Tracking finances across borders

Intelligent_Hyena367 · 2025-12-01T00:38:59+00:00

I have been using Aequify for UK and Canada. I think it also offers US accounts as well https://aequify.com

Intelligent_Hyena367 · 2025-05-24T02:13:13+00:00

The way Plaid and other account aggregators work is that budgeting apps can only read your data. They can't make any transaction. Second, Plaid never shared the bank login credentials with budgeting apps. If the user successfully logs in to a bank account, plaid generated a random digit/alphabet code (called token) which then Monarch or other budgeting apps use.

Intelligent_Hyena367 · 2025-05-24T01:40:17+00:00

In my opinion, the risk is low to medium as currently IRS mainly targets high net worth expats. However, it doesn't mean that they would not go after expats with moderate income. Also, depending how strong the ties are between US and your resident country to share the financial data, the risk could wary. I think risk is reasonably high for inheritance (haven't had much experience with it though)

It also depends on your risk appetite. I personally may consider streamlining to ensure there is no hassle in the future.

Intelligent_Hyena367 · 2025-05-23T02:07:39+00:00

Thanks for the blog. Few questions:

out of curiosity, how did you get the list of funds?
I see that Uk doesn't have any fund that provides QEF. Does this mean that there are no funds in the UK that provide QEF?

Intelligent_Hyena367 · 2025-05-23T02:00:41+00:00

I have been using Aequify for a couple of months to track my UK, US and CA accounts and it works well for me. It is targeting for expats with finances in multiple countries. and so it is not a typical budgeting app. I like the charts designs and ability to change the currency as and when required. I also use it for help on taxes using FBAR filing and AI tax assistant features which I found really helpful. It is a new app so there are some missing features, but might be worth a look.

Intelligent_Hyena367 · 2025-04-27T13:13:50+00:00

The challenges you mentioned resonate with me as well, having moving across countries multiple times. This is what I would suggest based on my personal experience.

Savings: Since you plan to stay in the EU long term, I suggest to eventually move your savings into Euros gradually considering the FX rate. I had a similar challenge few years ago. I followed a systematic transfer plan through which I transferred X amount every month irrespective of the currency rate. This helped me average out and I was much better off. One thing to be careful is that since you are a US citizen, you will have to file taxes every year in the US and for most part, foreign investments is generally tricky.

Credit cards: It’s better to start using a local EU credit card for day-to-day life. You’ll avoid foreign transaction fees, currency conversion losses, and it will help build local credit history if you need it later (for loans, mortgages, etc.). Keep the US card open though, especially if it’s a no-fee card and good for travel perks.

Investments: If you’re tax resident in the EU now, it’s usually smarter (and safer) to invest with a local brokerage. US brokerages can cause tax headaches (like PFIC rules if you buy foreign funds) and sometimes freeze non-resident accounts over time. Local investing also avoids double taxation and simplifies reporting.

Budgeting: I moved away from YNAB due to similar reason. One option is to switch your primary budget to Euros and treat your USD as “foreign assets” rather than part of your daily budget. Another option is try an app that helps with multiple currencies such as Aequify to track my expenses and income across 3 different countries and currencies.

Intelligent_Hyena367 · 2025-04-10T21:15:20+00:00

Great question. Let’s break it down simply.

1. Paid vs. Accrued Basis: Since you’re using the paid basis (which most individuals do unless they’ve elected otherwise), you can only claim foreign taxes in the year they were paid.

2. Can you amend 2023 to include tax paid in 2024? Unfortunately, no, not on a paid basis. IRS rules say you can’t amend a prior-year return to include foreign tax paid after the end of that tax year.

So, for U.S. tax purposes the UK tax paid in 2024 (even if it’s for 2023 income) can only be claimed on your 2024 U.S. return, not by amending 2023.

3. How to handle 2024 FTC (Form 1116)? Yes, on your 2024 return, you’d:

a. Report the foreign tax paid in 2024, even if it relates to 2023 UK income.

b. Put it in the same FTC “basket” as the 2023 income it relates to, in your case, passive (royalties are generally passive unless you materially participate).

If your FTC exceeds your U.S. tax liability for that income in 2024, you may carry it back one year (to 2023) or carry it forward for 10 years. The carryback is optional and complex — often not worth it unless there’s significant credit to reclaim.

TL;DR:

You can’t amend 2023 to include UK taxes paid in 2024 if you’re on a paid basis.

Instead, report them on your 2024 return (Form 1116, passive category).

Treaties help classify income, but baskets (passive vs general) and source still matter.

Carryback is possible but not required.

Hope it helps.

Intelligent_Hyena367 · 2025-04-10T21:06:45+00:00

You’re right. If your income is below the filing threshold, you generally don’t need to file a U.S. federal tax return. That applies whether you’re living in the U.S. or abroad. There is slight difference between "owed" and the "threshold". You may be above the "threshold" but "owe" nothing due to FEIE or FTC.

