U.S. Cross-Border Tax Services for Individuals

US Tax Services

As cross-border ties between Canada and the United States continue to grow—through dual citizenship, employment, investment, or family connections—navigating the tax landscape between the two countries has never been more important. At Modern Axis CPA, we offer tailored U.S. cross-border tax services for individuals to help you stay compliant and avoid costly mistakes.

Key takeaways

  • U.S. citizens and green card holders in Canada must file Form 1040 (worldwide income) and a Canadian T1 return — only the Canada–U.S. tax treaty and Foreign Tax Credit prevent double taxation.

  • Canadians with U.S. rental income file Form 1040NR; without a Section 871(d) election, gross rents face flat 30% withholding instead of taxation on net income.

  • Selling U.S. real estate triggers FIRPTA withholding — 15% of the gross sale price withheld at closing, recoverable on the 1040NR if actual tax owed is lower.

  • Renouncing U.S. citizenship requires a dual-status final 1040, Form 8854, and may trigger the exit tax if net worth exceeds $2 million or average tax liability exceeds the inflation-adjusted threshold.

Whether you’re a dual citizen, a Canadian with U.S. rental income, or a non-resident earning income from U.S. sources, we have the expertise to assist.

Who We Help

At Modern Axis, we work with a wide range of clients who face U.S. tax filing obligations:

  • U.S. citizens or green card holders living in Canada

  • Canadians earning U.S.-source income (such as rental or pension income)

  • Snowbirds spending part of the year in the U.S.

  • Canadians investing in U.S. real estate or securities

  • Non-residents with U.S. rental income or dispositions of U.S. property

  • Individuals seeking to correct past non-compliance through voluntary disclosure programs

Our U.S. Tax Services

🧾 U.S. Form 1040 & 1040NR Filings

  • Form 1040 is required for U.S. citizens, green card holders, and tax residents regardless of where they live.

  • Form 1040NR is for non-residents with U.S. income, such as rental or business income, or the sale of U.S. real estate.

We’ll ensure your return reflects applicable tax treaty benefits and that you’re not overpaying U.S. tax where a credit is available in Canada.

🌍 FBAR (FinCEN Form 114) Compliance

If you’re a U.S. person with foreign financial accounts totalling more than $10,000 USD at any time during the year, you’re required to file an FBAR. This includes Canadian bank accounts, investment portfolios, and even jointly held accounts.

At Modern Axis, we handle FBAR filings with care and discretion to ensure compliance and avoid penalties.

Common Cross-Border Tax Challenges We Solve

✅ Dual Filings & Double Taxation

Canadian residents who are U.S. citizens must file both a Canadian and U.S. return. Our goal is to optimize foreign tax credits and avoid double taxation using the Canada–U.S. tax treaty.

✅ Rental Properties in the U.S.

Own a condo in Arizona or Florida? Whether you’re renting it part-time or full-time, we can assist with 1040NR filings, Section 871(d) elections, and rental income optimization.

✅ Disposing of U.S. Real Estate

Selling U.S. property? You may be subject to FIRPTA withholding. We handle the necessary forms and guide you through the recovery or reduction of withheld amounts.

✅ Renunciation & Exit Tax

Renouncing U.S. citizenship? We’ll help you prepare the final dual-status return, Form 8854, and address any expatriation tax issues that may arise.

✅ Delinquent Filings & Voluntary Disclosures

Fallen behind on your U.S. filings? We guide clients through the Streamlined Foreign Offshore Procedures and other IRS amnesty programs to help you catch up without penalties.

Why Work with Modern Axis CPA?

At Modern Axis, we’re not just Canadian CPAs—we understand the complex interplay between U.S. and Canadian tax systems. Cross-border tax is a highly specialized field, and you need someone who knows how to navigate both sides of the border.

We’ll help you:

  • Determine your U.S. tax filing obligations

  • File 1040 or 1040NR returns accurately

  • Ensure proper FBAR reporting

  • Avoid common treaty pitfalls

  • Understand and minimize your cross-border tax burden

Whether you’re catching up on prior filings, dealing with current obligations, or planning for the future, we provide practical advice that aligns with your financial goals.

Need Help Navigating U.S. Cross-Border Taxes?

From 1040 and 1040NR filings to FBAR reporting and general cross-border tax planning, Modern Axis CPA is here to support you. We offer individualized guidance and can help you make confident decisions—wherever you reside.

Let’s simplify your U.S. tax obligations so you can focus on what matters most.

Get in touch today to book a free discovery call and learn how we can help.

Frequently asked questions

Who needs U.S. cross-border tax services?

U.S. cross-border tax services are essential for U.S. citizens and green card holders living in Canada, Canadians earning U.S.-source income (rentals, pensions, business income), snowbirds spending part of the year in the U.S., Canadians investing in U.S. real estate or securities, and anyone catching up on past non-compliance through the IRS Streamlined Procedures. Each category triggers different filing obligations — Form 1040, Form 1040NR, FBAR, Form 8938, or some combination.

What's the difference between Form 1040 and Form 1040NR?

Form 1040 is the U.S. resident return — required for U.S. citizens, green card holders, and substantial-presence-test residents on their worldwide income, regardless of where they live. Form 1040NR is the non-resident return, filed by non-U.S. persons reporting only U.S.-source income such as rental income, pensions, royalties, or gains from U.S. real estate. The treaty determines which return applies in dual-status years and edge cases — getting it wrong creates double taxation.

What is FIRPTA withholding on U.S. real estate sales?

FIRPTA (Foreign Investment in Real Property Tax Act) requires the buyer of U.S. real estate from a foreign seller to withhold 15% of the gross sales price at closing and remit it to the IRS. The amount withheld is a deposit against the seller's eventual tax liability — not the tax itself. The Canadian seller files Form 1040NR to report the actual gain, calculate tax owed, and claim back the overpayment. Form 8288-B can reduce withholding upfront with advance IRS approval.

Should Canadian owners of U.S. rentals make a Section 871(d) election?

Usually yes. Without the election, gross U.S. rental income is taxed at a flat 30% withholding — no deductions allowed, no Schedule E. With a Section 871(d) election, the rental is treated as effectively connected with a U.S. trade or business, letting you deduct mortgage interest, property tax, depreciation, repairs, and management fees. Net income is then taxed at graduated rates. For most rentals after expenses, the net result is dramatically lower U.S. tax.

What's the exit tax for renouncing U.S. citizenship?

The expatriation tax under IRC section 877A applies to "covered expatriates" — those with net worth above $2 million USD, average tax liability above an annually indexed threshold, or who fail to certify five years of tax compliance on Form 8854. Covered expatriates face a deemed sale of worldwide assets at fair market value on the day before renunciation. The mark-to-market gain above an inflation-adjusted exemption (around $821,000 for 2023) is taxed immediately.

Can I catch up on missed U.S. tax filings without penalties?

Yes, for non-willful failures. The IRS Streamlined Foreign Offshore Procedures let qualifying U.S. expats file 3 years of Form 1040 returns and 6 years of FBARs, generally with all penalties waived. You must certify your failure was non-willful. The program is available only before the IRS opens an examination or contacts you. Coming forward voluntarily is the difference between full penalty exposure and a clean compliance record — often the single most valuable cross-border engagement.

Alex Ataman, CPA
Founder
Modern Axis CPA