Maroof HS CPA Professional Corporation, Toronto

Checklist: U.S. Individual Tax Returns

U.S. individual tax filers, please use this checklist

Please use the below checklists to arrange the information for the preparation of U.S. personal tax returns.

  1. Starting information & Filing Status – All the individuals filing U.S. Tax returns must provide this. 
  2. Information required from 1040 Filers 
  3. Information required from 1040NR Filers
  4. Dual-Status aliens additional information who moved from Canada to the U.S.
  5. Dual-Status aliens additional information who moved from the U.S. to Canada

U.S. citizens living in Canada follow the 1040-Filers checklist. Green cardholders have the option of dual-status or nonresident aliens using treaty tie-breaker, however, must discuss the same with the tax preparer. 

New: BOI reporting under CTA is mandatory now, please find more information here. 

Starting information

(Required from all the individuals, both 1040 and 1040NR filers)

Please provide the below information for spouse(If filing jointly) and dependents(If you can claim someone as a dependent).

  • Full Legal Name: First name and middle initial, Last name (Same as it appears on SSN)
  • Date of Birth/Social Security Number (SSN)/Tax Identification Number (TIN)
  • Mailing Address: Street No., Apt. No., City/Town, State, Postal code, Country name.
  • Contact details: Email Address, Phone number, and fax number
  • Occupation
  • Marital status
  • Bank account number/Routing number (To receive the refund via direct deposit) along with the proof of bank account. 
  • Did you own any interest in virtual currencies during the tax year?
  • Record of estimated tax payments during the year
  • If the IRS has issued an identity protection PIN?

Identity Verification – applicable to all U.S. filers

All taxpayers who are filing U.S. income tax returns, 1040 or 1040NR, must verify their identity with us.

  1. Two pieces of photo identification, showing your name and address. At least one ID must be government issued and have a photo and the address. If the second ID does not have an address on it, proof of address is required. Proof of address can be a lease agreement, bank statement, utility bill, or insurance document.
  2. Copy of Social security card or ITIN letter. If the name on your social security card is different than the one on the return, please confirm if you have updated your information with SSA. This can result in the rejection of the electronic transmission of your tax return.
  3. If you do not have access to a printer and you are not visiting our office in person, knowledge-based authentication (KBA) will be applicable at the time of authorizing electronic filing. If you have access to a printer and are able to print 8878 or 8879, you can send a scanned copy of the document. (Not applicable for paper returns such as those attached with ITIN or submitted under Streamline offshore procedures). 

Your filing status and type

Please select one (as discussed during the discovery call)

  • Resident aliens, U.S. citizens, and Green Card holders:  Filing Status (Single, Married Filing Jointly, Married Filing Separately, Head of household, or Qualifying surviving spouse)
  • Non-resident filers (1040-NR): Single, Married filing separately, or Qualifying surviving spouse (Joint returns cannot be filed)
  • Dual-Status Aliens who are non-residents alien at the end of the year, please choose 1040NR filing status. Single, Married filing separately, or Qualifying surviving spouse (Joint returns cannot be filed)
  • Dual-status Aliens who are residents at the end of the year: No joint filing unless married to a U.S. citizen or a resident alien may elect to file a joint return with a spouse.
  • Snowbirds filing closer connection statement

1040 Filers

(U.S. Citizens, green cardholders, and resident aliens)

For all 1040 filers

  • Starting information: Basic information as mentioned previously
  • If you are a U.S. citizen, green cardholder, and resident alien, certain income is re-sourced due to the treaty. If your Canadian tax returns are prepared by us, you do not have to worry about this. If they are being prepared by someone else, please ensure to get us a detailed file from that tax preparer. 
  • U.S. information slips, please provide a listing with the issuer name and information slip type, and attach the slips received such as:
    • W2, all 1099s (1099, 1099B, 1099INT, 1099DIV, 1099-OID, 1099-R, 1099-K, 1099-G, 1099-S, 1099-SA, 1099-LTC, SSA-1099, RRB-1099, 1099-MISC, etc) scheudle K-1s, 
    • 1040-ES, the record of estimated tax payments made during the year.
  • All Canadian information slips
    • T4, T4A, T4E, T4A-NR, T3, T5, T5013, T5008, T4A(P), T4A(OAS),T4RSP, T4RIF, T5007, NR4, Or any other slip 
    • If your Canadian tax returns are prepared by us, please follow an additional separate checklist.
  • Rental income and expenses (Ask for a spreadsheet)
  • Self-employment income and expenses. (Ask for a spreadsheet)
  • Capital gains/disposition
    • Please review all T5008s, and 1099-Bs, and ensure that costs or cost basis are available. 
    • If you moved to or from Canada while holding any of the assets reported on your 1099B, or T5008s, please highlight those transactions or list them separately.
    • Expenses related to your investments 
    • Transactions involving cryptocurrencies 
  • Any other income or losses, such as Alimony paid or received, hobby income and expenses, jury duty records, prizes and awards, gambling income, trust income, or any other income. Please discuss this if you see any item you see on schedule 1 or schedule 3 to ensure that you are getting the best optimization. 
  • HSA and IRA contributions: 5498-SA and 5498 series forms.
  • Standard deduction vs itemized deduction: If you prefer itemized deduction rather than a standard deduction, please provide more information on items such as medical and dental expenses, state and local realty and personal property taxes, home mortgage interests and points, gifts, and charitable donations, casualty and theft losses, and other itemized deductions. Ask us to provide a separate document checklist to you. 
  • For childcare expenses, please provide all the receipts. 
  • Education expenses: please provide 1098-T from educational institutions, 1098-E for payments of student loan interest, receipts for the qualified educational expenses, and a list of any scholarships you received. 
  • Sale of primary residence in the U.S. or Principal residence in Canada.
  • If you lived worked or have a property in the federally declared disaster area, please discuss the same with us.

