Filing US taxes from out of country with no income to claim?

March 21, 2005 7:51 AM

I'm not sure how to file my taxes. I am a US citizen living in Canada. I am a stay-at-home mother and I have no income to claim this year.

On the one hand, I've heard even if I don't make any money outside the US, I must file every year I'm not living in the US so the IRS has a record that I have not claimed any income. On the other hand, all the info I am finding about filing US taxes from out-of-country focuses on how to file if you make any income outside the US.

I am on a visitor's visa until I get permanent residency. My husband is Canadian and lists both me and our son on his taxes here in Canada.

I am not sure I can use the EZ-1040 or TeleFile like I usually do if I'm not living in the US (and what about my son - do I need to claim him when I have no income and my husband is claiming him in Canada?). Do I need to use another form if I'm not claiming any income anyway? Do I even need to file if I haven't made any money? Should I just file a form full of zeroes and use a US address (the last place I lived before moving here) since I'm not a permanent resident yet?

posted by Melinika to work & money (19 comments total)

The IRS says don't file if you're married filing separately and made under $3100. There's more info in the 1040 instructions.
posted by smackfu at 8:00 AM on March 21, 2005

The official IRS "Do I need to file?" page.
posted by WestCoaster at 9:28 AM on March 21, 2005

Canadian living in the U.S. here, so I have a little knowledge of cross-border tax shenanigans.

Really, it can't hurt to file, even if it is a "form full of zeroes". (Aside: Really? No bank interest, stock dividends, etc?) And the full 1040 isn't that frightening either. In you situation, I would just send them a form saying, in effect, "Look, I earned nothing/a pittance", and put your new Canadian address at the top. Things get more complicated if you actually owe tax in one or both countries, of course, but thankfully you don't have to deal with that, at least this year.
posted by Johnny Assay at 9:59 AM on March 21, 2005

(Disclaimer: I am not a tax lawyer.)
posted by Johnny Assay at 9:59 AM on March 21, 2005

Um, can I piggyback a bit?

Why do US citizens living abroad have to pay taxes at all? If someone doesn't live or work in the US, why would they owe the government anything? Wouldn't your country of residence get your income tax? Is it just Social Security?
posted by scazza at 11:22 AM on March 21, 2005

Are you sure you don't "live in the US"? Obviously you know where you live, but where are you a legal resident for tax purposes? If you're on a visitor's visa in Canada, the answer isn't Canada, so it's probably still the US. Which means the answer to your question is probably the same as it would be if you lived in the US.

Scazza: American citizens have to pay US taxes no matter where they live. Forever. (As I understand it). Though of course they can probably deduct taxes paid to other countries or such.
posted by duck at 11:28 AM on March 21, 2005

Oh, and if you earned nothing or next to nothing, I would file in both countries anyway. If your income is very low you might get some money back (e.g. a GST refund in Canada, which doesn't depend at all on how much you've paid in). Yes, you can get money back even if you haven't paid any in. I got refunds larger than what I paid in both the US and Canada this year.
posted by duck at 11:35 AM on March 21, 2005

Yes, thank you, I am aware of that duck. I am confused as to why.
posted by scazza at 11:35 AM on March 21, 2005

scazza: Sorry...I didn't mean to be a snark.

I don't know the answer to your question, but it may be related to the fact that it seems (I think) like many benefits in the US (medicare, welfare, medicaid voting etc.) are also tied to citzenship. So US citizens can come back anytime they want and start eating up money. And if they're going to have the benefits of citizenship, they should have the responsibilities, too.

In Canada (I don't know about other countries) these are tied to residency, so if you're living outside the US you can't just show up and decide to vote and get free healthcare.
posted by duck at 11:41 AM on March 21, 2005

That should be "if you live outside Canada, you can't just show up (in Canada) and decide to vote and get free healthcare."
posted by duck at 11:42 AM on March 21, 2005

Why do US citizens living abroad have to pay taxes at all?

