I am a US citizen living in Ontario — do I still have to file US taxes every year?
Yes. The United States taxes its citizens on worldwide income regardless of where they live — a policy distinct from most countries, including Canada. As a US citizen residing in Ontario, you must file a US federal tax return (Form 1040) every year your income exceeds certain thresholds, even if you have no US-source income. This is a US legal obligation and is not affected by Canadian law.
You will also likely have Canadian filing obligations as an Ontario resident. The Canada-US Tax Treaty and the US Foreign Earned Income Exclusion (Form 2555) or Foreign Tax Credit (Form 1116) are the main tools used to reduce or eliminate double taxation. Most Ontario residents who are US citizens owe little or no net US tax after applying these mechanisms, but the filing obligation remains.
You may also need to file FBAR (FinCEN 114) annually if you have Canadian bank accounts above the US dollar threshold, and potentially FATCA forms. Penalties for missed FBARs can be severe. Cross-border tax specialists with US and Canadian credentials (often called dual-qualified advisers) handle these situations routinely.
Key takeaways
- US citizens abroad must file a US tax return annually regardless of residency
- Canadian tax credits generally prevent double taxation under the treaty
- FBAR filing is required for qualifying Canadian bank accounts
- Work with a dual-qualified Canada-US tax adviser for these situations