Obviously if you have previously filed 1040, you had tax to pay, so 8891 and FBAR are required for those years.
3 and 6 refers to those who have never filed 1040.
Forget the "persuant" stuff. just more account padding
Need some advice for an American in Canada
Moderator: Mark T Serbinski CA CPA
Great thanks!
Any suggestions on a decent do it yourself tax software that would be suitable for IRS returns for Americans living and working in Canada? I thought for 2011 I might take a crack at filing my wife's entire return! Now I'm getting brave, lol!
I went from having absolutely zero knowledge about any of this 1 week ago to a learning curve that has been exponential, and now have a pretty good understanding of FBAR, 1040x, 1040 sched. B and 8891 - at least for my wife's current scenario....this of course by navigating through the IRS website, using the search function on this forum and all of your help.
At this stage in our life her scenario is pretty straight forward and I believe not overly complicated for tax purposes:
-income only in Canada - wage income
-a few joint bank accounts - checking and savings
-a spousal RRSP
-1 daughter with 1 on the way, so CCTB, UCCB, daycare expenses, gymnastics, swimming etc.
Of course if things start to go down the toilet or my comfort level drops with the preparation I do have a new accountant who knows the IRS and CRA system, so I could go to them.
Any suggestions on a decent do it yourself tax software that would be suitable for IRS returns for Americans living and working in Canada? I thought for 2011 I might take a crack at filing my wife's entire return! Now I'm getting brave, lol!
I went from having absolutely zero knowledge about any of this 1 week ago to a learning curve that has been exponential, and now have a pretty good understanding of FBAR, 1040x, 1040 sched. B and 8891 - at least for my wife's current scenario....this of course by navigating through the IRS website, using the search function on this forum and all of your help.
At this stage in our life her scenario is pretty straight forward and I believe not overly complicated for tax purposes:
-income only in Canada - wage income
-a few joint bank accounts - checking and savings
-a spousal RRSP
-1 daughter with 1 on the way, so CCTB, UCCB, daycare expenses, gymnastics, swimming etc.
Of course if things start to go down the toilet or my comfort level drops with the preparation I do have a new accountant who knows the IRS and CRA system, so I could go to them.
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jalways747
- Posts: 31
- Joined: Thu Feb 02, 2012 3:50 pm
I use TurboTax to do my US taxes. I do the deluxe version. It can handle reporting of RRSPs, foreign tax credits, etc. I do report Universal Childcare Benefit, but not Child Tax Benefit. And I don't report children's sports expenses to the IRS, just the CRA. I like how Turbotax walks me through the process.
jalways747,
I wouldn't be able to post the information of the accountant I have used in the past unless they gave me permission - I'd have to ask...
Depending on your situation have you considered something like H&R Block or KPMG?
I recently spoke to someone from a local H&R block who has been filing IRS and CRA returns for US citizens in Canada for a number of years, she seemed to be quite knowledgeable of both systems. For my wife's scenario I would feel comfortable having her file the complete 2011 IRS return if the need arose.
Thanks for the info eortland. I haven't yet decided if I'm going to use software for my wifes 2011 return. At this point I may be more comfortable working through things with pencil and paper. I have my wifes previous 1040's and 2555-ez's that I can cross reference to the respective CRA returns and work my way through that way, there is also a ton of good info on this forum. If I start to screw things up I can pack up my folder and bring everything to the accountant, lol! Even if I did get through all of it, I would likely have a professional look everything over for the first couple of returns that I prepare on my own. However, if I do decide to use software I will look into TurboTax, who knows, there may even be less chance of me messing it up!
Do you get a child tax credit from the IRS?
I wouldn't be able to post the information of the accountant I have used in the past unless they gave me permission - I'd have to ask...
Depending on your situation have you considered something like H&R Block or KPMG?
I recently spoke to someone from a local H&R block who has been filing IRS and CRA returns for US citizens in Canada for a number of years, she seemed to be quite knowledgeable of both systems. For my wife's scenario I would feel comfortable having her file the complete 2011 IRS return if the need arose.
Thanks for the info eortland. I haven't yet decided if I'm going to use software for my wifes 2011 return. At this point I may be more comfortable working through things with pencil and paper. I have my wifes previous 1040's and 2555-ez's that I can cross reference to the respective CRA returns and work my way through that way, there is also a ton of good info on this forum. If I start to screw things up I can pack up my folder and bring everything to the accountant, lol! Even if I did get through all of it, I would likely have a professional look everything over for the first couple of returns that I prepare on my own. However, if I do decide to use software I will look into TurboTax, who knows, there may even be less chance of me messing it up!
Do you get a child tax credit from the IRS?
Keep in mind that you don't need to buy TurboTax software, you can just go to the website and work out your taxes online. If you're happy with it, you pay and print. If not, you can choose to do it some other way.
