US filing basics for Americans in Canada
Living in Canada does not terminate your U.S. federal income tax obligations. U.S. citizens, green-card holders, and certain long-term residents are taxed on worldwide income on a citizenship or residency basis, regardless of where the income is earned or where you reside. You generally must file Form 1040 (or 1040-SR) when gross income exceeds the annual IRS filing threshold, typically $15,000 to $30,000 or more depending on filing status, age, and dependency for recent tax years (exact amounts published in IRS Rev. Proc. documents and inflation-adjusted). Even if no tax is ultimately due after credits and exclusions, filing is usually required to claim benefits such as the Foreign Earned Income Exclusion (FEIE) under IRC §911 (up to $130,000 for tax year 2025 per IRS Rev. Proc. 2024-40) or the Foreign Tax Credit (FTC) for taxes paid to Canada authorities.
US tax treaty with Canada
The United States has an income tax treaty with Canada for many common issues, treaty articles must be applied to your facts.
Local considerations in Canada
Closest neighbor with high volume of cross-border commuters and snowbirds. RRSPs are generally respected under the US-Canada treaty (often treated favorably), but TFSAs are usually not (treated as foreign trusts with potential PFIC or grantor trust issues, requiring extra forms). Canadian payroll withholding does not satisfy US filing; many need to file both US 1040 and Canadian return, claiming FTC or treaty tie-breaker for residency. FBAR applies to Canadian accounts; large retiree population in places like Florida but living in Canada part-year triggers complex residency and filing rules.
Common services needed by expats in Canada
Most Americans abroad in Canada need help with at least one of the following core compliance areas, which frequently interact:
- US expat tax returns, Form 1040 with FEIE, FTC, treaty positions, and any required state returns.
- FBAR reporting, FinCEN Form 114 for foreign financial accounts exceeding $10,000 aggregate at any time during the year.
- Form 8938 (FATCA), IRS disclosure of specified foreign financial assets when thresholds are met.
- Streamlined catch-up filing, For eligible non-willful taxpayers with prior unfiled years.