I have three questions. Below is the background information to answer the questions:
My client, Julie, is a US citizen. Her mother is a US citizen, but is also considered a “landed immigrant” in Canada. Julie’s mother has lived and worked in Canada for the past 30 years. Her only income will be her pension from her Canadian job which is ~$30,000 USD annually. Julie’s mother has paid Canadian income taxes, but has not filed a US tax return in 30 years.
Julie’s mother is now retired as of this year and has moved back to Georgia to be with Julie.
Question 1: Julie is taking care of her mother. Can she change her tax status from Single to Head of Household and claim her mother as a dependent even if her mother is receiving $30K annually from a pension? Is a pension excluded from “earned income”?
Question 2: The pension Julie’s mom is receiving is in Canadian dollars and deposited to her Canadian bank account. She is then transferring the funds to a US bank account and paying the current exchange rate. Since Julie’s mom is now living in US as of 2022, does she still need to file a Canadian income tax return in addition to a US tax return?
Question 3: Is Julie’s mom liable for 30 years of back taxes because she is a US citizen and didn’t file a US income tax return for the past 30 years? What would be her first step in rectifying this issue?
