American spouses FATCA

[thegorchess]

Here is a petition to sign if you are as upset about this as I am

petition.ndp.ca/FATCA

Also I thought it would be nice to have a place to discuss the implications of FATCA. My main concern is that I can't have a joint account with my American husband because of this. He can't work right now so what happens if I die? How will he pay the mortgage, etc. The banks would cut off access to my accounts once they heard of my death.

 

[sariss]

I don't really know much about this - what in this act makes you unable to have a joint bank account with your American husband? We had a joint account through TD when my husband was my boyfriend, and we hadn't started processing his PR application yet.

 

[thegorchess]

Any joint assets have to be reported to the IRS. From what I understand they will all be included as the American's assets. In our case he could be expected to pay tax on my earnings, meanwhile he has none of his own. Joint assets are to be reported to the IRS by the CRA. I find it very offensive that the Canadian government is attacking its citizens privacy on behalf of another country.

There have been reports of Americans renouncing their citizenship because of this. My husband plans to once he becomes a Canadian citizen, but that will be way off in the future.

I found out about the petition from my MP.

 

[scylla]

I don't understand why you think you can't have a joint account with your husband. (FYI - my husband is an American citizen and a Canadian PR.)

Just to make sure you're clear on what FATCA is about, it's not introducing a law that says your husband has to report joint assets. That law already exists from a US perspective - and whether FATCA goes ahead or not isn't going to change that.

Provided you do your income taxes correctly on both sides of the border - you shouldn't be double-taxed on anything. My husband and I have a fair amount of assets both north and south of the border. The biggest pain in the you-know-what is the process of filing taxes. But we certainly aren't double-taxed on anything.

Again, all FATCA does is makes it easier for the US to find out about assets Americans have in Canada (that's why people have issues with it from a privacy perspective). The law that says American have to report these assets already exists and has existed for a long time.

 

[keesio]

Provided you do your income taxes correctly on both sides of the border - you shouldn't be double-taxed on anything. My husband and I have a fair amount of assets both north and south of the border. The biggest pain in the you-know-what is the process of filing taxes. But we certainly aren't double-taxed on anything.

True in theory but a pain in the arse to execute. For example I need to report all business travel in the US since wages earned during those days are considered US source income (even though I am paid by my Canadian employer). Those days considered US sourced income are not covered under the FEIE and FTC. So I need to pay US taxes on that. But I already got income taxes deducted by the Canadian govt. What to do? Well since I have to file my Canadian taxes first, I file them first (and pay those taxes). Then I file my US taxes and report that US sourced income and have to pay taxes on that earnings to the US also (which may or may not be offset by leftover credits from the FTC). After I pay those taxes to the IRS, I can then go back to CRA and show them I was double-taxed and file for a refund on that to get some of those tax dollars back from CRA. I usually don't bother with the last step unless I paid a substantial amount in taxes on that US sourced income because of all the extra hassle to get it. So yes, I allowed myself to get double taxed there when I could have filed for an additional refund. That is my main issue with US tax laws. Not that I have to report my foreign assets and not even that I have to file something. But the fact that filing is so complex. Yes FATCA is not a big deal if you look at it individually.... but it is just ANOTHER thing the US govt throws at us. And FATCA is basically redundant... basically the same info is reported in your FBAR. So I rage against FATCA more because it is just another thing to deal with.

 

[scylla]

And FATCA is basically redundant... basically the same info is reported in your FBAR. So I rage against FATCA more because it is just another thing to deal with.

Totally agree. FATCA doesn't really change that much. Things are already incredibly irritating. FATCA is just one more reminder of how irritating...

I sometimes joke that I would have reconsidered marrying my husband if I had fully understood the implications of US citizenship and taxation. Luckily my husband has been an expat for a couple of decades - so he's got a pretty good handle on the tax situation.

He also still owes me big time for 2 hours of my life I'm never getting back that we spent in the IRS office in King of Prussia, PA trying (and failing) to get an ITIN for me. This happened three years ago and I still hold it over his head every few months. Painful.

 

[keesio]

Luckily (or not) my wife is also American so we are in the same boat together

Does your husband file his own taxes or does he use an accountant? I'm curious how many expat Americans actually do their own taxes. I know computergeek does. I tried once a while ago to do it myself and just didn't want to deal with it. But I'm much more knowledgeable now so I'm thinking of giving it another crack sometime.