Bluntly, so that Mr. Rich Guy can't move to the Caymans or some other nearby friendly place just to avoid paying taxes, and especially taxes on investments. Likewise, the IRS will charge you a pretty penny if they think you're giving up US citizenship in favor of some tax-shelter country's just to avoid taxation, or State will not agree that you've really renouncing it.

There are hefty exclusions, provisions for tax credits for foreign income taxes, and so on. For most people, you'd file a tax form saying "I made $55000 in Foreignland, where I live, and the exclusion is $80000, so eat shit, IRS." With the tax credits and deductions, only a very few people would end up owing more total taxes than they would have owed to just the US.

Think of it as a bullshit filter.
posted by ROU_Xenophobe at 11:53 AM on March 21, 2005

Definitely file, even if it's all zeros. If you need to file one day in the future, the sudden appearance of a return when there was none in prior years will set off red flags at the IRS. Filing with the US will also provide you with evidence if Canada decides to hassle you.

Also, don't throw any records away, ever. Living in between different countries' systems sometimes puts you in a strange legal status that can make your life hell in the future. I have one friend who is currently in a tax dispute with Germany (where he hasn't lived in a decade) over liabilities from 1988, and another who needs to come up with tax returns and proof of foreign residence going back to 1991.
posted by fuzz at 12:22 PM on March 21, 2005

Well, to address the first and second comments - which, by the way, contradict each other in their answers, which is why I'm asking this question to begin with because I can't find a straight specific answer anywhere:

Yes, I did read the 1040 form before asking here. It says not to file under those circumstances if I live in the US. It doesn't cover filing or not filing if you're not living in the US, which I heard (like I said in the question) means I should file even if I have no income. And if I do, it doesn't tell me if I'm okay to use the EZ form or TeleFile which is what I've used for years.

And yes, I did look at irs.gov before asking here also, and oh look, that tells me I *should* file, but again doesn't address my particulars; as I implied in the question, I think I probably should file, but what is the best way to go about it? That is why I asked here. I was hoping for perhaps some personal experience/specific informational knowledge to help me untangle what I should do.

Thank you for your answer, Johnny Assay, I do think that it's better to have something on record than not, I'm just not quite sure how to go about it (and yes, really, no income).

Thank you for yours, duck, I have been living in Canada since before my son was born, and I had to give up my NYS license for an Ontario one, but no, I am not sure what my official address is if I'm still renewing a visitor's visa every six months, and I am getting contradictory answers on that also, which complicates matters further. Canada sometimes seems to think my official residence is here, the US sometimes seems to think I live there, and both seem to think vice versa, depending on the situation, so I really do feel quite betwixt and between. If my husband is claiming me here, and I really do live here, I would think that Canada is my official address, but without the perm. res. does the US think otherwise? Does Canada think otherwise?

And thank you, fuzz, because that is what I am worried about, again, I am just not sure how to do it without screwing it up and causing (more!) problems and complications.
posted by Melinika at 12:38 PM on March 21, 2005

Melinika, I'm in the same boat as you (US citizen living in Canada).

While living in Canada I had to file in Canada, although I wasn't yet a legal resident (I had a visitors record and work permit).

In 2002 I made enough to file in the US as well and did so. In 2003 I had to file in Canada, but didn't make enough to have to file in the US, so I didn't. This last year (2004) I didn't make any money, so I don't have to file in either country.

FYI it took 38 months for my Landed Immigration to come through. Good luck!
posted by deborah at 1:19 PM on March 21, 2005

I think I probably should file, but what is the best way to go about it?

File like normal, except it'll be chock full of lovely zeroes. Start with zero income and work your way down a 1040EZ or 1040 to come up with zero tax due. Claim your kid if he has an SSN, not that it'll make any difference. It'll maintain the record of his existence as your dependent.

For your address, don't worry about what your "official" residence is. Just write down where you live, and let the IRS worry about it. If for bureaucratic reasons best left unexplored they want your old US address or your family's address or some other address where you don't live, they'll send you a letter and ask you for that information.

