We help U.S. expatriates, Canadian residents and businesses understanding and complying with their U.S. Federal and state tax obligations. We also offer our U.S. cross-border tax expertise directly to other Canadian professionals and their clients.

Since October 2010, Bluecarp Tax Consulting has helped hundreds of individuals and businesses located in Victoria, on Vancouver Island, in Vancouver, in other regions of British Columbia as well as in the Province of Alberta, in other parts of Canada and in the United States.

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Our U.S. tax services for individuals.

When possible, we will electronically file all your personal tax returns with U.S. Federal and state tax authorities, including any extensions and report of Foreign Bank and Financial Accounts ("FBAR").

U.S. tax compliance for U.S. citizens, greencard holders, treaty-tie breakers living in Canada, such as:

  • Federal form 1040, including Treaty Article XXIV(4) calculation

  • Federal form 114/8938: disclosure of non-U.S. financial accounts

  • Federal form 3520/3520-A: disclosure of Canadian TFSA

  • Federal form 5471: disclosure of non-US corporations, including Canadian CCPC

  • Federal form 8621: disclosure of PFIC, such as Canadian mutual funds and junior mining companies

  • Federal form 8833: treaty-based position disclosure, including when working in the United States

U.S. tax compliance for Canadian residents with U.S. tax filing obligations, such as:

  • Federal form 1040NR

  • Federal schedule D: reporting of capital gains and losses

  • Federal schedule E: reporting of U.S. real property rental income

  • Federal form 8233: exemption from U.S. withholding on compensation

  • Federal form 8288-B: exception from FIRPTA withholding

  • Federal form 8833: treaty-based position disclosure, including when working in the United States

  • Federal form 8840: closer connection exemption statement, including for Canadian snowbirds

Our recent U.S. tax consulting projects for individuals:

  • Purchase, rental or sale of U.S. real property;

  • Trust reporting (including for a Canadian estate freeze);

  • Year of departure/expatriation issues;

  • Streamlined filing compliance procedures, delinquent FBAR submission procedures and delinquent international information return submission procedures; and,

  • Contesting penalty notices and drafting reasonable cause requests (including for Federal form 5471).

Our fee structure for individuals.

Any applicable taxes and nontrivial disbursement costs (such as mailing, courier and software recovery charge) will be added to our invoice when applicable.

Effective January 1, 2020, a surcharge of fifty percent (50%) of the total professional fees will be automatically added when initial information is provided with two (2) weeks of a tax compliance deadline.

Our fees structure is transparent and always takes into account your right to know about how and what we charge you for. We normally provide quotations for U.S. tax compliance services based on a fixed fee basis rather than an hourly rate.

$800CAD for U.S. citizens, U.S. greencard holders including treaty tie-breakers living in Canada and U.S. resident, plus when required to be filed:

  • Federal form 114/8938: no additional charge

  • Federal form 3520/3520-A: $400CAD each

  • Federal form 5471: $500CAD each

  • Federal form 8621: $150CAD each

  • Federal form 8854: $1,500CAD for the first 5 hours, hourly rate basis thereafter

  • Dual status filing: $500CAD

  • Registered plans qualifying under Revenue Procedure 2020-17: $300CAD each

  • Schedule K-1 reporting: no additional charge

  • Treaty Article XXIV(4)&(5) calculation: $300CAD

  • Treaty-based disclosure: no additional charge

  • State tax filings: $300CAD per state

No additional charge for married filing jointly status.

$400CAD Canadian residents with U.S. tax filing obligations, plus when required to be filed:

  • Federal schedule D: $500CAD per property

  • Federal schedule E: $300CAD per property

  • Federal form 8233: $150CAD

  • Federal form 8288-B: $500CAD each

  • Federal form 8840: no additional charge

  • Schedule K-1 reporting: no additional charge

  • Treaty-based disclosure: no additional charge

  • State tax filings: $300CAD per state

When a U.S. real property is jointly owned, the professional fees for the second Canadian-resident owner is discounted by 50 percent.

Questions & answers for individuals.

The content below is provided for general information purposes only and does not constitute tax or other professional advice or an opinion of any kind.

If you have a general knowledge question you would like us to answer for the benefit of other readers, please email us.

Q&As for U.S. citizens, U.S. greencard holders and treaty tie-breakers living in Canada

Q. As a U.S. citizen living in Canada, am I entitled to the 2020 Economic Impact Payment?
A. Yes, U.S. citizens living outside the United States are eligible for the CARES Act payment as far as they otherwise met the other eligibility criteria. While the payment will not be includible in gross income for U.S. income tax purposes, it will more likely be considered taxable income under Canadian income tax rules.

