U.S. Tax Filing for Americans in Toronto

Toronto has a large American and dual-national community across finance, tech, healthcare and academia, including many who have lived in Canada for years. Canada and the U.S. have a comprehensive tax treaty, but several everyday Canadian savings accounts are treated very differently by the IRS than by the CRA.

Typical situations we see in Toronto

• TFSAs: tax-free in Canada, but the U.S. generally does not recognise the shelter and may treat it as a foreign trust, which can mean additional filings (potentially Forms 3520 and 3520-A).
• RRSPs: the U.S.–Canada treaty generally allows deferral of U.S. tax on growth, but reporting still applies and the election matters.
• Canadian mutual funds and ETFs held in non-registered or TFSA accounts that may be PFICs (Form 8621).
• Dual U.S.–Canada citizens who have lived in Toronto for years and are catching up on U.S. filings.
• Multiple Canadian bank and investment accounts that together cross the FBAR threshold.

TFSA and RRSP, treated differently

RRSPs generally benefit from treaty-based deferral of U.S. tax on internal growth, while TFSAs often do not get equivalent treatment and can carry foreign-trust reporting. Canadian funds inside either account may also be PFICs. Getting the reporting right helps avoid costly missed forms. Atamatax provides preparation support; this is not individualized advice.