US Tax Preparation

US tax preparation involves a more detailed process for those individuals that live outside of the United States. The types of income earned in foreign countries (including Canada) have to be fully understood and reported according to US tax rules, and where applicable tax treaties between the US and the respective foreign countries need to be understood and applied correctly. In addition to all US returns being reported in US dollars (with foreign currency translations required for all foreign transactions), a thorough understanding of the US Income Tax Act, the US-Canada Tax Treaty, and the Canadian tax laws are all important in ensuring accurate tax preparation.

The IRS and FinCEN have developed a number of additional US tax forms that are specific to those holding foreign assets and for those that have interests in foreign entities and trusts. US tax preparation, includes where applicable, the completion of the FBAR / FInCEN114 (foreign bank and financial account reporting) which is reported to FinCEN. In addition, the IRS has a number of additional tax forms that are required to be included with US income tax filings (where certain criteria are met). Some of the more common foreign forms required on a US Tax Return include Form 1116 (foreign tax credits), Form 2555 (foreign earned income exclusion), Form 8938 (statement of specified foreign financial assets), Form 8621 (return by a shareholder of a PFIC or QEF), Form 3520 and 3520-A (for foreign trust reporting), and Form 5471 (report of a US person with respect to certain foreign corporations).