income is taxable and therefore affect whether or not you can take a tax credit, tax exemption, or qualify for a reduced tax rate.

An important feature of the Canada/U.S. tax treaty is the specifications on how Canadian retirement plans and pensions are treated by the U.S.

Additionally, you’re almost always allowed to defer the U.S. tax on undistributed earnings from a Canadian Registered Retirement Savings Plan (RRSP) or Canadian Registered Retirement Income Fund (RRIF). However, while these kinds of contributions may also be tax deferred, the RRSP and RRIF are still subject to FBAR and FATCA reporting.

You also might need to report your Canadian retirement and pension on Form 1040, but when you file with an H&R Block Expat Tax Advisor, they’ll take care of all that for you.

Get started with an Expat Tax Advisor now.

4. U.S./Canada dual citizens (and Accidental Americans) can catch up on U.S. taxes with Offshore Streamlined Compliance Procedures

In some cases, Canadians will find out that they’re “Accidental Americans.” These dual citizens aren’t aware they have a U.S. tax obligation because they’ve lived and worked in Canada their entire lives. They may have been born in the U.S. while their Canadian parents were employed there, or they may have one U.S. parent. It’s important to understand if you were born in the U.S. or have a U.S. parent, you may be considered a dual citizen of Canada and the U.S.

If you are a dual citizen living in Canada and have never filed a U.S. tax return, there’s good news: You may be able to get caught up without being penalized. The IRS is pretty understanding when it comes to not filing because you honestly didn’t know you had to, and they have a program to help you get caught up — Streamlined Foreign Offshore Procedures — which the Expat Tax Advisors here at H&R Block can happily help you with.

Streamlined Foreign Offshore Procedures helps U.S. dual citizens in Canada (as well as elsewhere in the world) get compliant with prior year filings while helping reduce penalties. To qualify, you must:

  1. Have lived in a foreign country for at least 330 days during one of the last three years and not maintained a U.S. abode.
  2. Confirm that your failure to file U.S. tax returns and FBAR was not willful.

To catch up on past returns, get started with an Expat Tax Advisor now.

5. Dual U.S. citizens living in Canada may have financial reporting obligations in addition to filing U.S. taxes

As a U.S. dual citizen in Canada, filing your U.S. taxes may not be the end of your paperwork — if you have a Canadian bank account, you may also have to file your Foreign Bank Account Report (FBAR) and FATCA Form 8938.

The U.S. enacted the Foreign Account Tax Compliance Act (FATCA) to increase transparency of U.S. citizens with foreign bank accounts, and your FBAR serves a similar purpose. One difference between the two is you submit Form 8938 to the IRS while you submit your FBAR with FinCEN, the U.S. Treasury Department’s Financial Crimes and Enforcement Network.

If you’re confused about your FBAR and FATCA filing requirements, it’s best to leave your U.S. expat taxes to seasoned pros who will dig into your specific tax situation to find all your filing requirements.

Have dual citizenship in the U.S. and Canada? H&R Block Expat Tax Services is here to help with your taxes.

Filing taxes in one country is enough to give anyone a headache, and it only gets more complicated for dual citizens of the U.S. and Canada. But no matter your situation, we’ve got a tax solution for you — whether you want to be in the driver’s seat with our DIY online expat tax service designed for U.S. citizens abroad or let one of our experienced Tax Advisors take the wheel. Head on over to our Ways to File page to choose your journey and get started.

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Guide to Filing an FBAR from Canada https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/guide-to-filing-an-fbar-from-canada/ https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/guide-to-filing-an-fbar-from-canada/#respond Tue, 08 Nov 2022 15:10:56 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=355 Need to file an FBAR from Canada? Learn how with the expat tax experts at H&R Block.

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As a U.S. citizen living and working in Canada, you may have financial reporting obligations in addition to filing U.S. taxes. One of these obligations is filing what’s commonly known as a Foreign Bank Account Report, or an FBAR (the form you actually file is FinCEN Form 114).

Below, we’ll explain the basics of what the FBAR is, which Americans in Canada need to file an FBAR, and how to file an FBAR from Canada. Ready to file? Get started now!

Who in Canada must file FinCEN Form 114 (the FBAR)?

