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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7426
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am an American citizen who has lived and worked in Canada

Resolved Question:

I am an American citizen who has lived and worked in Canada since 1970. I have always filed and paid income tax in Canada. Last May my mother passed away and I received a portion of her annuity. I recently received a 1099 form for the taxable amount which is 1763.00. Am I required to file U.S. income tax?
Submitted: 3 years ago.
Category: Tax
Expert:  Robin D. replied 3 years ago.

Robin D :

Hello and thank you for using Just Answer

Robin D :

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

Robin D :

If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction. (You do appear to meet the requirements)


If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is now adjusted for inflation ($91,400 for 2009, $91,500 for 2010, $92,900 for 2011). In addition, you can exclude or deduct certain foreign housing amounts.

Robin D :

Even if you are out of the US you are to file and use the Foreign Income Exclusion to benefit from not paying tax on the income or you could use the Foreign Tax Credit if the other country also taxes you. The 1099R should bre included on your return but it is not allowed the exclusion. Only earned income can be excluded.

Customer:

I have always filed and paid income tax in Canada as this is the country where I live and have earned income. I was informed I did not need to file in two countries. I now am retired and collecting a pension. This is the first money I have received from the U.S. since I moved away in 1969. I really did not understand your answer.

Robin D :

Even if you have lived in Canada and filed your taxes there ,you as a US Citizen, were to continue to file your US returns. The 1099R you received is taxable and needs to be shown on your US return as well as any other income. Now US has a tax treaty with Canada and it ensures that for pensions the tax home country can tax so your pension you are receiving will not be taxed by the uS too but there are reporting requirements. The 1099R you received from the inheritance is taxable to the US and you should file the US return.

Robin D :

Here is a good place for tyou to statrt reading if you do not think I am steering you in the right direction
http://www.irs.gov/publications/p54/index.html

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7426
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 8 other Tax Specialists are ready to help you

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