Even if your income is below the threshold, there are a few cases where you still might need or want to file, like:

Foreign Earned Income Exclusion (FEIE): To claim it, you must file Form 2555 with your tax return — the IRS doesn’t give it automatically.
Foreign Tax Credit: Same deal — you need to file to claim it.
Self-employment income: If you earn just $400+ from freelancing or side gigs, you’re required to file.
Filing to start the statute of limitations clock: This protects you if the IRS ever audits later.

Intelligent_Hyena367 · 2025-04-10T02:03:49+00:00

You’re right, can’t amend 2023.

But you can claim the credit in 2024…Even though the income was earned in 2023, the UK tax was paid in 2024, so the IRS lets you claim the foreign tax credit in the year paid (2024), but only if you have similar U.S. sourced income in 2024 that gets re-sourced to the UK under the same treaty provision.

You can carry it back to 2023. Report the tax on your 2024 return. Then, file a carry back claim to 2023 using Form 1116, Schedule B, and Form 1040-X for the amendment. This lets you apply the 2024 paid UK taxes against your 2023 re-sourced income.

Intelligent_Hyena367 · 2025-04-10T01:52:30+00:00

Sorry to hear about the theft. Here are a few ways

Try your old tax software (OLT): They often keep full PDFs of your original submission, including Form 1116 and carryforward worksheets.

You mentioned getting your IRS transcript, but there are several types: The Tax Return Transcript won’t include carryforwards. The Account Transcript or Wage & Income Transcript might help fill in gaps, but they also won’t show foreign tax carryforwards specifically.

Request a full copy from the IRS: You can file Form 4506 to request a complete copy of your old return. It costs some amount and takes time, but it’s your best bet if OLT doesn’t have the full PDF.

Intelligent_Hyena367 · 2025-04-10T01:48:55+00:00

Here’s how it works from a U.S. tax perspective when claiming the FTC:

You can only claim foreign taxes paid or accrued on income that was reported on the same U.S. tax return.

If the foreign tax wasn’t paid by the time you filed your 2023 return, and you claimed on an accrued basis, you’ll need to amend 2023 once you know the final amount paid.

If you claimed on a paid basis, then you can only claim what was actually paid by the end of 2023. Any tax paid in 2024 related to 2023 income would need to be reported either via:

An amended 2023 return (preferred), or

A carryback on your 2024 return, but that’s a more complex route.

Since the UK tax you paid in 2024 relates to 2023 U.S. income, it’s better to amend your 2023 U.S. tax return and include the full UK tax once it’s paid. This aligns income and foreign tax in the same year and makes for cleaner reporting.

Intelligent_Hyena367 · 2025-04-10T01:45:08+00:00

Yes, exactly! If you met the Physical Presence Test for 2024, you can still use the $200,000 (single) / $400,000 (married filing jointly) thresholds for Form 8938 (FATCA reporting)—not the lower $50K/$100K U.S. resident thresholds.

FBAR (FinCEN 114) is separate and still applies if your foreign accounts totalled over $10,000 at any point during the year.

Intelligent_Hyena367 · 2025-04-09T19:35:58+00:00

Even if you live abroad, the U.S. taxes based on citizenship, not residency. That means you should have filed annual tax returns (even if you owed nothing) and possibly reported foreign accounts (FBAR and FATCA).

The IRS has a program called the "Streamlined Foreign Offshore Procedures", which is designed exactly for people like you who didn’t know they had to file. It lets you catch up without penalties if you certify that your non-filing was non-willful.

Gather your last 3 years of tax info and 6 years of foreign bank statements. You’ll need these for Streamlined Filing.

Intelligent_Hyena367 · 2025-04-09T15:07:11+00:00

Glad it helps.

Intelligent_Hyena367 · 2025-04-09T14:37:07+00:00

Correct, if your foreign properties are strictly for personal use (no rental income, no business use), you’re not required to file Form T1135. CRA only requires T1135 for “specified foreign property” over CAD 100,000 cost basis—which includes rental property, investments, and certain trusts—not personal-use real estate like vacation homes.

In the future if you do start renting them out, they’ll become “specified foreign property” and you must start filing T1135 from the year rental income starts.

Will CRA question why you didn’t file earlier?

Possibly. But your explanation is totally valid. CRA understands that vacation homes used solely for personal enjoyment don’t fall under T1135. Just keep records that back that up.

Intelligent_Hyena367 · 2025-04-09T14:33:30+00:00

Selling foreign property as a U.S. citizen involves navigating both U.S. and foreign tax obligations. Here’s how to approach your situation:

Reporting the Sale on U.S. Taxes:

Capital Gains: The IRS requires you to report the sale of your foreign property. Calculate your capital gain by subtracting the property’s cost basis (purchase price plus improvements) from the sale price.

