Visa / US Tax filing question ...Canadian-USA-Global tax help -

Visa / US Tax filing question ...
xxxxxxxxxxxxxxx wrote:
Hi ...

I would greatly appreciate if you could point me in the right direction ...

XXXXXXX (a dual US/Canadian Citizen) and I were married in 1983 (I’m Canadian) ... we met in an International XXXXXXXXXXXX  ... we have 3 children 23, 18 and 15 ... XXXXXX and the girls have all received their US passports and also have Canadian passports

We  have lived here in Manitoba, Canada for 26 years ...

We plan to move to the US this summer ... as soon as I receive my visa

XXXXXX asked our accountant many years ago if he was supposed to file US income tax ... he was told no ... not unless you make over $75,000 per year. Ooops! I guess we got a bum steer ...

I have applied for my US Visa and have done everything that was required ... I have been to Montreal for my medical and Visa interview and now Immigration has requested the following:

1. Please provide US taxes from previous 3 years or obtain letter from IRS waiving requirement. Thank you

We own our home in Selkik, Manitoba, Canada (owe about $70,000 on our mortgage) and have a few mutual funds ... (about $90,000) We have a line of credit that is about $180.000  ... and own 1 time share worth ($8,000) and another that we owe on (that was a mistake) are trying to sell both.
... a savings and a checking account and a couple or accounts for our kids ...

Can you point me in the right direction ...

I’m not sure if I should call the IRS or find a someone to help us with this ...

Immigration in Montreal kept my Visa and I need to travel to Missouri at the end of July for our 30 year XXXXXXXXXXX Reunion so I have a bit of a time crunch ...

thanks you so much for any help that you can provide ...

warmest regards,


P.S. I read on one web site that folks in a similar situation to ours filed late returns and received a refund based on some kind of child tax credit ???


with amazing gratitude daily ...
blessings,

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david ingram replies:

You were given extremely poor advice.

He was always supposed to file a US tax return and so is your 23 year old and your 18 year old if he or she has any income.

If you go to www.centa.com and read the October 1995 newsletter on what US citizens living in Canada need to do, it will give you the details.  Find it under newsletters in the top left hand box.

If you have not filed, the proper thing to do is go back 6 years not 3.

Since you need these now, I would be happy to expedite the preparation.

To do so, i need copies of HIS and your Canadian returns (and maybe the 23 year olds) for 2003, 4 5, 6 7 and 2008.

I need a lost of all of the bank accounts, life insurance policies with cash value, RRSP's.and investment accounts your husband had signing authority over.

In addition, I need the addresses and account numbers for those accounts AND I need the highest balances for those accounts in any year.  For the RRSP accounts, I also need the Dec 31, 2002, 2003, 2004, 2005, 2006, 2007 and 2008 balances.

And, for the RRSP accounts I need to know how much money went into each account for each of those years but that info is usually on the tax returns.

If you happen to own an incorporated  family business, I need copies of the financial statements for those same years.  You will see why these are all necessary in that October 1995 newsletter.

These are REALLY important to get done if he is in the process of sponsoring you.  The penalties are IMMENSE if they find out he has not done the returns or filed his TDF 90-22.1 and 8891 forms in particular.

And, the Canadian departure taxes are equally important.  You will need to file forms 1161 and likely 1243 and 1244 with your last Canadian returns. 

Before you let an accountant look after you, ask them what an 1161, 1243, 1244, TDF 90 and 8891 forms are.  If they do not know immediately without looking them up or calling to someone else in the other room who does know, you are dealing with the wrong person(s).

Read this older question.
--------------------

Is there anyone at this email address available to do my income tax this
year? 

Thanks,  

2006 tax client
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david ingram replies:

George Arora, who did your return last year, has left and returned to California and is working for a CPA firm in Beverly Hills as a staff accountant.

My son, Peter Ingram has returned after an absence of two and a half years and David Holroyd and Gillian Bryan are here with me as well on a full time basis.  Another son Mitchell Ingram is coming along fine as a US / Canada Tax preparer while attending Capilano College on a part-time basis.

I am the only one to consult on tax matters at the moment however.

So yes, there are 4 1/2 of us here and, of course:.
 
We are pleased to look after your tax return.

You may send the information by email in .pdf  or word format.  Please do NOT use bitmap or any other word processor. (Number Pages by Hand please).

You may send it by snail mail - If you do, please keep a copy of anything hard to replace. (Number pages by Hand)

You may send it by courier - If you do, please keep a copy of anything hard to replace. (Number Pages by hand)

You may fax it.  If you fax, please make sure anything light has been darkened and, of course, number the pages by hand.

