When you move out of America, we all hope for a great life ahead and especially the fact we no longer become obliged to pay so many taxes in the country. But do you know that there is one tax requirement that is never going to leave you no matter where you go? Yes, we are talking about the expat tax CPA in Canada.
If you’re an American citizen, you are forever bound to the obligation of filing US expat taxes with the federal government every year. But as the whole matter isn’t as simple as it may seem, today we have decided to inform you about the basics which include all the important dates and provisions you need to know.
But before we get to that, you need to know that US expat taxes require you to file your regular income tax return along with the additional binding obligation of filing an informational return on your assets held in foreign bank accounts as well.
So, now that you know what you will be paying for, below are the two most important points that you must keep in mind being an American citizen in Canada.
Due Dates of Filing & Payment
As many of you would already know that the US tax year is January 1 through December 31. So, every year the US citizens living abroad are required to file and pay their expat taxes by keeping the following dates in mind.
- April 15th – It is the official filing deadline for U.S. individual income tax returns, but fortunately expats get their automatic extension until June 15th. However, at the same time you must make sure that this extension relates to filing only and you are bound to pay your taxes on time which are usually due by April 15th. If you are late then you are going to be charged with interest.
- October 15th – It is the last due date for US income taxes (if you filed for an extension), and FBAR returns.
In case if your due date is on a holiday or falls over the weekend then the next Monday becomes your final date automatically.
What Are The Provisions Allowed On US Expat Income Tax?
The US also requires you to report your worldwide income on your tax return. As all income is usually subjected to taxation there are still some provisions that you can take advantage of.
- The first is Foreign Earned Income Exclusion which is based on allowing you to exclude up to $105,900 of foreign-earned income from your US taxes for the year 2019 and up to $107,600 from your 2020 US taxes.
- Second on the list is Foreign Tax Credit that allows you to offset the taxes you may have paid to Canada against your US income taxes,
- Last but not the least, Foreign Housing Exclusion lets you exclude certain household expenses which only take place because of you living abroad.
For more assistance, you can always hire experts in the matter like Protax Consulting Services because after all it’s the matter of your hard earned money!