International Reporting Requirements 

U.S. citizens, green card holders, and resident aliens are subject to onerous reporting requirements for their foreign assets and income. If the information returns, forms, or schedules are not filed on time, substantial penalties apply. While we only mechanically process your tax returns based on the information provided by you. If there is any missing information, that leads to missed filings, the tax consequences can be serious. Many penalties start from $10,000. 

  • List down your assets located outside the U.S. and please provide them at the time of tax preparation. Also, list the assets you own through partnerships or other entities as well. If any of these assets result in additional filings that were not discussed at the time of quote preparation, you can expect additional costs. Some of those costs can become substantial. 

To assist you to determine preliminary reporting requirements, all 1040 filers must provide the below information:

(Please note this is applicable to most common situations, this is not a checklist to determine your full compliance requirement, ensure to list down all investments, assets, and income as previously mentioned).

  1. Foreign bank accounts and financial accounts: If the aggregate value of all of your financial accounts exceeds US$ 10,000 at any point of time year, you are subject to FinCen114 filing requirements (FBAR). This also includes joint accounts or accounts with singing authority. For more information on FBAR and what kind of assets require reporting, please go through this information in its entirety so as not to miss any asset.
    • Please prepare a spreadsheet or a chart (or ask to provide one) with columns: Bank name, bank account number, type of account, bank address with postal code, the currency of account, maximum balance during the year, is the account opened or closed during the year, and any other note for us. 
  2. Specified Foreign Assets (form 8938): If you hold specified foreign assets that meet threshold requirements, please provide the details:
    • For those who live in Canada (at least 330 days in Canada): last day $200,000 and the max during year 300,000 (joint filers double this amount)
    • For those who do not live outside the U.S. (do not meet 330 days outside the U.S. test): last day $50,000 and 75,000 max during the year (double these amounts for joint filing). 
  3. If you have any Canadian TFSA or RESP, please provide the statements. Please provide the statements for the whole year. If you do not have consolidated statements, please summarize the periodic statements. Form 3520/3520-A filings may add additional charges if the information is not organized by the client. 
  4. If you hold any Canadian (or any other country other than the U.S.) domiciled Mutual funds or ETFs:
    • You may be subject to PFIC rules and file form 8621. Please arrange the statements for the full year 
  5. Foreign Corporations:
    • If you own shares of foreign corporations for example Canadian corporations, you may be subject to form 5471 filing requirements. Refer to Form 5471 quick overview to determine if you meet this requirement.
      • If you have a 5471 filing requirement, please provide prior years’ 5471 schedules and current year Financial Statements and Corporate income tax returns from Canada. We shall be sending further information requests when we receive these two items. 
    • If your Canadian corporation is a Controlled Foreign Corporation(CFC) you are subject to further rules such as GILTI, Subpart F Income, and Section 956. If you require section 962 election, please discuss these matters further with us. 
    • If you transferred any assets, in cash or kind, you must disclose them to us to ensure if Form 926 requirements are met. 
    • Please note if your foreign corporation is not a CFC, it might be a PFIC. So discuss it before skipping the requirements. 
  6. Foreign partnerships, if you have an interest in certain foreign partnerships (Non-US), please discuss your interests with us to determine if form 8865 is required. 
  7. Foreign branches and disregarded entities – Form 8858. Post TCJA, foreign rental properties may also require this information return, please discuss with your tax preparer. 
  8. Any interest in foreign trusts
Please note that determining compliance requirements and ensuring that an accurate complete return is filed is ultimately your responsibility. If you do not provide the information you may not have a reasonable cause defense against the hefty penalties. Start with the above basic questions. 
If the above is not discussed with you at the time of quote preparation or initial discovery calls, please discuss the costs involved before proceeding. If you were non-compliant in previous years and discovering these requirements now, you should discuss this before preparing your current tax return. 

Past tax records (Important)

  1. Your Canadian income tax returns (T1) and notice of assessments for all the taxpayers who are part of the U.S. tax return. If your Canadian tax returns are prepared by us, no need to provide the same. 
  2. Your prior year U.S. income tax returns, with all schedules and forms, and worksheets showing carryovers. Generally, this is the package provided by your previous firm. 
  3. If you have form 5471 or 8865 as part of your engagement, please ensure that all the schedules of these forms are attached. 