 We ask that the pages be numbered in a corner by hand.  That way if we have difficulty with a page, it is easier to refer to it when talking to you, and  if a page does not come through, we know which page is missing.

When copying on a photocopier or faxing, it is not unusual for one or more pages to double feed and not be reproduced at the other end.

Depending upon whom you are dealing with at my office,  Please send to: taxman@centa.com or gillian@centa.com or holroyd@centa.com or peter@centa.com or mitchell@centa.com if you email.

Please fax to (604) 980-0325  - preferably not at 3 AM because it is a home office. 10:00 AM to 10:00 PM seven days a week is a fine time to fax./

Courier or snail mail to

david ingram's CEN-TA
4466 Prospect Road
North Vancouver, BC, CANADA
V7N 3L7


The preferable multi-line phone number to call  is (604) 980-0321
Another business number is (604) 980-0499 - We use this as a phone out  and  fax out line however and it is more likely to be busy.

The kid's residence phone number is (604) 980-3578 if you just can't get through on the office phone. However, it is not a business phone so please only use it if really necessary.

What do we need you to send us?   The following is not all of it by any means but if you have any of these things, printing out the government form and trying to match the lines makes a lot of sense.

US and CANADA

For US and Canadian returns we need to send in copies of Charitable donation receipts.  Therefore, we need copies of the actual receipts.

For Canadian returns, we need to send in copies of the actual receipts for medical costs. Therefore, we need copies or the actual receipts.

We need copies of or the actual NR4, T3, T4, T5,  T5007, etc. slips. We need copies of W2, W2G 1042S, 8288, 1099-Misc, 1099-Div, 1099R US slips.

In general, if there is a tax deducted on a slip, we need a copy of it.  If it is just income, we do not necessarily need the slip, just the amount but the slip is always nicer to have. 

If there was tuition or other amounts paid for post secondary education, we need the actual slip or a good copy.

If you are self-employed, we do not need the receipts or income.  If you have done a P & L (Profit and Loss) statement, we need the amounts on the statements.

Hints on the statements for Canada.

You can find all Canadian Government tax forms at: http://www.cra-arc.gc.ca/menu/AFAF_T-e.html

If you are Self Employed in 'business' in Canada, I need the amounts you will find on the T2124 form which you can find at:  http://www.cra-arc.gc.ca/E/pbg/tf/t2124/t2124-07e.pdf

If you are a Self Employed Fisher in Canada, I need the Amounts you will find on form T2121 which you can find at: http://www.cra-arc.gc.ca/E/pbg/tf/t2121/t2121-07e.pdf

If you are a Self Employed Farmer in Canada, we need the  amounts you will find  on form  T2042 which you can find at:
 http://www.cra-arc.gc.ca/E/pbg/tf/t2042/t2042-07e.pdf

If you are a Self Employed Professional or A commission Salesperson in Canada  where you do not actually sell a product and have a cost of goods sold, you should fill in Schedule T2032 at: http://www.cra-arc.gc.ca/E/pbg/tf/t2032/t2032-07e.pdf

If you have a Rental house in the US or Canada, Canada wants form T776 filled in at: http://www.cra-arc.gc.ca/E/pbg/tf/t776/t776-07e.pdf

A Canadian employee with business expenses would file form at: http://www.cra-arc.gc.ca/E/pbg/tf/t777/t777-07e.pdf

Notice that the Canadian Forms all have Computer code numbers beside the items asked for.  You should try to quantify your expenses to fit into these codes.  It will make our charges to you less because we do not have to add up amounts to fit into the government schedule.  A good example would be field 8860 for Legal and accounting fees.  Your statement might have  a figure for accounting, a figure for tax preparation and a legal figure for suing a client for an unpaid bill.  For the purposes of the CRA's form, I want those added together and give me one number only for field or line 8860.

Similarly, field 9220 asks for telephone and utilities.  That means that even if you have separate totals for your Business phone, cell  phone, fax, Internet, heat and electricity, the CRA and I only want one total.  Usually, when a client gives us these, they are scattered through his or her information and it takes time to find them and add them which means a larger bill.   The fishing form does not have a place for telephone and utilities and the rental form only asks for utilities in field 9220.

