When (and Why) Canadians should file an 8840 Form

Important Information for our Canadian Residents.
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When (and Why) Canadians should file an 8840 Form

Post by webmaster » March 28th, 2011, 2:23 pm

Every year there is a lot of angst and confusion surrounding the requirement for Canadians to file the dreaded 8840 Form :o :oops:

There is much miss-information published and spread by word of mouth about this topic. Many don't understand the need to do so and some even appear to take offense that they are being asked to file.

So, here are the facts............

The first thing to understand, is that we are guests in the US and therefore subject to U.S. Law. Although we might not understand the reasons, if we fail to comply with the law, there can be serious repercussions and the fact that we are Canadians will not change that. As many of us spend multiple years here every winter, failure to properly file with the IRS can lead to having to hire a tax lawyer at great expense.

The second thing we need to understand is that if we meet the "Substantial Presence Test" as determined by the IRS, we MUST file a tax return, whether or not we have earned any income in the US. The purpose of the 8840 form is to claim a closer connection to another country (i.e. Canada) and thereby become exempt from having to file a tax return (1040NR).

Flow Chart showing how this is all tied together.................... :!:

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You can download a printable copy at: http://www.mycanyonvista.com/canadians_and_the_irs.pdf. It also contains links to the IRS Website to read what they have to say and to download the necessary forms.

At the simplest level, if you are a US resident for tax purposes as determined by the "Substantial Presence Test", you must file a tax return. The 8840 form allows you to claim a closer connection to Canada and thereby exempting you from this requirement.

It is important to note that if you earn money is the US, you must file a tax return and pay tax on that money. This includes interest from a savings account or most importantly, any rent you might earn if you rent your park model out while you are away. :roll: It is also interesting to note, that if you make money selling your park model (i.e. receive more than you paid for it), that is considered capital gains and you must report it and pay the appropriate tax. If you owe tax, you must file a 1040NR and you cannot file an 8840 to avoid it.

Check out this link for more information http://www.irs.gov/Individuals/International-Taxpayers/Substantial-Presence-Test

Download the 1040NR form here: https://www.irs.gov/pub/irs-pdf/f1040nr.pdf
Download the 8840 form here: https://www.irs.gov/pub/irs-pdf/f8840.pdf
Mail your competed 8840 form to:

Department of the Treasury
Internal Revenue Service
Austin, TX 73301
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Canyon Vista Residents Group

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Re: Canadians should file an 8840 form

Post by webmaster » January 19th, 2015, 8:48 am

Update - January 2015

Canada and the United States Border Service are now officially sharing data so they will know for sure when we enter and leave the US. Although we all should have been submitting the 8840 form, now for sure, you need to do so! It is very simple to complete and just costs a stamp to send in. Form can be downloaded at http://www.irs.gov/pub/irs-pdf/f8840.pdf
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