Do I need to File a US Tax Return?
If you are a US Citizen, Resident Alien (Green Card holder, or deemed US resident), or a non-resident with certain US source income, the answer may be, “Yes.”
US Citizen or Resident Alien?
Figuring out whether you fall into one of the above categories is often misunderstood. For instance, if you are the holder of an expired Green Card, you will still be subject to worldwide income taxation in the US until the proper steps are taken to surrender that Green Card. Also, individuals born outside the US to a US parent, may be considered to be US person subject to taxation on their worldwide income.
Deemed Residents
You may also be an accidental resident, or deemed to be a US resident by spending a significant amount of time in the US. This is based on what is referred to as a “substantial presence test.” For tax purposes, individuals are considered US residents if they meet the substantial presence test. This test is met in a calendar year by being physically present in the US for at least:
- 31 days during the current calendar year; and
- 183 days during the current year and the 2 preceding years – computed counting all the days of physical presence in the current year, but only a third of the days of presence in the first preceding year, and one sixth of days in the second preceding year.
Living Outside the US
Will a move to Canada, or another country from the US remove the requirement for a US citizen, or resident alien to file a US tax return? Likely not. The requirement to file a US return for a US citizen, or resident alien is generally the same irrespective of country of residence and income is generally reported on a Form 1040. US non-residents are taxed only on their US source income and file a Form 1040 NR. Fortunately, for both US residents and non-residents, there are a number of elections, deductions and credits that may be claimed to reduce income tax liability to nil in many instances.
Filing Thresholds
For the 2018 tax year, a tax return is generally required to be filed if your gross income from worldwide sources is at least the amount shown below for the various filing statuses.
Filing Status
- Single – $12,000
- 65 or older – $13,600
- Head of household – $18,000
- 65 or older – $19,600
- Qualifying widow(er) – $24,000
- 65 or older – $25,300
- Married filing jointly – $24,000
- Not living with spouse at end of year – $0
- One spouse 65 or older – $25,300
- Both spouses 65 or older – $26,600
- Married filing separately – $12,000
Self-employed individuals generally file when net earnings from self-employment are $400 or more.
Need Help from a Cross-Border Tax Accountant in Toronto or Oakville, Ontario?
Got US tax and Canadian tax compliance issues? Contact Cross-Border Financial Professional Corporation – When Perspectives Matter!
Karlene J. Mulraine, EA, CPA, CA, CPA (NH) is the President of Cross-Border Financial Professional Corporation. Follow us on Linkedin and Twitter, or hang out on Facebook.
The views expressed in this article are those of the author and should not be relied on to make decisions. Consider discussing your specific circumstances with an appropriate specialist.