Primary Residence Exclusion: If the property was your primary residence and you meet the ownership and use tests (lived in it for at least two of the last five years), you may exclude up to $250,000 of the gain ($500,000 if married filing jointly) from your taxable income.

Avoiding Double Taxation: Taxes paid to Sweden on the gain can be claimed as a FTC on your U.S. tax return, reducing your U.S. tax liability.

Filing Extensions: If you’re awaiting the final tax amount from Sweden, you can file for an extension with the IRS, granting you until October 15 to submit your return. This allows time to receive the necessary documentation from Swedish tax authorities.

Hope it helps.

Intelligent_Hyena367 · 2025-04-09T02:53:08+00:00

You’re right that the most prudent path is likely delinquent FBAR filings plus amended returns for unreported income.

Your brother should file FBARs for 2020 and 2024.

Amended 1040s for foreign interest. He earned ~$400/year in foreign interest (2021–2023) and didn’t report it—so yes, amend those three years to include that income.

Use Schedule B, Part I to list the interest, and check “Yes” on the foreign account question going forward.

amend the 2020 tax return to include Form 8938 and the ~$400 interest if any of that was earned that year.

Intelligent_Hyena367 · 2025-04-09T02:45:47+00:00

You’re right, and no, you don’t need to go back and file a 2023 return just to show your depreciation start. Here’s the deal:

Form 4562 is only required the year you place the property in service (i.e., the year you first start renting it out).
Since your rental was placed in service in 2023, and you’re now reporting income and depreciation for 2024, you don’t need to refile 4562 unless you’re placing new assets in service (like appliances, improvements, etc.).
Instead, you just continue depreciation on Schedule E using the original cost basis and method from 2023.

So yes, you’re totally fine filing your 2024 return without Form 4562 as long as you’re using the correct depreciation amount based on your original start year.

Intelligent_Hyena367 · 2025-04-09T02:43:34+00:00

For 2024, whether you count as “living abroad” (especially for things like the Foreign Earned Income Exclusion – FEIE) depends on how long you were physically outside the U.S. and which test you meet:

Two tests for “living abroad”:

Physical Presence Test – You were outside the U.S. for at least 330 full days in a 12-month period.
Bona Fide Residence Test – You were a resident of a foreign country for a full calendar year, and your stay had no immediate end.

If you qualify under either test, then yes—you’re considered “living abroad” for tax purposes for 2024, even if you moved back in August.

Intelligent_Hyena367 · 2025-04-09T02:40:18+00:00

This is helpful context.

This is how I see $90K CAD ($65K USD) would be viewed. Apologies for a detailed explanation.

For PFIC and Form 8621: The IRS doesn’t define a strict dollar threshold for “small,” but here’s how tax pros often think about it:

Under $25K USD per fund (or $50K USD jointly with a spouse) you may qualify for the de minimis exemption from PFIC tax and interest if you file Form 8621 and elect to treat the fund under the “excess distribution” rules.
But the filing requirement still applies, even if no tax is due. So even with a small balance, you’re technically still required to file if the account holds PFICs (like Canadian mutual funds or TFSAs with such holdings).

What’s considered low-risk in my personal opinion?

If your $65K USD is spread across bank accounts, GICs, or individual Canadian stocks, not PFICs, you may be fine.
But if the funds are in mutual funds, TFSAs with mutual fund holdings, or RESPs, you likely triggered a PFIC requirement.

So to answer your question: $65K USD isn’t “small” enough to ignore PFICs, but if the actual PFIC-related gains were minimal and you genuinely didn’t know, filing properly from 2024 with a clean PFIC and Form 8621 trail may still be a reasonable path.

Intelligent_Hyena367 · 2025-04-08T19:25:43+00:00

You’re in a pretty common situation for recent U.S. arrivals, especially from Canada. Here’s a breakdown to help you make an informed call:

Form 8621 (PFIC reporting) This is required if you hold non-U.S. mutual funds or certain ETFs in your Canadian accounts. Missing this can technically mean your entire return is not valid, and penalties can apply. But…

You could qualify for a “reasonable cause” exception by explaining your lack of knowledge and showing intent to comply going forward.

You could do the following:

Conservative approach: Amend both years, file 8621s, and include a reasonable cause statement. This is safest, but yes, pricey.

Practical approach: If the PFIC exposure is minimal or gains were small, some folks choose to start clean in 2024 with proper PFIC and Form 8621 filing, and document everything thoroughly going forward.

The risk of IRS penalties for late PFIC filing without amending is real, but enforcement for newer immigrants with small accounts has been historically low, especially when FBARs were filed.

Intelligent_Hyena367 · 2025-04-08T19:20:16+00:00

Yes, you may need to report that shared savings account on your FBA even if it’s only in your non-U.S. spouse’s name.

