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U.S. Tax and Cross-Border Tax Services for Individuals

We help individuals with their U.S. tax and international tax planning and compliance needs. Canadians who work in the United States or have U.S. source income, be it from a U.S. real property they rent or their investments, often are faced with U.S. tax and cross-border tax issues that, if not addressed, may lead to double taxation or higher taxes and penalties.

By the same token, U.S. citizens and Green card holders who live in Canada or outside the United States are faced with much more complex international tax rules and are not always able to resolve those issues on their own. Whenever you are involved in a cross-border transaction, we are here to help you tackle your U.S. tax and cross-border tax compliance and planning needs.

individual us tax services

Individual U.S. Tax Planning

Treaty positions, Planning, Income Characterization and Sourcing of Income

Proper tax planning can provide significant benefits for you, the taxpayer, in specifically avoiding double taxation. Our tax professionals can assist at the outset of your move outside of the U.S. or can develop a plan that will permit you to utilize the various tax treaties that the U.S. has with different governments. Our team will analyze your situation, provide information about how your income is characterized and U.S. tax laws and provide practical guidance to develop a tax position that will save you money.ocus areas. We assist our clients who temporarily work in Canada or permanently live outside the United States with all aspects of their lives when taxes are an issue. In addition to helping our clients in complying with the IRS and Treasury filing and reporting obligations, we also proactively explore tax planning opportunities and do our best to protect our clients from potential penalties.
Certain individuals have a more complex tax structure than others. Whether you are a high-flying executive with income being generate around the world or if you are an employee of a Canadian based company who receives a salary, there is a nuanced approach to where your income is generated, how it is characterized and what treaty benefits you can derive from these characterizations. These determinations are often complex in nature but have a discernable benefit when it comes to filing your U.S. taxes.

Personal and Investment Real Estate Properties in the U.S. and Abroad (Planning for tax effective structures for individuals)

Many Canadian citizens travel to the U.S. to vacation and many of those vacationers either own or rent U.S. homes during the cold Canadian winter month. These assets that are bought, sold, rented or renovated can haves can assist at the outset of your move outside of the U.S. or can develop a plan that will permit you to utilize the various tax treaties that the U.S. has with different governments. Our team will analyze your situation, provide information about how your income is characterized and U.S. tax laws and provide practical guidance to develop a tax position that will save you money.
We have many clients who ask us about the Foreign Investment in Real Property Tax ACT (FIRPTA) and the rationale for sending the IRS 15% of the amount realized on the sale of the property. Certain individuals do not even know that they are entitled to get some of that money back! Our tax professionals can help plan and guide you through the transaction process and prepare documentation to expedite any returns you are entitled to and facilitate keeping your money in your hands.

Tax Planning and Compliance for Canadian Residents with a U.S. connection

Canadians are often unaware when they are required to file a U.S. tax return with the IRS. There are a variety of scenarios when this could occur but there are certain situations that are dictated by the Canada – U.S. tax treaty and U.S. domestic tax law. Generally, non-U.S. citizens who preform a service in the United States or receives U.S. sourced income will be required to file a U.S. tax return.
Other scenarios to consider are:
  • When you own or operate a business that is engaged in a trade or business within the United States
  • Certain gambling winnings, royalties, interest, dividends, pensions and annuities, scholarships and grants which are not withheld because they are categorized as not effectively connected to a U.S. trade or business
  • Rent from real estate you own or operate in the United States (filing of W8-ECI or Form 1042-S if necessary)):
  • You are selling your U.S. based real estate
  • You are a student in the United States;
  • You have been present in the U.S. for a period of time that you become a U.S. tax resident for U.S. tax purposes.

Estate, Gift, and Trust Tax Services for Individuals and Business Owners

Estate and Gift tax planning will assist in transferring your wealth to the next generation in a tax-efficient manner while maintaining your specific distribution plan. Our team can assist in the consultation, planning, compliance and planning aspects of this highly sensitive area of estate planning. Proper tax planning can save your heirs both time, money and alleviate any compliance concerns they may have, especially when your estate has assets that cross the border.

U.S. estate taxes in a cross-border context

Our professionals will assist in determining your estate tax exposure, assist in determining the tax residency of your beneficiaries and help you, your family and your advisers understanding the applicable reporting requirements and tax obligations. This will allow you to properly plan for your wealth succession, keeping in mind the complexities of a cross border estate.

