We often will find errors in returns prepared by US based preparers for a simple reason. We specialize in US taxes for US citizens and green card holders in Canada. This is what we do every day. Many US based firms, including those sitting in border towns, will not know or understand the issues that affect Americans in Canada, such as how to treat an RRSP, a TFSA, an RESP, their mutual fund investments, their businesses and trusts. We built our practice with the knowledge of how to deal with these and many other items affecting Americans in Canada.
Not only can we do your American taxes, but we specialize in Canadian taxes as well with our staff preparing many Canadian individual tax returns every year. We also prepare many Canadian corporate, trust, and estate returns.
While we are happy to prepare your US returns only, having us prepare both Canadian and US returns makes more sense as we can set up your deductions and credits to maximize them in both countries.
When we prepare both Canadian and American taxes, we take advantage of the opportunities in both countries to minimize tax payable. We allocate deductions and credits to the appropriate places to ensure that the tax is as low as possible in both countries. What good is it to save a dollar in Canada but then pay it to the USA.
When you hire us, you are getting a firm that has the expertise of dealing with the many US tax issues that can affect your case. Many local firms will prepare a US tax return as a courtesy by just translating the Canadian return to US dollars. However, most local firms cannot properly prepare a US tax return due to a lack of expertise on the subject. Filing an incorrect or incomplete return can be worse for you than not filing at all. In addition, many of the firms that can competently prepare a US tax return charge inflated prices that many people can’t afford.
While many people like to be able to visit the office, this ability is not necessary for either of us. You need a properly prepared tax return and the ability to contact us when necessary. We have a toll free number so you can call us and we can be reached by email at anytime.
Most of the programs designed for online filing in the USA are designed for average American taxpayers. By virtue of the fact that you don’t live in the USA, these programs will leave out a lot of things you may need. In addition, unless you are well versed in US tax law, you might not even know what you are missing which can compound the problem. Furthermore, these programs don’t take Canadian income products into consideration; even the deluxe versions which are fairly expensive as well.
These products serve the American marketplace. Our business is primarily aimed at the American in Canada and as such, we know what forms are needed and how to properly prepare them.
The following list shows some indicators that your current accountant is not properly preparing your US returns. Please note that these factors are not evidence of a bad return. If you spot some of these factors on your returns, you can contact our office for a review of the returns. The cost of the review will be credited toward any future work we do for you, including amending the old returns.
Here are the indicators:
While many firms in Canada charge a significant premium for US tax services, we understand that cost is an important component in your choosing a company to prepare your US taxes. We strive to ensure that the services you receive are top of the line, yet we charge prices designed for the average taxpayer to be able to file complete and correct returns annually. We don’t want to see people risking jail or significant fines and penalties for failure to file.
We have a flat pricing structure so you will know in advance approximately what your bill should be. Furthermore, we stand by our returns and are ready to defend them if they are challenged or audited by the IRS.
Without reviewing your local accountants’ work, we cannot comment as to the quality of the work, nor can we comment on the pricing structure. However, if many of the points mentioned above in the “Prior returns were not properly prepared…” section appear on your return, then that would be a good indicator that your return is incomplete. If the accountant is not preparing a complete return, they should charge significantly less than a firm who would prepare the entire return. Furthermore, we only take on returns we know we can properly prepare. Once we prepare a return, we will sign it and defend it if the IRS comes calling. We want all our clients to be satisfied with our work.
In addition, the major accounting firms’ prices for US work range from very high to ridiculous reflecting the unique aspect of preparing a US return in Canada. As a small firm, we can afford to charge prices that are more reasonable than the bigger firms, while still providing complete, well prepared tax returns to our clients.
Did you know there are rules in place regarding the filing of US individual tax returns for compensation? All people or firms who prepare tax returns for compensation are obligated to have a PTIN number, list the number on the return and sign the return. Failure to do this can result in your being in violation of US tax law. Any penalty imposed on you for this can put you in violation of your Canadian professional conduct rules. Check with your local institute or ordre for more information. While this PTIN is available to anyone who requests it, the IRS is tracking returns by the PTIN to ensure that returns are being properly prepared. If you are not completely trained in US tax, you are putting yourself and your clients at risk.
In addition, while most people mean well, there are a lot of nuances to the US tax code that can’t be reconciled with Canadian tax. If your clients have RESPs, TFSAs or mutual funds and you don’t properly report them, your clients will be liable for severely punitive penalties if they are caught having not filed an information return. Also, the statute of limitations does not run on an incomplete return, even if filed in good faith. Any errors you make can be costly to your clients and can result in your being sued by them for any mistakes made, especially if you don’t have the qualification to prepare these returns in the first place.
US taxes are what we do and we have no desire to steal your clients. We pledge that we will not offer any services to your clients if you can provide them the same service. In addition, if a client of yours approaches us for a service that you offer, we will contact you directly and offer you a right of first refusal. This will enable all of us to do what we specialize in. You can focus on your Canadian work where you are an expert and we can do the American work.
Not only can we take care of their US returns, but we will work with you to ensure their Canadian returns are filed in an optimal manner to ensure that deductions and credits are maximized in both countries. Furthermore, we pledge that we will not offer any services to your clients if you can provide them the same service. In addition, if a client of yours approaches us for a service that you offer, we will contact you directly and offer you a right of first refusal.
There are currently two programs available for you. One is OVDP and it will require you to prepare 8 years of tax returns & FBARs. FBAR penalties will be applied at a rate of between 5-27.5%. This is a fantastic program if you knew you should have been filing and ignored the rules or if you have deliberately lied or filed fraudulent tax returns. If you believe you might have criminal liability, this might be the program for you.
The second program is designed for Americans living abroad who have simple returns, will owe little to no tax and didn’t realize they should be filing.
If you fall somewhere in between the two categories, make an appointment with one of our people who will guide you in which process is best for you.
For the American living in Canada, tax planning is a necessary part of life. By properly structuring your affairs, you can enjoy the benefits of being American without paying an arm and a leg each year. Some items to look for include:
Each of the above items have adverse tax ramifications in the USA. Ownership of these vehicles can cost you significantly, either in taxes or professional fees to prepare the necessary annual forms.
We understand that this is all a shock to you and that cleaning up these matters can be very expensive. For anyone heavily invested in any of the above categories, we will work with you to ensure that your returns can be properly prepared and at an affordable price. For further information, see our website, follow our blog or make an appointment with our tax specialist who can guide you through this.
In Canada, there are a few items that are taxed more favorably than in the USA. Some of them include:
As these items are taxed more heavily in the USA, proper planning is essential to ensure you have sufficient tax credits available to cover the taxes that may be imposed on this income. The most important thing to do is to plan for these items. Proper tax planning makes US & Canadian tax much simpler for you. For further information, see our website, follow our blog or make an appointment with our tax specialist who can guide you through this.
This depends on various factors. Is the property an investment property or a vacation property? Do you plan to have it jointly owned or will you own it yourself. Do you intend to hold it the rest of your life?
Usually, the best approach will be one that will minimize estate tax exposure while reducing the risk of withholding on income and gains on the property while being held. In order to find out what approach is best for you, please make an appointment with our tax expert who will guide you through the process.