FinCEN Form 114 (the FBAR) is formerly called the Report of Foreign Bank and Financial Accounts. It exists to help the U.S. government be sure Americans in Canada (and elsewhere in the world) are being honest about their worldwide income and assets. If you qualify, you submit it yearly.

Who in Canada must file FinCEN Form 114? You must submit FinCEN Form 114 if you’re a U.S. citizen or Green Card holder and you’ve held a combined $10,000 or more in non-U.S. accounts at any one time in the tax year. This includes Accidental Americans and U.S./Canada dual citizens.

So, if you’re a U.S. citizen and have $9,000 in a Quebec checking account and another $9,000 in a foreign pension or a Canadian Tax-Free Savings Account (TFSA), you’d file an FBAR even though each account held under $10,000.

One question we hear from our clients in Canada is “Can I file an FBAR myself?” The answer is yes, even if you live in Canada you can still file an FBAR yourself online.

You can do this by using either FinCEN’s BSA e-filing system (no help available if needed) or you can simply add on an FBAR to your expat tax package and get it all done in one go.

How to file an FBAR and expat taxes together while in Canada

If you need to file both your U.S. taxes and your FBAR from Canada, then choose to file your FBAR and expat taxes together. These are the FBAR instructions to file with your taxes:

  1. Head over to our Ways to File page, choose to file taxes yourself or with an advisor, register online and complete your tax organizer.
    H&R Block makes it simple to file your expat taxes and FBAR together from Canada. After you choose to either file yourself or file with an advisor, you’ll be able to register an account. From there, you’ll complete your personal Tax Interview. This is where you provide information about your tax and financial situation, including information regarding your FBAR. After you have recorded all your information, you’ll get a personalized checklist of documents to upload according to your specific situation.
  2. We’ll assign you the right advisor for your situation (if you choose to file with an advisor)
    If you choose to file with an advisor, we will match you with one well-versed in U.S./Canada expat taxes. Your advisor will review your documents and FBAR and begin your return and FBAR submission.
  3. We prepare your U.S. tax return and FBAR
    Even though you’re currently living in Canada, you can trust H&R Block Expat Tax Services for all the following:
    • Federal tax preparation and filing
    • State tax return preparation and filing
    • FBAR filing (Report of Foreign Bank and Financial Accounts)
    • Past-due FBAR and tax returns from prior years, including Streamlined Compliance filings
    • Free extension filing
    • H&R Block’s 100% Accuracy Guarantee
  4. Pay for and review the FBAR and return.
    When your FBAR and tax return are completed, you’ll see your FBAR filing cost and be asked for payment via your client portal. Know that protecting your information is important to us — we maintain the physical, electronic and procedural safeguards to protect the information you submit to us.
    After you pay, your H&R Block Expat Tax Advisor can walk you through your FBAR and return, answer your questions and offer relevant tax savings tips for next year.
  5. We file your return with the IRS and FBAR with FinCEN.
    Finally, we’ll file your completed return with the IRS and FBAR with FinCEN. After filing, your tax return and FBAR will be stored in your secure online account, where it will be safe and easy to access, whenever you need.

Ready to get started? Head on over to our Expat Tax page to begin.

FBAR (FinCEN 114) filing requirements and due date

Regardless if you live in Canada, your FBAR due date for the calendar year you’re reporting is the same as your U.S. tax filing deadline, but you can always see up-to-date deadlines on our expat tax deadline page. If you’re required to file an FBAR, you must file one every year.

FBAR requirements are pretty detailed, so have these documents and information handy for a smooth submission process:

  • Legal name on the foreign account(s)
  • Type of account
  • The name and address of the institution or other person with whom the account is maintained
  • The maximum value (converted to USD using the end of year exchange rate) in each account during the FBAR reporting period
  • The number and/or other designation of the account

FBAR filing cost

Filing your FBAR with H&R Block Expat Tax Services will help save you time and won’t break the bank. Starting at $49, you can file an FBAR as an add-on to your DIY tax preparation.

When you add FinCEN Form 114 to your assisted tax return, FBAR filing costs $99 and includes the same attention to detail and 100% Accuracy Guarantee as our Expat Tax Prep Services.

What if I live in Canada and I’ve never filed an FBAR before?

