Many Canadians have tax filing requirements in the United States and don’t know it. One thing’s for sure, if you don’t meet your U.S. tax filing obligations, there can be severe consequences.

The problem is there can be a myriad of circumstances under which a person can have U.S. tax filing obligations ranging from the individual who is a U.S. citizen, to the person who has never even set foot in the U.S.

Wondering where you fit in? Here are the basics.

The United States’ taxes are based on citizenship, as well as residency, which is in contrast to Canada where we generally only tax our residents (on their world-wide income) and non-residents on their Canadian-source income or dispositions of certain Canadian property.

If you are a U.S. citizen, (or in certain other circumstances) you are required to report your world-wide income on a U.S. tax return and pay taxes accordingly.

Of course, if you’ve also paid tax to another country, you will generally be able to claim a foreign tax credit in the U.S. for the foreign taxes paid, which minimizes double tax.