The only time this would get complicated would be if you had income in Canada that you wanted to exclude; then you'd apply the residency tests in the relevant packets and forms.
posted by ROU_Xenophobe at 2:02 PM on March 21, 2005

When I first moved to Australia, I was on a temporary resident visa, but a US citizen. I had an accountant in Australia do my taxes for both countries for me. He was an American living in Australia, too. He had been a lawyer and CPA in the US and was a CPA in Australia, so I felt comfortable that he could navigate both countries' tax codes. He said I was required to file taxes for the US no matter what, unless I denounced my US citizenship. Granted, I had foreign income to declare and you don't, but the US gives you "credit" on your US taxes for any tax you pay in another country. So, in essence, I didn't pay double taxes, I just had to report everything to both countries.

In your specific case, I would imagine you still need to file taxes in the US - regardless of what visa you are currently carrying. My suggestion would be to try and find someone similar to who I found to do your taxes for both countries. After the first time, you can just "copy" what they've done for the following years. Cost me A$400 for the first year, but the peace of mind was worth it. I did that for seven years, and have been back in the US for two, filing regular taxes here and haven't had any problems so far.
posted by cyniczny at 5:23 PM on March 21, 2005

I am a U.S. citizen. If I move to Canada to live and work there as a Canadian permanent resident, do I pay both U.S. and Canadian Taxes? From the IRS FAQ. See also, IRS Publication 54, Tax Guide For U.S. Citizens and Resident Aliens Abroad. I hope those help.
posted by mokujin at 8:01 PM on March 21, 2005

Well, if I were working, and if I were a permanent resident, it would help. But I'm not, and I'm not, like I stated in my question, so. The guide did not have specific info applying to me either when I checked it before posting here. It'd certainly be nice if a link to irs.gov gave me an easy and definitive answer, but as I have already explained, I didn't find anything there, and that is why I turned to AskMeFi.

The implication from a few of these comments that I didn't do basic research before asking here, and the further implication that the commenters did not read what I stated when I asked since those comments do not apply to me anyway based on the details I've given, is really not helpful.

Thank you for your answers, deborah, ROU, and cyniczny. I appreciate it!

MeFite jacquilynne kindly let me know that she would ask her mother for some info, and got back to me with her mother's advice that I call one of H&R Block's offices near a border (Buffalo or Toronto) and ask them my questions. She says it's a toll-free number. I will be trying that. Thanks again, jacquilynne.
posted by Melinika at 8:57 AM on March 22, 2005

Okay, I believe this is the consensus view. If there are errors, anyone is welcome to speak up:

I am not sure I can use the EZ-1040 or TeleFile like I usually do if I'm not living in the US.

You can certainly use the EZ-1040. If you got a Telefile booklet in your name, you can file that way even though your address has changed.

What about my son - do I need to claim him when I have no income and my husband is claiming him in Canada?.

In general, you can only claim someone as a dependent if you provided more than 50% of his/her financial support for the year. In any case, it's not clear that claiming a dependent will make any difference: you did no work and paid no taxes so you can't get a refund.

Do I need to use another form if I'm not claiming any income anyway?

The 1040EZ can be used when filing with no income.

Do I even need to file if I haven't made any money?

No, but if you subsequently do file, the IRS may ask you about the missing years. Given the small amount of time needed for filing, you might just want to go ahead and do it.

Should I just file a form full of zeroes and use a US address (the last place I lived before moving here) since I'm not a permanent resident yet?

If you do file, yes, you should put zeros. But use your Canadian address - there isn't any need to use you last US address, particularly since the USPS forwards mail for only 12 months. It wouldn't hurt to file a change of address form with the IRS. The purpose of the address is if the IRS wants to contact you; this doesn't have to be your "official" address in any formal sense.
posted by WestCoaster at 2:34 PM on March 22, 2005