1040-NR Filers

(Non-Resident Aliens)

All 1040-NR filers must submit the below information:

  1. Starter information, as listed above. 
  2. Your filing status: either single or married filing separately. 
  3. Last year’s U.S. federal and state tax returns, along with all forms and schedules (if any). 
  4. Specific information as required below:
    • Country(ies) of citizenship 
    • Country of tax residence during the tax year 
    • Did you ever apply for a U.S. green card?
    • Were you ever a U.S. citizen or green card holder?
    • Did you have a U.S. visa on 12/31/20xx? If yes, please provide the visa type.
    • Did you ever have a U.S. Visa or immigration status? If yes, please provide the date and nature of the change.
    • Dated of entry and exit in the current tax year (2023)
    • The total number of days physically present in the U.S. in 2023, 2022, and 2021 (current year, and previous two years). Please calculate the total days. 
    • Did you file a U.S. tax return before? Please provide the last year when it was filed and what form was used.
    • Did you receive a total compensation of $250,000 or more during the current tax year? If yes, did you use an alternative method to determine the source of income?
  5.  Please attach all of your U.S. information slips such as W2, 1099, 1042S, 8805, Schedule K-1, or 8288A, etc.
  6. Some of the specific, and most common tax returns require the below information. 

Specific instructions for most common situations:

Employment income 

If you are filing a U.S. tax return because you had employment in the U.S. and you remained a Canadian tax resident during that period, below are the information requests:

  1. Copy of W2 issued by your employer.
  2. If you are a daily commuter to the U.S. from Canada?

Disposition of an Interest in U.S. Real Property

  1. If your sale of the property was subject to withholding requirements, please attach form 8288-A
  2. Closing statement, HUD1, or sale agreement. If you provided the same at the time of the ITIN application to us, no need. 
  3. Your basis in the property, and the depreciation claimed over the period. If you do not know how to calculate please ask for help from your tax preparer. 
  4. Your selling expenses 

Rental Income

  1. A spreadsheet showing income and expenses. Please total the similar expenses into categories. 
  2. Did anyone withhold taxes on the rental income, please provide the slips issued by them. 
  3. Is this your first year of rental income? If yes, information for 871(d) election. We’ll try to complete it ourselves with the information available to us. 

Partnership income 

  1. Please attach Schedule K-1, K3, and 8805 received from the partnership. 
  2. If your previous year’s taxes were not prepared by us, we require the previous year’s tax returns and schedules. 

Note for Treaty Tie-Breaker

If you are using the U.S.-Canada tax treaty to tie break in the favor of Canada i.e. claiming Canadian tax residency in Canada and tax non-residency in the U.S., please discuss with us. 

  1. You may not be required to file 8938 and 8621
  2. Modified reporting requirements of form 5471. 
  3. You do not need to include Subpart F, GILTI, and PFIC income. 

If you have filed 1040 as a green card holder, using treaty tie-breaker rules may subject you to exit tax. Please ensure the discussion around this with your tax preparer at the firm. 

Important to know that you are excluding income from U.S. taxation but you will be still subject to reporting requirements. 

Dual-Status Alien – 1040 Filers

(If you moved from Canada to the U.S.)

  • Select the date of change of residency.
    • It can be the first day you were present in the U.S. as a green cardholder. or
    • the first day when you were present in the U.S. and met the Substantial present test in the current year.
    • the first day you were present in the U.S. but did not meet the substantial presence test and you want to make the first-year choice election. 
  • Please provide basic starting information and filing status.
  • Please provide all the information as required for 1040 filers.
  • Review the International Reporting Requirements section of 1040 carefully and list down all the assets. 
  • Are you making a first-year election? The first-year election has eligibility criteria and a procedure must be followed. 
  • Dual-status Statement, a 1040NR is prepared and attached as a statement to your regular tax return. Please follow the requirements of 1040NR filers for the period you were ‘not’ a resident of the United States. 

Dual-Status Aliens – 1040NR Filers

(If you moved from the U.S. to Canada)

  1. The date you became a non-resident of the United States, generally when you become a resident of Canada. 
  2. Provide starting information and filing status. 
  3. Split the year into two parts: one as a resident alien, and the other one as a non-resident alien. 
  4. For the part of the year you were a resident alien, please provide information same as 1040-filers as mentioned above. 
  5. For the non-residency part, please provide the information listed under 1040NR filers. 

Warning for Green Cardholders: If you file a Dual-Status return and meet conditions as set out in IRC 877 and 877A, you may be subject to expatriation tax where your assets will be marked to market. You can quickly overview Expatriation Tax here. If this is your first year as a green card holder and you were not prepared for emigration from Canada, please discuss your options. 

Fatima Aslam

Fatima Aslam

Fatima Aslam writes exclusively for Maroof HS CPA Professional Corporation and Innovation Hub on common topics related to business.

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Fatima Aslam

Fatima Aslam

Fatima Aslam writes exclusively for Maroof HS CPA Professional Corporation and Innovation Hub on common topics related to business.

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