If you are a Canadian who is leaving the country this year, to avoid a $2,500 penalty, you have to deal with form T1161 at: http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-07-e.pdf


 Specific Hints for the United States

All US forms can be found at: http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Self Employed (fisher, professional, commission sales agent, etc.) need to send in the figures on Schedule C which you can find at
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

If you have rental income in the US or Canada or France, you need to fill out Schedule E which you can find at: http://www.irs.gov/pub/irs-pdf/f1040se.pdf

If you are a US farmer, (Xmas trees, almonds, oranges, caribou  or beef, etc.,the US wants Schedule F filed at: http://www.irs.gov/pub/irs-pdf/f1040sf.pdf

If you are a US or Canadian  employee filing a US return with business expenses, form 2106 is in order at: http://www.irs.gov/pub/irs-pdf/f2106.pdf

If you are an American filer with a Canadian RRSP, you must file US form 8891 at: http://www.irs.gov/pub/irs-pdf/f8891.pdf

If you have any foreign accounts whatsoever (Canada, France, Spain, Italy, Japan, Indonesia, Dubai, etc.) you MUST FILE SCHEDULE B at:  http://www.irs.gov/pub/irs-pdf/f1040sab.pdf  - Not a choice, if you are the co-signer on your aged mother's account in any country but the USA, you must file Schedule B and answer questions 7 and 8.  You say yes to question 7 if you have signing authority over foreign accounts totaling over $10,000 at any one time in the year.  You answer yes to question 8 if you have an RRSP, an RESP, a RRIF in Canada or the equivalent in any other country.  You are unlucky if you have a RESP because now you have to file form 3520 and likely 3520A. You get to file form 8891 for a RRIF and an RRSP.

If you said yes to question 7, to avoid a minimum $10,000 fine, you must fill in form T D F 90-22.1 for each account you have signing authority over including a company payroll account, a cub scout account, your mother or father's account or a joint account with your foreign spouse as well as your own accounts and you have to fill one out for each RRSP as well. Find this TDF 90-22.1 form at: http://www.irs.gov/pub/irs-pdf/f90221.pdf  -  PS, the $10,000 is a minimum fine, the maximum is up to $500,000 PLUS 5 years in jail.

If the answer to 8 is yes, the fine is:
*   35% of the money in the RRSP Plus
*   5% of the money for every year not reported (that you should have been reporting) since 1989
*   Tax on the amount in the RRSP. 

To be honest, to this date, (Mar 1, 2008) I have never seen the 8891 penalties imposed - not even once yet. However, the TDF 90-22.1 fines are imposed routinely and my record (for silliness) was a 105 year old lady with a $10,000 fine.  I have NEVER had anyone fined who came forward voluntarily. My understanding is that the Dept of the Treasury is presently fining some 1072 people who were clients of a Vancouver Financial  consultant, Jerome Schneider, who told his clients not to file them.  Jerome Schneider received a $100,000 fine and 6 months in jail on a plea bargain when he turned in all of his clients and the lawyers and accountants who were assisting. see more on this and other US accountants a and their clients who received jail time at: http://centapede.centa.com/Week-of-Mon-20060227/002468.html

If you already have your US return done and just want the Canadian return done, we obviously need a copy of the US return.  Same with the UK, Australia, Portugal or Libya.

Same thing if Canada or any of the other 200 returns is already done and you just need the US return done.  We need copies of those returns.  Please label each line of the foreign return with the English word.

Hope this helps.

Today,  I realized I have some 800 unanswered questions.  I do not know how they get to be that many.  I had them down to a very few at the end of November but have been swamped  since and have hardly answered any even though my intention is to answer two free strange questions a day..

You might try calling Fred Snyder's radio program for an answer. 

Every Sunday  Fred Snyder's  "IT'S YOUR MONEY" radio show. on CKNW  (www.cknw.com) every  Sunday from 6 PM to 7 PM.  Again, you can listen live in Saudi Arabia or Tuscon Arizona at www.cknw.com The phone in phone numbers are cell *9898 - local (604) 280-9898 or  LD at 1-877-399-9898.  

Fred also does a show on CISLE,  650 AM on the dial in Vancouver from 9 to 10:30 AM. 

I guest on both of these shows on the First Sunday of each month.  June 7, July 5, August 2,  Sept 6, Oct 4, November 1 and Dec 6, 2009 and then Jan 3, 2010.

The following was my April 27, 2008 version when i gave up on ever getting to about 1,000 emails.    The problem is that I keep on putting things aside that I want to answer but just do not get to.  I have, by the way, answered over 300 unsolicited emails at the  same time.

david

david ingram replies:

This email has NOT been read because of the sheer number received each day.  Two unidentified emails are picked to be answered each day.   The rest receive this email.  Contact information is provided further on.  As I am amending / updating this automatic reply, there are over 400 today.   I have cleaned out over 45,000 messages from my spam box and over 14,000 that I actually looked at and deleted. Sometimes, you will receive this a loooonnnnggg time laterThis is because I put it aside to answer and finally gave up at ever getting at two or three hundred of them.

