Advising Americans in Canada: The US Filing Checklist for Wealth Firms

Canada has one of the largest populations of Americans abroad, and many of them are clients of Canadian advice firms without the firm thinking of them as cross-border. A US citizen in Toronto files a US return every year, and several standard Canadian accounts look very different from the IRS side.

This checklist covers the US side only. Coordinate the Canadian return with the client's Canadian accountant as usual.

A TFSA full of Canadian ETFs is a sensible plan for a Canadian client. For an American client, the same account can mean US tax every year and PFIC filings for the funds inside. The product recommendation is where this is cheapest to fix.

1. FBAR (FinCEN Form 114)
   Required when the combined value of accounts outside the US exceeds $10,000 at any point in the year. Canadian bank, brokerage, RRSP, RRIF, TFSA and RESP accounts all count. Preparers need each account's maximum balance in the year.
2. Form 8938 (FATCA)
   Filed with the US return above $200,000 at year end or $300,000 at any time for a single filer living abroad, double for joint filers. See FBAR vs Form 8938.
3. RRSPs and RRIFs: deferral is automatic
   Since Revenue Procedure 2014-55, eligible US taxpayers get US tax deferral on RRSP and RRIF growth automatically, and Form 8891 is no longer filed. The accounts still go on the FBAR and, above the thresholds, Form 8938.
4. TFSAs are not tax-free for the US
   The treaty deferral does not extend to TFSAs, so income and gains inside one are generally taxable in the US each year. Some preparers also treat TFSAs as foreign trusts with extra filings. Agree the approach with the US preparer before an American client opens or funds one.
5. RESPs carry US tax and reporting
   Income in an RESP is generally taxable to a US subscriber as it is earned, government grants can count as income, and RESPs are commonly treated as foreign trusts with Forms 3520 and 3520-A. Consider whether a non-US family member should be the subscriber.
6. Canadian funds and ETFs are usually PFICs
   Canadian mutual funds and ETFs are generally PFICs for a US person. Inside an RRSP or RRIF, the treaty deferral means no current PFIC tax and no Form 8621. In TFSAs, RESPs and non-registered accounts they bring punitive default tax and usually a Form 8621 for each fund. See our PFIC explainer.
7. Check US broker access
   US custodians often restrict accounts once a client's address is in Canada. If a letter has arrived, use our advisor playbook for restricted accounts.
8. Confirm who files
   Identify the client's US preparer and agree when your firm sends the account data they need, including maximum balances for every Canadian account.

Checking one client quickly? Our free Expat Client Exposure Check flags custodian, FBAR, Form 8938 and PFIC risk in six questions.

Unless your firm has US tax expertise, leave preparing and signing the US return to a qualified US preparer. Your role is making sure the financial picture is complete and that account and product choices do not create US problems the client never saw coming.

Aequify gives the US preparer what they need from a Canadian client: FBAR maximum balances, Form 8938 figures and possible PFIC holdings flagged, in one tax-ready data pack. See how Aequify works for advice firms.

This article provides general information for advisers, not tax or legal advice. Rules and thresholds change, so confirm them with a qualified tax adviser for each client.