Overseas Ties in a Military Community
Box Elder families often have international connections: a spouse who grew up in Canada, Germany, Japan or Korea, a previous tour overseas, a bank account abroad or children born on a foreign base. Defence contractors may take assignments overseas. Each brings rules for income, accounts and residency. BOMCAS works with Box Elder clients who have Canadian or international ties remotely; as a firm based in Edmonton, we know the Canadian side well.
Treaty and residency basics are on our statewide cross-border tax page, and this page applies them to Box Elder families with spouses, accounts or assignments abroad.
Spouses From Other Countries
A non-citizen spouse who is not a US resident can be treated as a resident for the whole year by election, allowing a joint return. Once elected, their worldwide income is taxable in the US, so a spouse with income or investments in their home country should consider the effect carefully. A spouse without a Social Security number needs an ITIN before filing jointly.
Accounts Overseas
Families who kept bank accounts from a tour in Germany or Japan, or a spouse who holds accounts in their home country, must file an FBAR if the combined balances exceed $10,000 at any point in the year, even if the accounts earn nothing. Larger holdings may also require Form 8938. Foreign mutual funds and pensions can bring additional reporting.
Contractors Overseas
Civilian contractors working abroad may qualify for the foreign earned income exclusion if they meet the bona fide residence or physical presence test, and may claim foreign tax credits for taxes paid to the host country. Military members and federal employees cannot use the exclusion on government pay.
Canadian Connections
For families with a Canadian spouse or Canadian accounts, we review the treaty, RRSPs and TFSAs, Canadian pensions and Canadian property. A Canadian spouse who lived in Canada before the move may need a final Canadian return to report departure and any deemed disposition of property.
Children Born Abroad
Children born overseas to American parents need Social Security numbers to be claimed for the child tax credit. We make sure each child is properly documented on the return.
What We Handle
- Joint returns with a non-resident spouse election.
- FBAR and Form 8938.
- Foreign earned income exclusion and foreign tax credits.
- Canadian departure and non-resident returns.
Orders Overseas
Box Elder families who receive orders to Europe or Asia keep filing US returns as usual, and military pay keeps its normal treatment. A spouse who works on the local economy abroad, however, may owe host-country tax under the status of forces agreement rules, and foreign tax credits or the foreign earned income exclusion may apply to that income.
Gifts and Inheritances From Abroad
Families who receive money from relatives overseas should know that gifts or inheritances from foreign individuals totalling more than $100,000 in a year must be reported on Form 3520. The gift is generally not taxable, but the penalty for not reporting it can be large.
Foreign Pensions
A spouse who worked before marriage in Canada, the United Kingdom or elsewhere may have a pension there. Some treaties give that pension special treatment, while others treat it as a foreign trust or investment that needs reporting. We review each plan before the first year it appears on a US return.
A pension that is not reported correctly in the first year often leads to years of amended returns, so we look at the plan documents and statements before filing.
Box Elder Cross-Border Tax Questions
Can I file jointly with my spouse who is not a US citizen?
Yes, by electing to treat them as a US resident. Their worldwide income then becomes taxable in the US.
Do I need to report my old bank account in Germany?
If your combined foreign accounts exceeded $10,000 at any point in the year, an FBAR is required.
Can a defence contractor overseas exclude their pay?
Possibly, under the foreign earned income exclusion if they meet the residence or presence test. Military pay does not qualify.
Does my Canadian spouse need to file in Canada?
Possibly, for the year they left Canada and for any Canadian income after.
Talk to BOMCAS About Cross-Border Tax in Box Elder
The U.S. filing is usually a personal return, or a business return for a company with foreign owners. Businesses selling abroad keep books and payroll here and still file local sales tax. Plan before an overseas move, and use late filing for missed years. If you also have work in other parts of the state, our South Dakota pages on business returns, personal returns, sales and use tax, bookkeeping, payroll, tax planning and late filing sit under the state overview.
Tell BOMCAS about your Box Elder business or household and we will reply with next steps and what we need for a quote. Use the contact page or the form below, call 780-667-5250 or email info@bomcas.ca. All Box Elder services are on the Box Elder overview. This page is general information, not advice for your situation.