If you’re an American expat living in Canada, you probably have questions about your U.S. tax responsibilities. Do you need to file U.S. taxes? Will you have to pay taxes in both Canada and the U.S? Are tax exemptions in Canada the same as in the US?

Let’s explore US tax issues as they pertain to you – the Canadian US expat… Read More

Although you are no longer a resident of the United States, as a US citizen you are required to report all sources of worldwide income to the IRS. This includes but is not limited to employee wages; interest and dividends (schedule B); self-employment income (Schedule C); capital gains and losses (Schedule D and Form 8949); rental real estate, royalties, partnership, S corporations, estates, trusts, REMICs and other supplemental income (Schedule E).

To answer this question, an examination of the US tax-treaty with your foreign country of residence is required. However, generally speaking, the country where the income is earned has first rights to taxation. In that case, you can either exclude your foreign earned income, or use your foreign taxes paid as a credit to offset your US tax liability.

Up to $107,600 is excludable for tax year 2020, and up to $108,700 for 2021. If filing a joint tax return with your spouse, then each spouse can exclude up to this amount.