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Monday, February 10, 2014

If Americans living in Canada don't file annual tax returns, the executor must file them

I'm attaching a link to an article from that talks about the new arrangement whereby Canada will report Canadian bank accounts held by American citizens to the I.R.S. Click here to read this article for more detailed information about what will be reported, and what will not.

What does this have to do with estate planning, you ask? Quite a bit. American citizens who live anywhere in the world are supposed to file American income tax returns every year. However, I have met dozens of Americans living in Canada who don't file those returns, on the basis that they live exclusively in Canada, pay taxes in Canada, don't have any taxes to pay in the US, and don't see the need to file the American returns.

Logic aside, the I.R.S. wants those filed. If you pass away without having filed them, your executor is required by law to file them. All of them. This means that if you have lived in Canada for 20 years without filing the American returns, your executor will have to file them for the last 20 years. This means a lot more work for your executor and additional expense and delay for your estate. If your executor decides not to comply, that could mean personal liability for him or her.

If you are in this situation, I suggest that you talk to your accountant. Find out exactly what you have to file, and what the repercussions might be for you or your estate if you do not.

1 comment:

  1. Tax and financial planning services are very important services and that is why the demand for tax and financial planning services is so high. A person moving to Canada from USA for business, education or any other reasons, there are many things that can come his or her way and that is why professionals who take care of tax and financial planning services are very important. There are companies that provide tax and financial planning services to the people all over the country and one of the finest in the business is Cardinal Point Wealth Management. Cardinal Point Wealth Management has been quite successful in providing excellent US CAN be financial planning and American, Canadian financial planning services to the people.


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