Things to consider when estate planning include:

Canadian deemed disposition upon death and capital gains tax;
Trust structures that will pass your wealth onto your surviving spouse, while maintaining an eye towards his or her future estate tax exposure for example using an Irrevocable Bypass Trust or a Martial Trust.
Utilizing different trusts and structures to reduce your estate tax exposure:
  • Qualified Personal Residence Trust;
  • Grantor Retained Annuity Trust;
  • Grantor Retained Unitrust;
  • Irrevocable Life Insurance Trust;
  • Limited Liability Company;
  • Limited Partnership;
  • Qualified Terminable Interest Property Trust;
  • Charitable Trust.
Maximizing your annual gift exclusion to gift property to your beneficiaries prior to your passing.
Obtaining life insurance or an annuity contract to ensure that your estate has sufficient liquid assets upon your passing.
Once your estate has been passed to your heirs, there will be certain filing requirements necessary to complete your estate. Our professionals can assist in preparing:
  • Forms 3520 and Form 3520A
  • Form 709 – Gift (and Generation-Skipping Transfer) Tax Return
  • Form 706 – Estate (and Generation-Skipping Transfer) Tax Return (including nonresident alien return)
  • Form 1041 – Income Tax Return for Estates and Trusts (including nonresident alien return)

Tax planning for Individuals Who Are Moving to the United States

For Canadian individuals who plan on moving to the United States there are two areas of concern, immigration and tax. When engaging an immigration lawyer to help get you access to the United States, you may not gain a full understanding of the tax implications. Our team of professionals can help you understand the tax implications of moving, can assist in pre-planning and structuring so that your move leads to a seamless tax event and assist in ongoing compliance with U.S. tax laws.

Review of Estate Planning Documents for Tax Compliance

U.S. citizens, U.S. Green Card holders or Canadians with U.S. family members may be unaware that their estate planning may be subject to U.S. gift and estate tax laws. Understanding whether you are subject to these laws is half the battle. The other half is understanding the implications of these tax laws and creating an estate plan that will pass your wealth to your beneficiaries in a tax efficient manner. This can range from having simple wills to complex trusts with various cross border elements. Our team of professionals can review your estate plan, with you and your estate planning advisors, to help you understand whether your estate will be subject to U.S. gift and estate tax laws and what you can do to mitigate your exposure.

Stock Option Election Planning

Oftentimes employers provide employees with an incentive strategy of granting them the right to acquire shares of stock in a company at a fixed price for a period of times. This benefit, can lead to lucrative profits for employees in emerging companies. U.S. individuals wanting to reap the benefits of these stock options are cautioned into understanding the tax implications of these options. Our team of professionals can help evaluate your situation and help you understand the implications of exercising your stock options.

Assessment of Retirement Options with 401(k) and IRA

Real Estate Services

Canadian citizens wanting to invest in U.S. real property are oftentimes advised by U.S. lawyers, situated in the United States, as to how to properly acquire their property. Individuals hear of special trust structures or investment vehicles that can ‘shield you from tax or liability.’ Although these individuals or professionals may be trying to help, they often do not understand the implications for a Canadian citizen who is investing in U.S. real property. Our team of professionals can assist in understanding your needs and desires in purchasing U.S. real property and along with the Law Office of Alexey Manasuev we can handle all aspects of your purchase.

Our team of professionals can assist you in the complexities of cross border real estate purchase and sale. From the first states of reviewing and advising on contracts, liaising with real estate agents and drafting closing documents to assisting in the sale of your U.S. property by explaining the complexities of FIRPTA to closing agents, drafting closing documents, including FIRPTA withholding documents to assist in reduced withholding where possible and having you the client sign closing document in Canada. Our team can make this transition to owning or selling your U.S. property as seamless as possible. We also prepare necessary documents, such as power of attorney documents and other estate planning documents to help minimize the complexities of owning property in a foreign jurisdiction. Our Canadian notary services allow our client the ability to close on their property from the comfort of our offices in Canada.

Individual U.S. Tax Return Preparation

Preparation of U.S. Individual Tax Returns and Foreign Bank Account Report

  • Preparation of U.S. Nonresident Alien Income Tax Return (Form 1040NR) for US rental income, capital gains from real property, salary income, and business income;
  • Preparation of U.S. Individual Income Tax Return (Form 1040), and individual state income tax returns if necessary;
  • Form FinCEN 114, Report of Foreign (non-US) Bank and Financial Accounts

 

Determination of Tax Equalization for U.S. Citizens Living in Canada

Many Canadian citizens travel to the U.S. to vacation and many of those vacationers either own or rent U.S. homes during the cold Canadian winter month. These assets that are bought, sold, rented or renovated can haves can assist at the outset of your move outside of the U.S. or can develop a plan that will permit you to utilize the various tax treaties that the U.S. has with different governments. Our team will analyze your situation, provide information about how your income is characterized and U.S. tax laws and provide practical guidance to develop a tax position that will save you money.
We have many clients who ask us about the Foreign Investment in Real Property Tax ACT (FIRPTA) and the rationale for sending the IRS 15% of the amount realized on the sale of the property. Certain individuals do not even know that they are entitled to get some of that money back! Our tax professionals can help plan and guide you through the transaction process and prepare documentation to expedite any returns you are entitled to and facilitate keeping your money in your hands.