Yikes! If you live in Canada and it turns out you’ve accidentally skipped filing your FBAR in years past, don’t panic. Submitting a Foreign Bank Account Report isn’t exactly an everyday occurrence, and it’s easy to overlook if you weren’t aware of compliance laws.

If you live in Canada and were honestly unaware of your FBAR filing requirement, the time to act is now. The IRS and FinCEN have a few disclosure programs that offer amnesty to Americans who have made an honest mistake in overlooking their filing obligations, including Streamlined Filing Compliance Procedures.

Streamlined compliance procedures allow Americans in Canada (and elsewhere in the world) get caught up on back taxes and delinquent FBARs with amnesty in order to avoid the large penalties that come from willfully not filing — penalties that can range anywhere from a few hundred dollars to a few hundred thousand dollars for serious offenders. All in all, it makes financial sense to be sure you’re up to date on all your reporting requirements.

If this all seems overwhelming, don’t stress — we’ve got your back. When catching up on multiple years of FBAR filings, choose to file your taxes and FBAR with an advisor, and our international tax advisors can help you decide on the best course of action for your unique situation.

Unsure how to file an FBAR from Canada or if you need to? H&R Block’s Expat Tax Services has your back.

Need help filing your FBAR or expat taxes from Canada? Don’t stress — taxes for expats in Canada are complicated, but H&R Block Expat Tax Services has your back. Get started and file your U.S. taxes and FBAR together.

You may be interested in:

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Should I Renounce My U.S. Citizenship? https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/should-i-renounce-my-u-s-citizenship/ https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/should-i-renounce-my-u-s-citizenship/#respond Wed, 26 Oct 2022 16:40:56 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=281 Find out if you should renounce your U.S. citizenship with tax advice from H&R Block. There are a few things you can do to simplify your tax situation.

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If you’re and American living in Canada, you do have other options to consider to simplify your tax situation and ease the pain. Check out what you can do to make sure there are no surprises at tax time.

The additional tax compliance challenges faced by Americans living abroad have led many to begin considering whether it still makes sense to keep their U.S. citizenship status. If you have been considering this approach, the permanence of the decision will likely leave you wondering whether it is really the only solution.

You do have another option. Simplify… The U.S. tax system has benefits in place that are designed to protect you from “double taxation.” But the system is imperfect and there are certain investments you will want to avoid. Here are a few things you can do to make your continued U.S. tax obligations as painless as possible:

  1. Consolidate your foreign accounts. Having multiple checking and savings accounts only increases your foreign account reporting obligations and the cost of your U.S. tax return.
  2. Avoid mutual funds, unit trusts, and similar investments set up in Canada at all costs. High U.S. taxes on this type of investment will generally prevent you from reaching your financial goals.
  3. Weigh the advantages and disadvantages of closing any trust TFSAs (Tax Free Savings Accounts) or RESPs (Registered Education Savings Plans). These arrangements do not qualify for the same tax benefits in the U.S. as they do in Canada and will increase the cost of your U.S. tax return.
  4. Maximize the opportunities you have to contribute to Canadian retirement plans. Registered pensions in Canada are protected by a tax treaty with Canada and create a great opportunity for U.S. taxpayers to save for their retirement without the pain that fellow expats in other countries encounter.
  5. Make sure any independent business activities are structured with U.S. tax in mind. With careful planning, painful tax implications can be avoided and tax savings can actually be created.

While you may never be able to avoid the annual tax filing requirement in the U.S. unless you abandon your citizenship or green card, you can at least make sure there are no surprises come tax time. Contact your H&R Block Expat Tax Advisor today.

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The Basics of Streamlined Filing Compliance Procedures and Delinquent FBAR Penalties https://www.hrblock.com/expat-tax-preparation/resource-center/filing/tax-responsibilities-and-penalties/catching-up-what-you-need-to-know-about-streamlined-filing-compliance-procedures-and-delinquent-fbar-penalties/ https://www.hrblock.com/expat-tax-preparation/resource-center/filing/tax-responsibilities-and-penalties/catching-up-what-you-need-to-know-about-streamlined-filing-compliance-procedures-and-delinquent-fbar-penalties/#respond Tue, 25 Oct 2022 18:31:51 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=135 Behind on your expat taxes? You have options. Learn about Streamlined Filing Compliance Procedures and penalties for late FBARs and tax filings with the tax experts at H&R Block.

