A review of the following provisions should be discussed with taxpayers who fall into these categories:

• The Affordable Care Act in the U.S. requires individuals and families to have a required amount of health insurance coverage for the entire year.  If they do not there may be a penalty on the tax return.  (U.S. citizens living outside the U.S. are automatically assumed to have the appropriate coverage.)

• The foreign earned income exclusion is $102,100 in 2017

• The personal exemption amount is $4,050 in 2017 (which is the same as it was in 2016)

• The F.I.R.P.T.A. withholding tax rate will increase to 15% for sales closing after February 16, 2016 with a sale price exceeding $1,000,000; however, the 10% withholding rate will still apply if the proceeds are between $300,000 and $1,000,000 and the buyer is using the home as a principal residence

• U.S. lifetime gift and estate exemption has increased to $5,490,000

Knowledge Bureau Report thanks Angela Preteau, author of Canadians and the IRS  and the certificate course entitled Cross Border Taxation available online from Knowledge Bureau for submitting this report.

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