Coronavirus Has Resulted in Tax Changes, but Those for Expats Are More Complicated

Our accountants thought taxes were hard enough before the Coronavirus. Now they’re really, really complicated. Credits, deductions, new programs, unemployment – the list goes on and on. But guess what’s even more complicated?

Expat tax returns in the US are complicated.

Photo credit: kenteegardin via Foter.com / CC BY-SA

Expat tax return prep for California residents, combining the tax complexity of the USA system with the tax complexity of the Canadian system!

Many foreign residents work in the US for part of the year, especially in the Bay Area for companies in the tech industries, and therefore they have tax liabilities not only in the US but in their home countries as well. In particular, at Safe Harbor, we carry out a lot of expat tax return prep for California residents whose home country is Canada. If you are a foreign national, from Canada or anywhere else, with tax liabilities in more than one country, then you need to talk to us. We are undertaking more and more work for clients who have to pay taxes both here and overseas.

Canadian citizens working in the US are liable to pay US taxes in the same way as US citizens either working in Canada or who have income there are liable to pay Canadian taxes. It is called Cross-Border Tax Returns and – yes – it’s complicated! Just to begin with, many Canadians working here do not realize that they are subject to US tax on the income that they earn in the US.

Many Possible Scenarios for Tax Issues Post-Coronavirus

It gets complicated because there are so many possible scenarios. For example, you may be a Canadian citizen working in the US and subject to US tax. You could be working in both countries and be subject to tax in both. You could be working in the US and have passive income such as rent, for example, in Canada, or you could be a US citizen working in the US but with business interests in Canada. And those are just a few of the possibilities!

It doesn’t matter when you use Safe Harbor for your expat tax return prep for California residents. We not only work with Canadian nationals but with many others for Cross-Border Tax Returns. Ove the 30 years that we have been in business, we have built up relationships with tax CPA’s in many countries. In those instances where we may not have sufficient knowledge of the local tax laws (after all, there are an awful lot of them!) we have local contacts who can provide the help that you need. It works the other way around too, because we often help out CPA’s in other countries who need some clarification about US federal tax laws.

What matters is that, wherever you are domiciled and wherever you are liable for tax, Safe Harbor can help you.


Photo credit: kenteegardin via Foter.com / CC BY-SA

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