3 Tax Questions from Dual US CDN Citizen Living in Canada

[jdies1983]

Hello,

I have 3 questions relating to my US and CDN returns. I am a dual citizen who lives in Canada, and I have filed faithfully US tax forms every year (including FBARs or whatever they call them now). I do have three questions to make sure I'm doing my taxes correctly:

1. I am a preacher in Canada who is paid by a Canadian church as well as several American churches to preach in Canada. I know about the 2555 income exclusion on the money paid by the American churches as well as the Social Security exemptions. My question is- if I go to preach in the United States for a week, and a church where I preached pays me (not negotiated in advance), do I treat this money (less than $1000) as US Source income and have to file an additional state income tax return or do I treat it like all my other money from US churches and put under the 2555 exclusion? If it is the former, do I have to pay Social Security on it? I know I wouldn't pay tax in the US on this income because I'm below the standard deduction, but I want to file correctly.

2. I am also an author. I currently self publish using a company based in the US. They send me a 1099 every year. Now up to this point I haven't made enough money for it to matter, but should I ever, which country gets the tax first, and which gets the foreign tax credit on the form?

3. I want to invest in Canada, but know the pitfalls of TFSA, mutual funds and PFICs, etc. Of all the investing choices, is investing directly one of the easier ways to avoid hours of paperwork for US taxes (i.e. if I do this, will I only have to fill out capital gains and investment forms with US)?

[nelsona]

1. It is US-sourced, so cannot be exempted under 2555.
If you are paid as a 1099, you will not pay SS tax on it. W-2, you would.

3. You are not permitted, as a Cdn resident, to have a US non-retirement investment account.