Yes I do get child tax credit from the IRS for my two kids, but it's only because we stopped doing the 2555 and switched to 1116, which involves reporting our income and taking foreign tax credits. Never again will I sit with pencil and paper and try to do that form by myself! Using software has made tax time much less stressful.
Yes I do get child tax credit from the IRS for my two kids, but it's only because we stopped doing the 2555 and switched to 1116, which involves reporting our income and taking foreign tax credits. Never again will I sit with pencil and paper and try to do that form by myself! Using software has made tax time much less stressful.
Thanks nelsona! Im guessing H&R Block has a tendency to mess things up and over charge for it......I have never used them before so I wasn't aware..
eortlund thanks! I will have a look at form 1116....so does the IRS actually give you money back for your kids or is the credit used to reduce your taxable income bracket? I'm interested in this..
eortlund thanks! I will have a look at form 1116....so does the IRS actually give you money back for your kids or is the credit used to reduce your taxable income bracket? I'm interested in this..
It's called the Additional Child Tax Credit. I use the 1040 to report our Canadian income in US dollars, I use 1116 to take foreign tax credits. This reduces our US tax bill to $0. Then we get $1000 per child in additional child tax credits. There have been years when we have been eligible for other refunds offered, like the Making Work Pay credit. Honestly, I don't know why the IRS allows this, but I figure I will take any $ they want to give me, especially given the onerous reporting requirements they put on expats.
Ughhhh, I guess my wife missed out on the Additional Child Tax Credit for 2009 and 2010 due to having form 2555 filed......oh well...
Aside from the ACTC, is there any other benefit to filling out 1116 vs 2555?
My wife's income has always been lower than the income exclusion so 2555 was used, not to mention, it appears to be a much easier form to fill out than 1116.
If I'm not mistaken you have have to wait a certain period of time if you switch to one form and then want to go back to the other?
Aside from the ACTC, is there any other benefit to filling out 1116 vs 2555?
My wife's income has always been lower than the income exclusion so 2555 was used, not to mention, it appears to be a much easier form to fill out than 1116.
If I'm not mistaken you have have to wait a certain period of time if you switch to one form and then want to go back to the other?
Thanks for that information eortlund! I will look at that closer for the 2011 return, in the meantime I am going to finish these FBAR and 8891's for back filing.
Question about calculating a balance (numbers for example purposes):
I have a balance of $1000.00 in a checking account at bank A, I then deposit $18,000 which was gift money from our wedding bringing the balance to $19,000 at bank A
2 days later the same 18,000 that was deposited into bank A is now transfered to a different bank - Bank B, via a draft and the balance of bank B is now 18,000 and bank A is back to $1000.00.
For reporting purposes, is bank A shown as having a high balance for the year of $19,000 as well as bank B having a high balance of $18,000?
OR,
Does bank A get reported as a high balance of $1000 and bank B reported as a high balance of $18,000?
The total amount of money that I had at any time is $19,000. But reporting the 2 banks with each of the highest balances would indicate that I had $37,000 which is not the case.....bank A only had the high balance for 2 days..I hope this question makes sense!
I wasn't sure if I would be under reporting Bank A by showing it as $1000, but the other way makes it look like I (my wife) has more money than she really does.
I think I may be confusing something here....
Question about calculating a balance (numbers for example purposes):
I have a balance of $1000.00 in a checking account at bank A, I then deposit $18,000 which was gift money from our wedding bringing the balance to $19,000 at bank A
2 days later the same 18,000 that was deposited into bank A is now transfered to a different bank - Bank B, via a draft and the balance of bank B is now 18,000 and bank A is back to $1000.00.
For reporting purposes, is bank A shown as having a high balance for the year of $19,000 as well as bank B having a high balance of $18,000?
OR,
Does bank A get reported as a high balance of $1000 and bank B reported as a high balance of $18,000?
The total amount of money that I had at any time is $19,000. But reporting the 2 banks with each of the highest balances would indicate that I had $37,000 which is not the case.....bank A only had the high balance for 2 days..I hope this question makes sense!
I wasn't sure if I would be under reporting Bank A by showing it as $1000, but the other way makes it look like I (my wife) has more money than she really does.
I think I may be confusing something here....
I just re-read the TDF 90-22.1 and it does say in box 15 of part III, "maximum value of account during calender year reported"
So, the max value of Bank A was $19,000 even if it was only for 2 days and the max value of Bank B was $18,000 even though it is the same money that was in Bank A. For the reporting purposes then, it looks like each bank is shown as 19000 and 18000 respectively as those amounts were technically the maximum value of the accounts, regardless if it was only for 2 days and it was the same $18,000 that was shifted from one account to another.
Is this correct?
So, the max value of Bank A was $19,000 even if it was only for 2 days and the max value of Bank B was $18,000 even though it is the same money that was in Bank A. For the reporting purposes then, it looks like each bank is shown as 19000 and 18000 respectively as those amounts were technically the maximum value of the accounts, regardless if it was only for 2 days and it was the same $18,000 that was shifted from one account to another.
Is this correct?