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For most Americans who pack up and move overseas, selling your belongings and saying goodbye to family and friends means you’ve left behind your American life — which can put you in a sticky situation when it comes to U.S. taxes. You see, just because you relocate to a new country doesn’t mean you get to leave behind your U.S. tax and reporting responsibilities. As long as you’re considered a U.S. citizen, you have a tax obligation to Uncle Sam.

But there’s good news! the IRS Streamlined Filing Compliance Procedures are there to help you get caught up — penalty free (as long as you qualify).

If you’re an American living abroad and haven’t filed your annual U.S. income tax returns for several years — or maybe ever — since moving abroad, H&R Block Expat Tax Services can help. Understanding filing requirements in the U.S. and your host country can be overwhelming, but we’ll get you back on track.

What to do if you’re a U.S. citizen abroad and have never filed U.S. taxes while overseas

It’s common for U.S. expats to think they only have to file taxes for the country they live in now, causing them to accidentally overlook their U.S. tax obligations. In the face of honest mistakes, the IRS has historically shown lenience. However, you could face serious penalties for things like failure to file your foreign bank account reports (FBAR).

If you’re a U.S. citizen abroad and have never filed taxes while you’ve lived overseas, don’t panic — we’re here to help you through your options. You’ll have to get caught up on your U.S. expat taxes, and you’ll also have to get caught up on your FBAR.

You can do this with the IRS’ Streamlined Filing Compliance Procedures and Delinquent FBAR and Information Report Procedures. It can be a bit confusing, so if you’re unsure about your responsibilities or how to file, let us do the heavy lifting for you with our Expat Tax Preparation Services.

Catch up on past taxes with Streamlined Foreign Offshore Procedures

Offshore Streamlined Filing Compliance Procedures are an option for U.S. taxpayers abroad who need to get caught up on expat taxes. The program supplemented the now-defunct Offshore Voluntary Disclosure Program and helps U.S. expats who were unaware of their obligations catch up with prior year filings while minimizing penalties.

To qualify for the Offshore Streamlined Filing Compliance Procedures, you must:

  1. Have lived in a foreign country for at least 330 days during one of the last three years and not maintained a U.S. abode.
  2. Confirm that your failure to file U.S. tax returns and FBAR was due to an honest misunderstanding of your responsibilities.

If you do qualify for Streamlined Filing Compliance Procedures, you will need to:

  1. File income tax returns for the prior three delinquent tax years.
  2. File an FBAR (FinCEN Form 114) for the prior six tax years.
  3. Complete a statement of explanation detailing why your tax returns and FBAR weren’t filed.
  4. Pay the tax and interest due for the last three years.

If you don’t qualify for Streamlined Filing Compliance Procedures:

Don’t qualify for streamlined filing? You still have options to try and get caught up with minimal penalties:

  • IRS-Criminal Investigation Voluntary Disclosure Program
  • Delinquent international information return submission procedures

If it sounds like a little too much for you, we’re here to take over. Simply create an account and upload your documents to your tax portal. Our seasoned Tax Advisors will look over your documents and help you with next steps.

Avoid FBAR penalties with Delinquent FBAR and Information Report Procedures

Not only do you have to file U.S. taxes each year, but you may also have to report money in foreign banks with a Foreign Bank Account Report (FBAR). The actual form you’d file is FinCEN Form 114, and you’ll have to file it if the combined balance of all your foreign accounts totals more than $10,000 at any point during the calendar year.

If you’ve been filing your tax returns annually and reporting your income but were unaware of your foreign bank account reporting requirements and the associated FBAR penalties, or other informational reports, you might be able to claim amnesty with a different procedure.

Delinquent FBAR or International Information Return Procedures allow you to file and amend your FBAR and return to include omitted information. A detailed explanation is required with each report to make sure your failure to file was an honest mistake.

Need help with Streamlined Filing Procedures or a delinquent FBAR? Start now with H&R Block’s Expat Tax Prep Services

If you’re a U.S. taxpayer, and you honestly made the mistake of not fulfilling your U.S. tax and FBAR duties, H&R Block U.S. Expat Tax Services can help. While your process does require a few more steps, we’ll help you tackle them all. Want help? Get started now and we’ll take over from there.

