Some Relief For Expats Filing US Tax Returns

Americans living in Canada can’t escape paying U.S. taxes, but they can reduce the cost of filing a return.

American Tax Man - iStock

 

SPEND SMART | If you’re an American citizen resident in Canada (or know someone who is), you know from the ruckus in the press last year that you’re required to file two income tax returns annually: a Canadian one because you live here, and a U.S. one because you are an American citizen and the U.S. taxes on the basis of citizenship rather than residency.

Never mind the fairness issue, or that people such as Republican presidential candidate Mitt Romney game the system by legally parking their jillions in accounts in the Cayman Islands and Switzerland, you still need to file—and unless you’re familiar with the U.S. tax code, you will require professional assistance. This service can cost plenty in Canada, which is why some filers head south.

My expat American friend has her U.S. tax returns prepared over the border in Bellingham, Washington, where the pros at H&R Block specialize in doing taxes for Americans living here. While it’s hard to ballpark the overall cost because each filer’s tax situation is different, Bellingham H&R preparer Frank Scarpa says he’s rarely done a return where the fee was more than $400 and has done some for less than $200, where only a T4 slip was involved.

H&R offers a free consultation to get things started, and Scarpa says although it’s good to have this meeting face to face, sometimes it isn’t possible. My friend had her taxes done long distance using FedEx, the phone and the Internet; she received her completed ready-to-mail-in forms (plus a photocopy for her records) by registered mail.

Of course some financial situations may be too complex to go this route, but for most expat filers, H&R will probably be enough. —Ruth Rainey

In Bellingham, Washington, H&R Block is located at #110-1155 E Sunset Dr., 360-733-0700. Visit www.hrblock.com

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