Does my Canadian Wife need to file US taxes

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perrickd
Posts: 8
Joined: Mon May 13, 2019 9:36 pm

Does my Canadian Wife need to file US taxes

Post by perrickd »

Hello all,

I got married last year in 2019, I am a US Citizen and my Wife is a Canadian citizen. I need to file 2019 taxes in the US. Do I file as a Single? Or Married Filing Separately? If I choose Married filing Separately, it says my wife needs a SSN or ITIN.

Does that mean every year I would have to file Married Filing Separately/Jointly?

Thanks for the read and help.
stewak2
Posts: 109
Joined: Mon Sep 18, 2006 2:47 pm

Re: Does my Canadian Wife need to file US taxes

Post by stewak2 »

You would save money on US tax with MFJ, most likely, but if you are Canadian resident with primary US income that just lowers your CRA FTC and anything you save you'll just pay to CRA. Plus, do you want your wife on IRS radar? My wife totally refuses.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Does my Canadian Wife need to file US taxes

Post by nelsona »

Regardless if your spouse wants to file or not, YOU must file as Married (either jointly or separately). In which country do you now reside?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
perrickd
Posts: 8
Joined: Mon May 13, 2019 9:36 pm

Re: Does my Canadian Wife need to file US taxes

Post by perrickd »

I currently reside in the US. I “landed” in Canada Feb 3rd and will be receiving my PR card in 60 days, but I’m not necessarily moving until July.
perrickd
Posts: 8
Joined: Mon May 13, 2019 9:36 pm

Re: Does my Canadian Wife need to file US taxes

Post by perrickd »

stewak2 wrote:
> You would save money on US tax with MFJ, most likely, but if you are
> Canadian resident with primary US income that just lowers your CRA FTC and
> anything you save you'll just pay to CRA. Plus, do you want your wife on
> IRS radar? My wife totally refuses.

My wife does not want to be on IRS radar at all.
stewak2
Posts: 109
Joined: Mon Sep 18, 2006 2:47 pm

Re: Does my Canadian Wife need to file US taxes

Post by stewak2 »

Same. If you are going to reside in Canada, with US sourced income (a commuter?) I would do MFS. It won't cost you any more since Canadian taxes are going to be higher anyway. Adjust your US withholding accordingly.
If you will have Canadian source income, I'd defer to someone like Nelson on what works best.
You'll have a few other things to think about - don't open a TFSA, if you have an RESP for you kids, put it in your Canadian wife's name *only*.
Ron.Henderson
Posts: 81
Joined: Sun Jan 06, 2019 2:24 pm

Re: Does my Canadian Wife need to file US taxes

Post by Ron.Henderson »

Note that, in theory at least, neither RESPs nor TFSAs are reported to the IRS under FATCA. A US citizen in Canada is still free to take advantage of the Canadian tax benefits, while choosing not to report them to the IRS. (Dual citizens with no US assets are of course far better off not filing at all.)
stewak2
Posts: 109
Joined: Mon Sep 18, 2006 2:47 pm

Re: Does my Canadian Wife need to file US taxes

Post by stewak2 »

I've never heard anyone recommend that a dual citizen residing in Canada can have a TFSA and not file a 3520.
I would not risk it.
Ron.Henderson
Posts: 81
Joined: Sun Jan 06, 2019 2:24 pm

Re: Does my Canadian Wife need to file US taxes

Post by Ron.Henderson »

The point is simply that dual citizens are perfectly free to enjoy all the benefits of TFSA accounts provided they don't report them to the IRS. As registered accounts are not included in FATCA reporting, the only way the US will learn about them is via tax filing.

There's a fair bit of risk associated with 3520 (or 3520-A) forms - all the weird $10k penalties over the last year.
stewak2
Posts: 109
Joined: Mon Sep 18, 2006 2:47 pm

Re: Does my Canadian Wife need to file US taxes

Post by stewak2 »

Not reporting things to the IRS is generally a very bad idea.
Ron.Henderson
Posts: 81
Joined: Sun Jan 06, 2019 2:24 pm

Re: Does my Canadian Wife need to file US taxes

Post by Ron.Henderson »

Indeed, reporting nothing at all is safer and smarter than reporting something but not everything. Compliance may be necessary for dual citizens with cross-border financial or employment ties, but it's certainly not recommended for those who live and work exclusively in Canada. Fortunately the compliance rate is only about 10 percent. so not too many people are filing when they shouldn't.
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