Q. What is a Treaty Article XXIV(4)&(5) calculation?
A. As described in the Technical Explanation of the Treaty, the calculation "addresses the fact that a U.S. citizen resident in Canada remains subject to U.S. tax on his worldwide income [...] and may, therefore, be subject to U.S. tax at a higher rate than a resident of Canada who is not a U.S. citizen. In essence, these paragraphs limit the foreign tax credit that Canada is obliged to allow such a U.S. citizen to the amount of tax on his U.S. source income that the United States would be allowed to collect from a Canadian resident who is not a U.S. citizen." This awkward computation needs to be made prior to filing your Canadian personal income tax return if you have U.S. source income, such dividend income from a U.S. corporation (even if the stock is held within a Canadian brokerage account) or rental income from a U.S. real property.

Q. I left the United States without surrendering my U.S. greencard. Am I still require to file a U.S. tax return while living in Canada?
A. As a U.S. greencard holder, you are considered a U.S. tax resident and as such, while living outside the United States, you are still required to file a U.S. income tax return (including Federal form 1040NR if you are treated as a dual resident under the U.S.-Canada Tax Treaty) and to report non-U.S.bank and financial accounts on Federal form 114.

Q&As for Canadian residents with U.S. tax filing obligations

NEW Q. I am a Canadian resident selling goods using Amazon Marketplace. Am I required to file a U.S. personal income tax return?
A. Generally, you are engaged in a U.S. trade or business if you perform any U.S. activity (even remotely) on a regular, continuous, and substantial basis. Once you are engaged in a U.S. trade or business, you are required to file a U.S. personal tax return even if (a) you do not have income which is effectively connected with the conduct of a trade or business in the United States, (b) you do not have income from sources within the United States, or (c) the income is exempt from income tax by reason of an income tax convention or any section of the Internal Revenue Code.

Questions & answers for individuals.

The content below is provided for general information purposes only and does not constitute tax or other professional advice or an opinion of any kind.

If you have a general knowledge question you would like us to answer for the benefit of other readers, please email us.

Q&As for U.S. citizens, U.S. greencard holders and treaty tie-breakers living in Canada

Q. I have a Registered Retirement Savings Plan or RRSP. Do I need to report it?
A. You will more likely have to report it on Federal form 114 and possibility in part VI of Federal form 8938 but you do not need to separately report the assets held by the plan. Starting with the 2014 calendar year, Federal form 8891 is not required (Revenue Procedure 2014-55) but we recommend you to separately track contributions to determine the taxable component of any future distributions.

Q. I set up a Registered Education Savings Plan or RESP for my children. Do I need to report it?
A. You will more likely have to report it on Federal form 114 and possibility in part VI of Federal form 8938. Starting with the 2019 calendar year, you do not need to file Federal form 3520 for the RESP (Revenue Procedure 2020-17) unless it is a large family RESP. However, you still need to determine and report the taxable income generated by the RESP as well as to comply any PFIC reporting requirement.

Q. I opened a Tax-Free Savings Account or TFSA. Do I need to report it?
A. You will more likely have to report it on Federal form 114 and possibility in part VI of Federal form 8938. However, TFSAs do not qualify under Revenue Procedure 2020-17 because they do not operate exclusively or almost exclusively to provide, or to earn income for the provision of, medical, disability, or educational benefits. Therefore, you will need file Federal form 3520 and a substitute Federal form 3520-A, to determine and report the taxable income generated by the RESP as well as to comply any PFIC reporting requirement.

Q&As for Canadian residents with U.S. tax filing obligations

Q. I did not keep track of my days of presence in the United States. What can I do?
A. As a starting point, check your travel history report on the I-94 website of the U.S. Department of Homeland Security.

Our U.S. tax services for businesses.

When possible, we will electronically file all your business tax returns with U.S. Federal and state tax authorities, including any extensions and informational tax returns.