 

[thegorchess]

Yikes. For me the issue was privacy and principle. Now this seems incredibly complicated to boot! All the more reason for me to never have joint assets/accounts. I want to remain untouchable.

 

[scylla]

Luckily (or not) my wife is also American so we are in the same boat together

Does your husband file his own taxes or does he use an accountant? I'm curious how many expat Americans actually do their own taxes. I know computergeek does. I tried once a while ago to do it myself and just didn't want to deal with it. But I'm much more knowledgeable now so I'm thinking of giving it another crack sometime.

We've been doing our own taxes - but I think this year may have been the breaking point. It's just getting too complicated (or maybe we're too lazy). My husband has investments in the US that generate interest, dividends and cap gains. And of course the dividend classes in the US don't seem to align at all to those in Canada for taxation purposes. We both have interest income in Canada - and I also have div and cap gains generated in Canada. Additionally, he has rental income in the US (more than one property). On top of that my husband is also a self-employed consultant with business expenses. Bundle all of that together and you have a big fat mess. So we are going to break down and hire someone for next year. We may also have them look at this year's to see if there's stuff we missed and could have claimed.

 

[Alurra71]

Yikes. For me the issue was privacy and principle. Now this seems incredibly complicated to boot! All the more reason for me to never have joint assets/accounts. I want to remain untouchable.

You will never be 'touchable' by the US, unless you get US citizenship. To separate yourself totally from your spouse for income tax purposes certainly seems a bit over the top, considering as stated before, this is not a NEW thing just starting, it has been around for many years now. You and your husband are not the only cross border spouses, i mean this is an immigration forum afterall, and many deal with the issues surrounding taxes and all the happy stuff that goes along with said taxes but they certainly don't isolate themselves from their other half.

If something as trivial as taxes makes you want to keep yourself separate and apart from your husband, perhaps you might reconsider marrying outside of Canada as someone from any other country is likely going to come with some sort of 'strings' attached by virtue of being from a country OTHER THAN Canada.

I am glad my husband never considered keeping himself separated from me in any part of his life because of tax issues, and yes, he was/is well aware of FACTA and all that being married to me, a US Citizen, entails.

 

[screech339]

It is a royal pain in the butt when it comes to filing US taxes. I was employed in US for 5 years before I have had enough of working there. Immigration issues was the driving factor in moving back to Canada, even though I really enjoyed working at the US company and could have been a long term employee there too. Other than immigration issue, I had no choice to move back.

The only issue I have is having to deal with US taxes once my two kids starts working. They are dual citizens and even if they made little money or no money, they will lose out while filing taxes since accountants charges way too much to file US taxes for you. What's the point of filing taxes if it will cost you an arm and a leg to file. Damn if you do, damn if you don't.

Once the kids get old enough, I will strongly advise them to renounce their US citizenship. Having a US citizenship does not give them any special privileges that Canada doesn't have. They can travel almost anywhere without a visa required. They only have to report their income based on residency. Canada university tuitions are way cheaper than US universities cost. The only advantage of having a US citizenship is the ability to work in US without any visa required.

 

[scylla]

You will never be 'touchable' by the US, unless you get US citizenship.

Very true (US citizenship or green card status). I tried to get myself an ITIN as a "Canadian living in Canada married to an American" and that was a big failure (and two hours of my life I'm never getting back). So I can say first hand that the US has absolutely no interest in keeping track of me - which is fine by me!

 

[BubbOZ]

With the volume of applications from the US, I wonder if all the couples are aware of their new-found tax obligations...:/

It's probably not high on their list of priorities during the immigration process, but it's good to know what's around the corner.

Nwz... Here's another petition by Overseas Republicans:
https://www.abolishfatca.com/live/

Here is a petition to sign if you are as upset about this as I am

petition.ndp.ca/FATCA

Also I thought it would be nice to have a place to discuss the implications of FATCA. My main concern is that I can't have a joint account with my American husband because of this. He can't work right now so what happens if I die? How will he pay the mortgage, etc. The banks would cut off access to my accounts once they heard of my death.

 

[thegorchess]

Thank you for posting that. Hopefully it is recalled.

 

[keesio]

I wouldn't hold my breath that it will get recalled. Neither US party has any desire to repeal FATCA. The only faction that has really spoken out against it is the Tea Party (Rand Paul, etc).