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US tax return for a green card holder living in Canada

Asked Feb 10, 2009, 01:57 PM — 3 Answers
My family (wife & 2 kids: 20 and 22) and I are Canadian citizens living in Canada. We received our US green cards (Permanent Residence Status) two years ago.

Because of our employment and schooling situation we haven't move to US yet and, have no income from there. We have kept our green cards by entering regularly to US twice a year.

In this scenario:

1- How important is for us to file a US tax return?
2- What could happen if we don't do that for, let's say, 3 more years?
3- If after 3 years from now we effectively move to US, what are the implications of not having a tax return for the previous years?

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3 Answers
AtlantaTaxExpert's Avatar
AtlantaTaxExpert Posts: 19,866, Reputation: 3723
Senior Tax Expert
  
#2

Feb 25, 2009, 09:58 AM


Green card holders are required by law to file annual U.S. Tax returns until they formally renounce their green card status.

If you fail to do so, and you OWE taxes, it could result in some nasty late filing penalties, plus the accrued interest.
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mhscga's Avatar
mhscga Posts: 1, Reputation: 10
Junior Member
  
#3

Aug 30, 2009, 07:45 PM
Hi,

Responding to your scenerios:
In this scenario:

Q 1- How important is for us to file a US tax return?
A As a Green card holder you are required by US law to file

Q 2- What could happen if we don't do that for, let's say, 3 more years?
A Penalties and interest at the least... Possible cancellation of your Green Card status worst case

Q 3- If after 3 years from now we effectively move to US, what are the implications of not having a tax return for the previous years?
A Cancellation of your Green Card status and denial of reinstatement of status

Why risk the losing your Green Card status when complying with the filing rules is easy.

I'm a Certified General Accountant in Toronto that handles similar client situations at a reasonable cost and painless method... Most times avoiding any payment of US taxes.

M H Storoszko, CGA
Www.storoszko.net
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MukatA's Avatar
MukatA Posts: 7,105, Reputation: 963
Tax Expert
  
#4

Aug 30, 2009, 11:42 PM


If your total worldwide income exceeds the filing requirement, you must file your U.S. Tax return. On your return, you must report your world wide income. If you paid taxes in the foreign country, you will claim credit for taxes paid in the foreign country by filing Form 1116 or can file form 2555 Foreign Earned Income Exclusion..
Even if you have a filing requirement, the chances are you will not pay any U.S. Tax or pay very little U.S. Tax. Read: Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income
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