My wife is a Canadian citizen, I am a US citizen. We live in the US, but make frequent trips to Toronto. The problem we face each time we cross the border into Canada is that we have to change our money each time. Not only does take time we don't always have, but it subjects us to having to change money at whatever exchange rate that USD/CAN happens to be at the moment.

I would like to just start a joint account at a Canadian bank and keep money in it, use debit card when we are there, and transfer money in anticipation of going on a trip.

My wife is afraid that there will be unforeseen tax consequences with maintaining a bank account out of the country. She is also concerned that when she applies for citizenship here, that having a bank account there will count against her.

My thoughts are that many people have bank accounts overseas; it shouldn't be a huge problem. I just need some guidance about potential tax consequences (as we aren't extraordinarily wealthy, and do our own taxes), before I attempt to do this.

5 Answers 5


FBAR should be filed if total balance of all your foreign accounts is more than $10000 any time during the year (even if only for one day).

My TurboTax handled that well last year, including filling the FBAR for me. Shouldn't be an issue, just don't forget to file it (not with your IRS package, it goes to a different place), if you need to.

On the tax forms (1040 Schedule B, Part III) you should check a checkbox that you have a foreign bank account.


My wife and I are both Canadian citizens living in the US with green card status. I still have a Canadian RRSP and bank account in Canada that are dormant for the most part. We use the Canadian debit card only when traveling (which is quite helpful).

Neither of us file any paperwork in Canada anymore. But as others have mentioned, we do file the FBAR form... this takes about 10 minutes and gets mailed somewhere in Michigan if I recall correctly. (Keep the balance less than $10k total among all foreign accounts and you relieve yourself of this too.)

As far as taxes go, we make less interest in our Canadian account than in our US accounts, so the tax burden is less.


There's no law that prohibits a US citizen or US LPR from holding an account abroad, at least in a country that's not subject to some sort of embargo, so I don't see how it could affect your wife's chances of getting US citizenship when she's eligible.

As mentioned by other posters, you'll have to file FBAR if the money you have in all your accounts abroad exceeds $10k at any point of the year and if the account pays any interest, you'll have to tell the IRS about the interest paid and (if applicable) taxes you paid on the interest income abroad.


You must file an FBAR when doing your taxes.

  • 2
    Depends on the amount of money on the account. If all the foreign accounts hold less than $10K together - no need to file.
    – littleadv
    Commented Oct 24, 2011 at 22:05

Use prepaid cards. You only have to declare, or mention, or convert CASH. You can get as many $500 prepaid cards as you like and carry them across. US Code only mentions cash, so even if customs thought it was peculiar that you had one thousand prepaid cards in your trunk, it isn't something they look into.

Prepaid cards come with small transaction fees though.

And of course, you could also use a bank account in America and just withdraw from an ATM in canada.

Finally, the FBAR isn't that much of a hassle, in case you did decide to get a canadian bank account. The US Federal Gov't doesn't care about all these crafty things you might do, as long as you are using POST-TAX money. If your foreign account earns interest, then you have some pre-tax money that the US Federal Gov't will care about.

  • 2
    That's an expensive solution... Prepaid cards charge enormous commissions, and many have fees (including inactivity fee, monthly fees, international usage fees, etc etc).
    – littleadv
    Commented Oct 24, 2011 at 23:59
  • 1
    If you are using this to avoid tax this is illegal. I would not want to be caught at the border with $15k in prepaid debit cards... the TSA and the CBP are likely to conclude that those cards are equivelent to cash and that you are trying to smuggle cash across the border with out declaring it.
    – user4127
    Commented Oct 25, 2011 at 15:43
  • you are mixing up concepts here. the IRS levies taxes on calendar years, and quarters, not on the movement of cash. Tax avoidance is using currently legal methods to lower your tax burden - such as cross border tax treaties, tax evasion is using illegal tactics to not pay taxes, such as misreporting your earnings. Just because the state cannot see it does not make it illegal. The TSA and CBP have no authority to evaluate prepaid cards, it doesnt matter what they conclude, they will get corrected in court us.mobile.reuters.com/article/governmentFilingsNews/…
    – CQM
    Commented Oct 25, 2011 at 15:52
  • 2
    The TSA is probably going to bring in the FBI or Treasury to investigate. The TSA just finds them and holds them. The FBI decides what crime you commited and then justice goes after you. While this tactic may be legal since the goal here is not to commit a crime it is better to avoid the appearance of impropriety and just keep things above board. And it is illegal to take more than 10k across the border with out declaring it. Even if they are legit after tax funds.
    – user4127
    Commented Oct 25, 2011 at 16:07
  • 1
    cbp.gov/xp/cgov/travel/vacation/sample_declaration_form.xml you have to declare monetary instruments according to the definition on the form. Prepaid cards are not part of that definition, and no senator or agency has changed it.
    – CQM
    Commented Oct 25, 2011 at 19:02

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