Alison's Money Rule

Uncle Sam Wants You!

Posted June 19, 2012
Originally Published June 12, 2012

Uncle Sam wants an annual report from Snowbirds and the American born

Your taxes are well behind you for another year, right?  Maybe not!  For tens of thousands of Americans living here not to mention Canadian snowbirds, Uncle Sam wants you --- to get in touch.

June 15^th is the deadline for US citizens to file a required tax return south of the border even if they have been in this country since infancy.

In the last year there was a rumble of panic among US ex-pats as the IRS started flexing its muscle by threatening to chase down and punish those who had fallen behind in their tax returns.  Many Americans in Canada don’t even realize they are required to file in the country of their birth.  Since then the IRS has relaxed their stance a bit but US citizens still need to comply.

According to H&R Block Canada, US citizens and green card holders (including those whose green card has expired) are required to file Form 1040 annually.  Go to http://www.irs.gov and search for Form 1040.

Those who paid taxes in Canada will receive a foreign tax credit on their US returns and if you are receiving CPP and or Old Age Security here they are exempt from US tax.

Anyone who kept a US home as a rental after moving to Canada, or has any other income south of 49, will have to declare it on the US return.

The big tax surprise for many Canadian snowbirds is a requirement to communicate with the IRS.  If you spent more than 121 days in the US in 2011 or a total of 183 days over the past three years, Uncle Sam is interested.

Filing IRS Form 8840 (the Closer Connection Exception Statement for Aliens) is an annual requirement.  You’ll be asked about your Canadian ties including passport, family, car registration, where you are registered to vote and even your religious affiliation.  Most snowbirds can demonstrate a closer connection to Canada than the US so nothing else is needed.

Again, go to http://www.irs.gov, search Form 8840 and mail it to the Department of the Treasury, IRS Centre, Austin, Texas, 73301-0215.

Taxes -- you can run but you can’t hide.

Sidebar

900,000 to 2.5 million – the estimate of Americans living in Canada.

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