Filing US taxes ??? (HELP)

[M + S 1]

We both live in Ottawa, my wife is the US Citizen but has lived in Canada since 2yrs old and obviously has never filed US taxes. From research here I assume she has to file the last 3 years of taxes, she is a gov't employee and just a basic T4 as there is nothing tricky about her taxes. 

We met with an accountant today with a large firm and he mentioned the fee for this service is anywhere from 5-10 thousand, but expects it to be closer to 5,000.00. This seems ridiculously high for such a simple tax return, what are people in our situation going about getting this done? 

He also mentioned you have to disclose any bank accounts you have had and the max amount that has ever been in the account for the last 6yrs.

 

  Any help or recommendations needed ????

 

Thank You

  

[Roel 7,193]

What do you mean she obviously never files US taxes? As U.S. citizen she is required by as to file her US taxes no matter where she live in the world... maybe that's why the fee is so high. Since they need to file a lot of paperwork that she own.

[usmsbow 802]

She needs to file every year she has earned income. She does not owe anything if she's made less than the following: $92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015. Assuming she made less than that, she just needs to fill out a 2555-EZ and a 1040 for every year she earned an income. 

 

If she made more than that amount, it's a bit more complicated, but you probably can figure out how to do it w/out paying a CPA (certainly not $5K for one). 

 

And when you mean government employee- I assume you mean Canadian government and not the US? If US gov't employee, then she really has a tax problem. 

[M + S 1]

17 minutes ago, usmsbow said:

She needs to file every year she has earned income. She does not owe anything if she's made less than the following: $92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015. Assuming she made less than that, she just needs to fill out a 2555-EZ and a 1040 for every year she earned an income. 

 

If she made more than that amount, it's a bit more complicated, but you probably can figure out how to do it w/out paying a CPA (certainly not $5K for one). 

 

And when you mean government employee- I assume you mean Canadian government and not the US? If US gov't employee, then she really has a tax problem. 

Yes, has lived in Canada since 2yrs old, never made a dollar in US. Works for city of Ottawa.

[NikLR 13,231]

2 hours ago, M + S said:

Yes, has lived in Canada since 2yrs old, never made a dollar in US. Works for city of Ottawa.

Doesn't matter.  She is required by US law to file taxes with the IRS if she has made over the threshold to file.  She will need to back file a lot of taxes, not just the last 3 years.  The last 3 years are just required for immigration.  

[M + S 1]

7 hours ago, NikLR said:

Doesn't matter.  She is required by US law to file taxes with the IRS if she has made over the threshold to file.  She will need to back file a lot of taxes, not just the last 3 years.  The last 3 years are just required for immigration.  

Yes we know all that, most US citizens would not know they have to file taxes in the US whether they live there or not as the US is only 1 of 2 countries that require it. Even the US embassy in Ottawa did not know that.

What I was looking for was how people in this situation go about getting the required US taxes done, was there a reasonable priced accountant that someone has used that could help us.

 

Thanks

[NikLR 13,231]

Try serbinski 

[sarrobo 18]

I do/did mine myself. 1040 + 1116 forms. You will also need to get a TIN number (separate form you can send in with your return), because as a married couple you will need to file jointly and report all foreign income. They're only charging you so much because it IS a lot of paperwork, but you can definitely do it yourself.

[M + S 1]

Thanks

[acidrain 325]

My spouse was in a similar position with his US taxes. He never had a US social security number as he never lived in the US as an adult. It was a real fiasco getting one as SS questioned whether he was being truthful to who he was. After moving to the US social security fraud is extremely common. If your spouse doesn't have their SSN you will have to first start with that.

 

I never got an ITN number and our tax accountant said it wasn't necessary as a foreign spouse I am not obligated to report my income. So we filed "married - filing separately". We did however have to report any joint assets such as a house sale, rental property or joint bank accounts. Now that I am living in the US I will be filing next year's return. Keep in mind things such as RRSP's and TFSA's are not tax exempt in the US. We cashed all ours out so we did not have to pay tax on the investment return. I think in total we paid $6 in taxes as you will not be taxed twice.

 

There is an amnesty program for anyone in this situation. You can go to a professional accountant and file what's called the " Streamlined Foreign Offshore Procedures ". This program is mainly for those who were not aware they were supposed to file US taxes. We went through this process with a professional accountant. My spouse filed 6 years of FBARS (foreign bank account) and 3 years of tax returns. The bank information is only for accounts if the amount hit over $10,000. Once this was completed we never heard from the IRS. It was straight forward and it set off no red flags. We then requested tax transcripts you will need to show at your interview.

 

The thing to be careful with if you start filing taxes without any sort of explanation the IRS may wonder why. Which is why we chose the compliance program. It was costly and after everything was done the Offshore procedures cost us $2,500. However, we felt good we didn't have to worry about the IRS coming after us for non compliance for earlier years. We had gotten quotes from other firms which were much higher. This was a couple years ago now so I'm not sure if the price has gone up.

We used the tax accountant from this website and did everything online: https://www.us-taxprofessionals.com/.

Edited June 24, 2018 by acidrain