U.S. tax compliance for U.S. entities, such as:

  • Federal form 1120

  • Federal form 1065

  • Federal form SS-4: application for an EIN

  • Federal form 940 series: U.S. wage and tax statement

  • Federal form 114/8938: disclosure of non-U.S. financial accounts

  • Federal form 1042/1042-S: reporting of payment to non-U.S. persons

  • Federal form 1099: reporting of certain payments to a U.S. person

U.S. tax compliance for non-U.S. entities, such as:

  • Federal form 1120

  • Federal form 1065

  • Federal form SS-4: application for an EIN

  • Federal form 1042/1042-S: reporting of payment to non-U.S. persons

  • Federal form 1099: reporting of certain payments to a U.S. person

  • Federal form 8833: treaty-based position disclosure, including when doing business in the United States

Beside U.S. tax compliance and consulting projects, we also assist businesses with:

  • Sales and use tax research (as well as ongoing sales and use tax compliance);

  • General bookkeeping and notice to reader engagement; and,

  • Chief Tax Officer ("CTO") services on a seasonal or part-time contract basis (minimum of 100 hours annually per project).

Our fee structure for businesses.

Any applicable taxes and nontrivial disbursement costs (such as mailing, courier and software recovery charge) will be added to our invoice when applicable.

Effective January 1, 2020, a surcharge of fifty percent (50%) of the total professional fees will be automatically added when initial information is provided with two (2) weeks of a tax compliance deadline.

Our fees structure is transparent and always takes into account your right to know about how and what we charge you for. We normally provide quotations for U.S. tax compliance services based on a fixed fee basis rather than an hourly rate.

$900CAD or $750USD for Federal form 1120, Federal form 1065 and Federal form 1120-F (branch with U.S. source income or state proforma), plus when required to be filed:

  • Stand-alone state tax filings: $300CAD or $250USD per state

  • Combined state tax filings: starting at $600CAD or $500USD per state

Any bookkeeping or notice to reader work will be part of a separate engagement and billed separately.

$400CAD for Federal form 1120-F (treaty-based or Schedule K-1 only), plus when required to be filed:

  • Schedule K-1 reporting: no additional charge

  • Treaty-based disclosure: no additional charge

  • Stand-alone state tax filings (treaty-based or Schedule K-1 only): $200CAD per state

  • Stand-alone state tax filings (non-confirming): see state proforma above

Any bookkeeping or notice to reader work will be part of a separate engagement and billed separately.

Questions & answers for businesses.

The content below is provided for general information purposes only and does not constitute tax or other professional advice or an opinion of any kind.

If you have a general knowledge question you would like us to answer for the benefit of other readers, please email us.

Q&As for U.S. and non-U.S. entities

Q. I do not have a U.S. social security number ("SSN"). Do I need to obtain an individual taxpayer identification number ("ITIN") prior to submitting a Federal form SS-4 application for my business?
A. Unless you are otherwise eligible to obtain an ITIN (e.g. you are earning rental income from a US real property you own personally), the Service will still issue an EIN even if you cannot obtain an ITIN. Just write “NOT ELIGIBLE” on line 7b of Federal form SS-4 and submit the EIN application on its own.

Q. My business does not have any physical nexus/connection with a state. Is my business still required to collect sales tax in that state?
A. Whether your business is organized in the United States or in Canada, it might be required to collect sales tax in a state even if it does not have any physical nexus/connection. As of June 2018, the right of each state to tax remote/online sales is determined under their respective post-Wayfair tax legislations.

Q&As for non-U.S. entities only

UPDATED Q. My Canadian corporate business starts making sales to U.S. customers. Is there a U.S. Federal tax filing requirement?
A. Generally, you are engaged in a U.S. trade or business if you perform any U.S. activity on a regular, continuous, and substantial basis. Once you are engaged in a U.S. trade or business, you are required to file a U.S. corporate tax return even if (a) you do not have income which is effectively connected with the conduct of a trade or business in the United States, (b) you do not have income from sources within the United States, or (c) the income is exempt from income tax by reason of an income tax convention or any section of the Internal Revenue Code.

Q. My Canadian business files a treaty-based U.S. Federal income tax return. Is my business liable for state income tax?
A. Generally, a business that creates a taxable connection (or nexus) for state income tax purposes is required to file a state income tax return (including a protective PL 86-272 filing). While several states do offer the same treaty-based protection (there would be no income tax liability in these states), many actually do not (such as Arkansas for example). It is therefore possible for a Canadian business not to be liable for U.S. Federal income tax while being subject to state income tax.

Get in touch.

A balanced work-life schedule is so important to us: our weekdays office hours are between 9:00am and 1:00pm.

BLUECARP TAX CONSULTING LTD.
Suite 300 | 848 Courtney Street
Victoria, British Columbia V8W 1C4 | Canada

E. connect@bluecarp.ca | P. +1 (778) 244.7900

In order to keep space for client work, we do not always pick up our phone during office hours: email works best with us. If you were to leave a voicemail, we aim to respond to it within one (1) business day.

Q. Where is our business name coming from?