IRC Section 911 - Foreign Earned Income Exclusion & Qualified housing expenses deduction – Form 2555

Our tax professionals can assist in utilizing and recognizing some of the most advantageous provisions of the United States Internal Revenue Code. In preparing your taxes, U.S. citizens and permanent residents can exclude over $100,000 of your income earned abroad, per person. There are additional deductions that can be made, namely a deduction for qualified housing expenses.
These deductions and exclusions assist in reducing the tax burden on U.S. citizens and permanent residents living in Canada with tax obligations to the IRS. These deductions can only be claimed by producing the appropriate IRS Forms which tax professionals can take care of for you.

Foreign Tax Credit (FTC) and Deduction for Foreign Taxes Paid

Alongside deductions and credits permitted by the Internal Revenue Code, certain tax treaties between the U.S. and foreign governments permit the application of a Foreign Tax Credit or Deductions for Foreign Taxes paid. These are differing filings, the Foreign Tax Credit is a dollar for dollar credit on taxes paid to a foreign government, if you have specific financial withholdings by that government even of passive income activities. This is not a deduction of the tax rather you are reducing your tax burden itself.
Conversely, you could choose to utilize certain deductions to taxes paid for certain activities such as property, GST/VAT paid and other non-income based taxes outside of the U.S. Our tax professionals will assist in determining the best method to utilize to reduce or eliminate U.S. taxes owed. Proper planning and tax preparation is required in this complex area but a qualified U.S. tax professional can assist in navigating these complex areas that provide immense benefit.

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Determination of U.S. residency Issues and ‘Closer Connection’ filings

Often individuals are required to fill out certain forms by their banking institutions or their Canadian tax prepares alert them to the fact that they have acquired certain presence in the U.S. that requires the application of a tax treaty. Our tax professionals can walk you through the U.S. residency tests and elections that are possible with regards to the substantial presence test and greed card test. The ability to make elections under U.S. tax treaties is essential to staying onside with U.S. tax compliance and we are help to help guide you and help understand the forms required.

Do You Own a Bank Account Outside of the US? Shareholder of a non-U.S. Company?

Foreign Bank Account reporting has become an hot topic around the media and tax professionals. If you have received an IRS form from your financial institution or are required to file U.S. taxes, you may be required to file certain information reporting documents with the IRS. Although these documents fall under the reporting category and are not subject to tax, failure to report or improper reporting can lead to harsh penalties from the IRS.
Even if you have a non-U.S. based company and are reporting losses, you still may be required to report. Our tax professionals will assist in identifying the types of account that you are required to report and will prepare and file these forms on your behalf.

Streamlined Filing Compliance Procedures and Offshore Voluntary Disclosure Program

There are many reasons why a U.S. taxpayer may not have complied with U.S. tax law. Oftentimes it is as a result of misinformation, being misinformed or not even realizing that you are subject to the U.S. tax regime. The U.S. government recognizes that there are individuals who are not properly filing with the IRS and has provided different programs to permit individuals to get compliant with the U.S. tax regime. These programs aim to reintroduce individuals into the system by having them file delinquent tax returns for previous unfiled years.
If you are an individual in this type of situation or if you are unsure whether you are properly reporting your information to the IRS our tax professionals will assist in making a determination whether you could enter one of these programs. Generally, the IRS will try and impose the highest possible penalties on delinquent taxpayers to ensure that they capture the appropriate amount of tax dollars. Our professionals are here to ensure that you not only become complaint, but that your case is treated fairly and you pay the appropriate amount, if necessary to become compliant.
This can include:
  • Making a determination of procedural alternatives available to U.S. taxpayers:
  • Whether the reason for misfiling was willful;
  • Developing a reasonable cause defence;
  • Using the various amnesty programs to bring you into compliance;
  • Developing a strategy outside of the framework of the amnesty programs to become compliant with the relevant tax authorities;
  • Once your tax compliance strategy is determined we will prepare and file the necessary returns and reporting requirements to become compliant;
  • We will engage the IRS to ensure that your file is properly reviewed, including contacting the IRS Criminal Investigations unit if necessary;

ITIN Services

Our professionals can assist in obtaining an Individual Tax Identification Number (ITIN), renew your ITIN or make a determination if you are eligible for an ITIN.
Your ITIN is issued by the IRS to foreign individuals, not U.S. citizens, who need to file a U.S. federal tax return or are required to file other disclosure or reporting documents to the IRS. The ITIN is not a substitute for a typical Social Security Number (SSN), rather certain individuals do not qualify to receive a SSN.
Our professionals are qualified to verify all of your supporting documents in your W-7 Application for IRS Individual Taxpayer Identification Number and will permit you to keep your original documents while copies are sent to the IRS.
Visit our ITIN Service Center

