2026 Canada / U.S. Tax Calendar

In the year you become a Canadian tax resident, you report worldwide income only from your entry date to December 31. Income earned before your arrival is generally excluded, but your T1 must note your residency start date. If your cost of foreign financial property exceeded C$100,000 on December 31, T1135 may also be required (see below). We recommend booking a consultation to confirm your exact residency start date and filing scope.

If the total cost of your 'specified foreign property' exceeds C$100,000 on December 31, you must file T1135 alongside your T1 or T2. Specified foreign property includes foreign bank deposits, foreign brokerage accounts, and foreign real estate not used for personal use. Penalties for late or missed filing start at C$25 per day with no cap. We recommend reviewing your holdings before the filing deadline.

If you are a U.S. tax person (citizen, green card holder, or substantial-presence test met) and the aggregate balance of all foreign financial accounts exceeded US$10,000 at any point in the calendar year, you must file an FBAR (FinCEN 114). Chinese bank and brokerage accounts count. The FBAR is a disclosure form — no additional tax is owed — but penalties for non-willful failure can reach US$10,000 per year, and willful failure carries far higher penalties. Multi-year non-filers should consider the IRS Streamlined procedures; book a consultation to discuss.

A TFSA grows tax-free in Canada but the U.S. does not recognize that exemption. Mutual funds and ETFs inside a TFSA are frequently classified as PFICs (Passive Foreign Investment Companies) for U.S. tax purposes, triggering Form 8621 reporting and potentially punitive excess-distribution tax rates. The TFSA itself may also constitute a foreign financial account requiring FBAR and Form 8938 disclosure. Green card and U.S. citizen holders of TFSAs should speak with a cross-border CPA to evaluate whether to hold, restructure, or wind down the account.

It depends on your residency status. If Canada is your primary home (you have a lease, bank account, driver's licence, or other residential ties), the CRA will likely treat you as a tax resident and require you to report worldwide income. Even non-resident students with Canadian-source income (employment earnings, scholarships, etc.) generally must file a T1 and may be entitled to withholding refunds. Filing can also generate GST/HST credits and other benefits. Confirm your residency status before your first filing.

Under ITA section 116, a non-resident who disposes of taxable Canadian property must notify the CRA in writing within 10 days of the sale and provide an estimated gain calculation. If the seller does not notify, the buyer must withhold 25% of the purchase price and remit it to the CRA. The non-resident ultimately files to report the actual capital gain; any over-withholding is refunded. The process involves obtaining a Certificate of Compliance, and timing matters — plan with a CPA before signing any purchase agreement.

Yes. Under FIRPTA, the buyer must withhold 15% of the gross sale price (or 10% for sales between US$300,001 and US$1,000,000) and remit it to the IRS. The actual tax owed is based on the capital gain; if the withholding exceeds the tax liability, the seller files a 1040-NR and claims a refund. Sellers who expect their actual tax to be well below the withholding amount can apply to the IRS for a reduced withholding certificate before closing. Contact a CPA before signing to plan accordingly.

If you received gifts from foreign individuals totalling more than US$100,000 in a calendar year, you must file Form 3520 with the IRS. The form is a disclosure — the gift itself is not treated as income and no U.S. federal income tax is owed on receipt. However, penalties for missing Form 3520 are steep: 5% of the gift amount per month, up to 25%. In Canada, there is generally no gift tax on recipients, though any investment returns generated by the gifted funds must be reported. Book a consultation to verify the correct handling for your specific situation.

Do not ignore it, but do not panic either. CRA and IRS correspondence ranges from routine requests for information to formal audits, and each type calls for a different response. Keep the original letter, note the response deadline (commonly 30 days), and assess what is being requested. If the letter involves adjustments to a prior return, a significant balance, or an audit, involve a CPA or tax lawyer before replying to avoid inadvertently complicating the matter. We represent clients before the CRA and IRS — book a consultation if you have received a letter.

Non-filing is a technical violation, but remediation programs exist and acting early reduces the cost. In Canada, the CRA's Voluntary Disclosure Program (VDP) allows eligible taxpayers to come forward proactively and receive partial relief from penalties and interest. In the U.S., the IRS Streamlined Filing Compliance Procedures allow non-willful non-filers to catch up on three years of federal returns plus six years of FBARs and pay a modest miscellaneous offshore penalty. Both programs have eligibility requirements and are not available to everyone. Book a consultation as soon as possible to identify the best path for your situation.