U.S. Taxes

U.S. Taxes

U.S. TAX Returns

The guidance you need to get it done right, guaranteed.

Are you a Canadian citizen having income from the U.S.?

Are you an American Citizen living in Canada?

Do you own investments in the U.S.?

Did you win money in a Casino or a lottery in the U.S.?

If yes, then you will be required to file U.S. taxes.

Softron tax has U.S. tax experts on their team who can help you with your U.S. tax needs. We will make sure that all your tax returns are filed on time and you are not subject to any kind of double taxation.

If you are a U.S. citizen who is a resident in Canada, then you must file two returns each year, declaring your worldwide income on each: a Canadian return because you live here, and a U.S. return because you are a U.S. citizen.

According to tax treaties between Canada & U.S. there are certain deductions and credits which will save you from double taxation. Softron can help you in preparing both the returns so that you will pay the least taxes.

Here are some of the frequently asked questions.

Frequently Asked Questions

I am a U.S. citizen working for a U.S. firm in Canada. Is any part of my wages or expenses tax deductible?

U.S. citizens are taxed on their worldwide income, no matter where they work. Some taxpayers may qualify for the foreign earned income exclusion and some other deductions, if their principal residence is in Canada and  they lived in Canada for at least 330 days. If the taxpayer is temporarily away from his or her principal residence in the United States on business (less than a year), the taxpayer may qualify to deduct away from home expenses (for travel, meals, and lodging ) but would not qualify for the foreign earned income exclusion.

I am a U.S. citizen living and working in Canada. Can I have a tax credit on my U.S. taxes for the taxes I pay to the foreign country?

The foreign tax credit is intended to relieve U.S. taxpayers of the double tax burden when their Canadian income is taxed by both the United States and Canada. Generally, only income taxes paid in Canada qualify for the foreign tax credit. You can choose to take the amount of any qualified foreign taxes paid  during the year as a foreign tax credit or as an itemized deduction.

To choose the foreign tax credit you must generally complete Form 1116 (Foreign Tax Credit) and attach it to your Form 1040.

You may not take either a credit or a deduction for taxes paid on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. There is no double taxation in this situation because the income is not subject to U.S. tax.

I am an American citizen residing in Canada. I receive U. S. social security benefits. Do I have to pay tax on it to both countries?

Under Canada – U.S. tax treaty, the Canadian and US governments agreed to a residence-based system under which social security benefits are taxable exclusively in the country where the recipient resides. As a result, there is no tax on US Social Security benefits in US for you.

Visit your nearest Softron location today or call 905-273-4444 to book an appointment.

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