Gambling US Taxes Refund for Canadians

Many vacationers or travelers to the United States eventually find themselves in the casino. For those of us who are lucky enough to hit it big, we get excited about a windfall of gambling winnings without realizing the tax consequence. The IRS knows this and imposes a thirty percent withholding on the winnings and this is not taking into consideration the income tax and state taxes that will be levied.
As a Canadian citizen and resident, these winnings are not reported to the CRA. As this 30% is merely a withholding, our team of professionals can assist in making an application for reduced withholding so that you get your winnings back as soon as possible. You will be required to file a U.S. Income Tax Return (1040NR) and to obtain an Individual Taxpayer Identification Number (ITIN). Our one stop shop will assist in reducing your withholding, preparing the necessary filings with the IRS and submit the filings so that you can use your money worry free.

Immigration and Family Matters

There are many different life events that can impact you or your family down the line. Whether you are marrying a U.S. citizen, planning on having a child while you are abroad or planning on retiring in a different jurisdiction, there are many tax obstacles that can and must be navigated.
Our tax professionals can help guide you through any misunderstandings you may have and provide useful information to help plan for the next steps. We want to help individuals maximize their tax benefits and savings and prevent any potential tax complications.

U.S. Green Card Holder and a Citizen and Tax Resident of Another Country

U.S. Green Card holders and permanent residents offer the unique situation where you are either taxed as U.S. permanent resident or you have the ability to file non-resident U.S. tax returns. This is a complex determination that must be made with appropriate support and guidance. If you had a Green Card and are not sure if you have effectively ‘abandoned’ it, you are a current Green Card holder or you are unsure of your status, our tax professionals can assist in understanding your status and filing the appropriate forms to reduce your tax burden and give you piece of mind that you have properly complied with U.S. tax laws.

This is one of our main Focus Areas

Tax Disputes

IRS Audit Defense, Appeals Representation, and Penalty Abatement Requests

The IRS is always lurking around the corner and their enforcement agencies are becoming more efficient at finding and prosecuting delinquent taxpayers. Many individuals and business are finding themselves under the eye of the IRS enforcement authorities, even while leaving abroad. Our approach to client services is to help avoid IRS audits by providing sound, pro-active advice to clients to maintain their compliance with the IRS. In the event that you do get audited, we are still here to help.
Our team of professionals will assist in developing a proper strategy and will work hard to protect your interest before the IRS so that you maximize any potential resolution. We will help:
  • Produce settlements of back taxes providing an outcome with less tax owed than what you owe based on an offer in compromise;
  • We can negotiate and set up a payment plan that is not burdensome of your lifestyle, within framework established by the applicable tax authorities (such as negotiating installment agreements with the IRS);
  • We will attempt to reduce or eliminate penalties utilizing penalty abatement and waiver requests;
  • We will strive to remove wage garnishments, bank levies and/or tax liens;
  • Request innocent spouse relief;
  • Prepare delinquent (unfiled) tax returns, getting you compliant with foreign bank account reporting (FBAR) and international information reporting requirements;
  • All aspects of IRS audit defense, support in an ongoing examination, and representation in Appeals;
  • Managing transfer pricing audit;
  • Requesting competent authority assistance to eliminate or reduce double taxation;
  • Resolving state and local tax issues.

IRS Liens and IRS Levies

When the IRS begins sending communications to individuals or businesses and those notices are being ignored, the IRS has the ability to issue Liens and Levies against individuals and their properties. This is an unfortunate situation that occurs when individuals or businesses do not properly engage the IRS. Our team of tax professionals will help explain the implications of these IRS notices and will explain the options available to you. If your case requires engaging the IRS to abate penalties and/or remove liens, or tax professionals are equipped with the knowledge and “knowhow” to best represent you in front of the IRS and help achieve favorable results.

IRS Wage Garnishment and IRS Seizures

The IRS as a service, does not let much passed them. If you have been unintentionally avoiding paying taxes or your tax preparing technique has led to an underreporting of income, the IRS may garnish your wages or seize property to recover any underpaid amounts. This is a serious situation that requires a delicate a thorough understanding of all of the options available to you. Our team of professionals can help assess your situation and explain to you the various options you may have. We will also represent you in front of the IRS if required. Wage garnishment and seizures require certain knowledge and understanding of the processes involved. Our experience in this area can assist you in mitigating any future penalties and becoming U.S. tax compliant.

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