Warning! The programs listed above are for U.S. taxpayers who have honestly overlooked their past U.S. tax responsibilities. Severe civil and criminal disciplinary action and penalties, such as FBAR penalties, can be assessed against taxpayers who have willfully avoided U.S. tax. H&R Block does not provide legal services. If you are concerned that your failure to file was willful, consult an attorney.

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2024 Tax Deadlines for Expats https://www.hrblock.com/expat-tax-preparation/resource-center/filing/deadlines-and-extensions/tax-deadlines-for-expats/ https://www.hrblock.com/expat-tax-preparation/resource-center/filing/deadlines-and-extensions/tax-deadlines-for-expats/#respond Tue, 25 Oct 2022 18:25:26 +0000 https://www.hrblock.com/expat-tax-preparation/resource-center/?p=127 Find out what the Expat tax filing deadline is this year. The tax experts at H&R Block breakdown other deadlines and extensions for U.S. Expats.

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Just like most taxpayers in the United States are required to file U.S. tax returns and pay any taxes due by April 15 (unless an extension applies), expats living and working in another country as a U.S. citizen are also required to file.

However, if you’re living abroad, the rules for expat tax filing and deadlines are a little different.

Expat tax deadlines for 2024

Typically, expat tax deadlines are consistent each year, with the exception of 2020 and the Coronavirus extensions. Review coronavirus (COVID-19) tax impacts for U.S. expats living abroad.

The U.S. reports on a calendar-year basis, meaning you’re taxed on income on a January 1 – December 31 basis. Your expat tax deadlines are as follows:

Filing deadlineApril 15, 2024
Filing deadline for expatsJune 15, 2024
Filing deadline with extensionOctober 15, 2024
Deadline to pay tax dueApril 15, 2024
FBAR deadline (FinCEN Form 114)April 15, 2024 with an automatic extension to October 15, 2024

Do I have to pay U.S. taxes if I live abroad?

Expats are required to file U.S. tax returns each year, but sometimes tax benefits (like the Foreign Earned Income Exclusion and Foreign Tax Credit) available to them result in no U.S. taxes owed. However, if any of the following situations apply to you, it’s possible that you may still owe U.S. taxes.

  • You live and work in a country with lower tax rates than the U.S.
  • You’re not taxed on your foreign investments, or
  • You still receive income from U.S. sources

Estimated tax payment deadlines for U.S. citizens overseas

If you’re living outside the U.S. and usually owe U.S. taxes, you may need to make quarterly estimated tax payments to the IRS. An expat tax expert can help you figure those quarterly payments so you can avoid end-of-year penalties.

Quarterly Income and Expat Self Employment Tax Deadlines

1st installment quarterly income and self-employment taxesApril 15, 2024
2nd installment quarterly income and self-employment taxesJune 17, 2024
3rd installment quarterly income and self-employment taxesSeptember 16, 2024
4th installment quarterly income and self-employment taxesJanuary 15, 2025

Tax extensions for expats

Your U.S. tax information is still reported on a calendar-year basis even if you are living in a country that taxes on a fiscal year rather than a calendar year basis (the United Kingdom and Australia, for example).

If you’re worried about getting your taxes done by the deadline, requesting an extension can give you more time to gather information before the end of the tax year of the country where you live. H&R Block’s Expat Tax Services is here to help you with tax extensions — simply choose to file with an Expat Tax Advisor and they’ll handle your paperwork for you.

FBAR filing deadline

The FBAR filing deadline is the due date of your income tax return, though FinCEN has provided a regulatory extension to October 15th for most filers.

Visit the FBAR overview page to learn more.

Get your expat taxes done on time with H&R Block’s Expat Tax Services

No matter if you’re early, on-time, or behind, we’ve got a tax solution for you — whether you want to be in the driver’s seat with our DIY online expat tax service designed for U.S. citizens abroad or prefer to let one of our experienced tax advisors take the wheel.

Ready to get the tax season over with? Start the process with virtual Expat Tax Preparation from H&R Block today!

The post 2024 Tax Deadlines for Expats appeared first on H&R Block®.

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