In which country do I pay taxes on bank interest?

Question

I'm a USA citizen, but I moved to Canada in the middle of 2011. I have a bank account in the USA. I know that I owe taxes to the USA on interest earned before moving to Canada. But what about interest earned after that? Do I pay taxes to the USA on it and to Canada?

Answer 1

The USA is relatively unique. You will pay income tax on worldwide income as long as you are a citizen regardless of where you live.



Canada will tax you because you live there.



The IRS has a form 1116 for claiming a foreign tax credit to reduce the double taxation.

Answer 2

You're a US citizen so you are taxed on your world wide income regardless of where you live. If you pay any Canadian taxes on the interest you can take a credit for those on Form 1116.

Answer 3

US citizens are taxed on world wide income to US

you will have to check Canadian laws re: income for other sources