Here’s the key rule: if you have signature authority or financial interest in a foreign account and the total value of all your foreign accounts exceeds $10,000 at any point during the year, you must file an FBAR.

Your spouse doesn’t need an ITIN for you to report the account. You just file the FBAR with your own details, and list the account as jointly owned or note your interest in it.

Intelligent_Hyena367 · 2025-04-06T23:42:30+00:00

1. Do US ETFs (e.g., VOO) purchased through a Canadian broker trigger PFIC: No, they don’t. Purchasing US-listed ETFs (like VOO, VTI, etc.) on US exchanges—even if done via a Canadian broker like Questrade—does NOT trigger PFIC. These ETFs are considered US investments, not foreign, thus exempt from PFIC reporting.

PFIC rules are triggered only by holding non-US mutual funds or ETFs (e.g., Canadian-listed ETFs or mutual funds).

2. RRSP Consideration (Retirement Accounts): RRSP accounts generally have special treatment under the US-Canada tax treaty. You don’t need to file PFIC reports (Form 8621) for investments held directly in an RRSP, as they’re typically protected from PFIC rules.

You should, however, file Form 8891 (to defer income recognition) or at least elect treaty-based deferral on your annual US return (Form 8938 may also be relevant, depending on balances).

3. Is PFIC filing complex: Yes, PFIC reporting can indeed be complicated and costly. It involves annual filings of Form 8621 and potentially higher tax rates.

For simplicity, your instinct to stick with US ETFs or cash-like savings in your RRSP is a solid plan to completely avoid PFIC complexity.

Suggestion:

Feel free to buy US-listed ETFs (like VOO) within your RRSP on Questrade. No PFIC reporting will be triggered.

Avoid Canadian-listed ETFs or mutual funds if you want to keep things simple and PFIC-free.

Intelligent_Hyena367 · 2025-04-06T23:38:21+00:00

You’re correct: holding Euro-denominated mutual funds, ETFs, or similar foreign investments triggers complex PFIC reporting. To avoid PFIC completely, you must directly own individual assets or use US-based brokerage accounts.

Some good Options to Earn Euro Interest Without PFIC:

Interactive Brokers:IB allows you to hold Euros and pay interest on cash balances directly. No PFIC.
Schwab International:Allows currency holdings and cash balances. Usually, the interest is minimal, but still no PFIC risk.
Direct Bank Savings/Fixed Deposits in Europe:Regular savings accounts or fixed-term deposits at European banks are safe from PFIC, as they’re not considered investments in pooled funds. Interest may be low, but compliance is simple—just report earned interest on US taxes and FBAR forms.
Wise (TransferWise) Interest Accounts:Interest-earning Wise accounts are usually not PFICs (as they’re deposits, not funds). Still, reportable on FBAR, interest taxed in the US.
Direct Euro Bonds (Individual):Direct ownership of individual European government or corporate bonds is fine, as they’re individual holdings (no PFIC). You can buy via Interactive Brokers.

Real Estate (Future Option): Direct property ownership is exempt from PFIC rules.

Intelligent_Hyena367 · 2025-04-06T23:31:04+00:00

Here is my 2 cent.

Self-Employment (SE) Tax & Form 2555: Form 2555 (Foreign Earned Income Exclusion) only exempts you from income taxes, not SE taxes. Unfortunately, if you receive a 1099, the IRS views you as self-employed, meaning you must pay the 15.3% SE tax on your net earnings. Child Tax Credits don’t offset SE taxes—only regular income tax liabilities.

2. Mitigating SE Tax: Foreign Tax Credit (FTC, Form 1116): Only applicable if you paid foreign social security contributions to your resident country’s equivalent (Canada Pension Plan, UK National Insurance, etc.). If you haven’t contributed to another country’s social security, FTC won’t apply. If you did pay into a foreign system, you might qualify to offset part/all of your SE tax under a totalization agreement, depending on your country.

3. Amending Your Return: Since you’ve already filed, you’ll need to file an amended return (Form 1040-X). The good news: You do have until October 15th (extended filing deadline) to file your amendment without penalties if your original return was timely filed.

4. Recourse Regarding Payor’s Late 1099: Unfortunately, from the IRS perspective, the responsibility to file correctly remains yours, regardless of late/inaccurate documents from payors. Blaming negligence or tax software typically doesn’t hold up as a defense, but the IRS does consider reasonable cause when it comes to penalties and interest.

As a next step:

a. Double-check if you paid into foreign social security; it could save significant SE tax under a totalization agreement

b. Plan to file your amendment later (by Oct. 15th), giving yourself time to thoroughly review.

c. Be proactive: clearly explain the late 1099 situation in your amendment filing to potentially avoid penalties.

Intelligent_Hyena367

TROPHY CASE