In general, I pick out two or three or four random questions to answer a day.  Unfortunately, I am sorry that I cannot reply to your question at the moment because you do not show as a  client. If I am incorrect and you are a client with a new email address, etc., please resend your question or inquiry with YOUR NAME (i.e. John Smith) and the words "PAYING CUSTOMER" in the subject matter.  Please indicate when you saw me or consulted me in the last six months and what name the bill would have been under.  I am also going to limit my free follow up questions to two from now on.

That does NOT mean I am going to charge automatically for the question.  A simple yes or no question is never charged for.  However, it does identify your question as being a priority and should stop it from being spammed out or automatically sent this rejection letter. 

At the moment, I am limiting my free replies to two to four per day (I get up to 50 questions) from non-clients. I am just too busy to answer many questions and am limiting myself to 2 a day except for my regular paying customers whom I do my damnedest to answer the same day.  And, if I have already answered one of yours free in the last six months, it is unlikely that the system will let you through with another free one now. And, if i have not answered a client's question within 48 hours, it is unlikely that it survived the filters and you should resend it or phone (604) 980-0321 to point out that you are a client and that this is one of your two follow-up questions. 

If you are not an existing client and decide to retain me to answer your question(s), please be advised that I have a minimum charge of $450 Canadian (plus GST if in Canada - as shown in the suggested price guidelines in RED below.  Please call Gillian Bryan at (604) 980-0321 to set up a phone consultation time.  She will ask you to email your question again (likely with more detail since you are paying for it) to myself taxman@centa.com and her at gillian@centa.com and Gillian will set up a phone consultation time for us to talk.

I am, however, adding your name to our Q & A list and another question may answer yours. AND, I have answered over 8,000 questions at http://www2.jurock.com/askexpert/expert.asp?aid=121&cid=63 or www.centa.com  (see the archives) and you should be / might be able to find your answer by going there or  more specifically, to http://www.centa.com/search.htm
(To be removed from that list, reply to taxman@centa.com with 'Please Remove' in the Subject)

However, if you can not find your answer at the site, answers to this and other similar  questions can be obtained 'FREE' on Air on most Sunday Evenings and always on the first Sunday Evening of each month
 
On the first Sunday from 5 PM to 6 PM on CKNW (980 AM on the dial) in Vancouver, david ingram will be  a  guest on Fred Snyder of Dundee Wealth Management's Radio Program, "It's YOUR Money". If you are not in the Vancouver Area, you can still hear it live (or in archives for four weeks) at www.cknw.com.
 
Calls to the show can be made to (604) 280-9898 - The long distance line is free throughout BC only at (877) 399-9898 or cell at *9898.

And also on the first Sunday of each month, I will guest with Fred Snyder from 9 AM to 10:30 AM on CISLE  650 on the AM Dial.  This is also a live phone in show and we take calls.

Callers to the Shows can also come out on Thursdays at noon or 7PM at night to one of our free seminars. Each one of the 2 1/2 hour seminars devotes at least 20 minutes to mortgaging and making all interest deductible

Every Thursday Evening, Fred Snyder of Dundee Wealth Management conducts one of 23 different financial seminars at his office

Time:    7:00 to 9:30 PM
Date:    Every Thursday evening
Place    1764 West Seventh
             Vancouver (corner of Burrard)

Phone (604) 731-8900 to register and there is usually a Noon hour seminar as well.   At the noon hour seminar, Fred even provides Sandwiches and coffee.

No cost - no obligation

Topics always cover mortgage interest as a deduction

other topics - getting the mortgage, estate planning, critical care insurance, income taxation (3 nights), differences between stocks and bonds, and usually the most innovative HELOC mortgage offered in Canada from Manulife Bank as presented by Stuart Rodger  of Manulife (604) 351-6133,
 
Those on Vancouver Island can attend Ralph Hahmann's Tuesday Evening Seminars on McKenzie Avenue in Victoria. (250) 472-0700.Ralph is also with Dundee Wealth Management and is a specialist in Pension Payouts and the co-author of the best selling book, "the Pension Paradigm:.


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SUGGESTED PRICE GUIDLELINES - April 26, 2008

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax  service help.
pert  US Canada Canadian American  Mexican Income Tax  service and help.
David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
 
Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST if in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.
 



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