XXXXXXX XXXXXXX wrote:
Hello,
I am trying to
figure out what to do for my 2008 Canadian taxes.
My husband
and I are Canadian citizens living in the US since November 2007. We own a home
in the US, have US driver's licenses, US healthcare, and have paid
taxes as a resident (1040)
as we have been here for over 183 days in the 2008 tax year.
I'm confused
as to what I have to do for Canadian 2008
taxes. We own a home in
Canada (no one lives there, we simply pay for the mortgage) and have sold it
effective June 2009. My US income has never left the US. I have never bothered
to cancel AB healthcare as it was free this year (but my son does not have it)
but I believe it is not longer valid as I have not resided in Canada this past
year. I received the 100/month child tax benefits and was on EI Mat
leave for 6 mos of the 2008 year but can cancel and pay back the money for child
tax benefits if required. I realize I have to file Canadian income tax for 2008
(EI-mat leave and child tax benefits) for myself. My US earned income has never
left the US, so I am not sure what I have to use as an exchange rate or if I
even need to include it since I haven't lived in Canada? My husband's US income
has never left the US either.
Is it mandatory to include my US income
under the TN-1 visa job?
I have a US tax bill and now if I do include
it, it appears the Canadian gov't wants another 15% on top of what I've already
paid in the US.
I'm hoping I'm missing something and just have to
declare my CAD income, but don't want to do anything illegal.
Any advise
would be greatly appreciated! I am willing to pay for a consultation fee
in order to clear up this confusion as well.
Thank you!
XXXXXXX
XXXXXXX
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david
ingram replies:
You are taxable on your mat leave and should not have
received the child tax benefit. When you left Canada, you and your husband
should have reported a departing date on page one of the T1 return and filed
form T1161 and maybe T1243 and T1244 as well. This would have listed your
house and any investments for the purpose of the departure.
If the house
has just been sold, you will have to file Forms T2062 and T2062A and T2091 for
the sale. Failure to file the T1161 has already garnered a penalty of
$2,500 plus interest each if the CRA wants to enforce it.
Failure to file
the T2062 within ten days of your sale in June will also engender a $25 a day
fine (min $100) to a maximum of $2,500 for being 100 or more days
late.
By keeping your AB Medical and the empty house and collecting the
Child Tax Benefit, you have done some of the things that give the Canadian
Government the right to tax you.
Pay back the Child Tax Benefit as soon
as possible. File 'your' Canadian tax return and report the US income on
the return. (Fill in schedule A and Schedule B to report your world
income). Exempt the US earned income on line 256 of the return under
Article IV of the US Canada Income Tax Treaty.
You also had to
report the Maternity leave on your US 1040.
This older question will
likely help.
QUESTION:
I started working in the states last April for about 8 months with a TN visa. I was wondering if I have to pay taxes on income earned in the states to Canada as well?
------------------------------------------
david ingram replies:
You
should file a departing Canada Income tax return with form T1161 and maybe a
1243 and 1244 if you have left any assets behind.
These older questions
will help a bit
xxxxx wrote:
hello
i am a single Canadian working full-time
in Texas for a us employer
i have been in the us since Jan 2,
2007 on a tn visa.
i currently have a W2 and also have slips for rsp
contributions
from Canada for 2007.
what would be the cost for filing
my tax returns to both countries?
also do you recommend contributing to IRA
roth's instead of rsp's
when i am working in the us?
thank
you
xxxxx
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david
ingram replies:
As described, you have no tax to pay to Canada and should
not have bought an RRSP for 2007.
Basically, you should be filing a
departing Canada return and look at T1161 to see if it is necessary to file it
- Usually, you would file it is you own a summer cottage, home, non-RRSP
mutual fund or brokerage account or are leaving a share of a family business or
farm behind.
For the US, you would file a US1040. there is no tax
return in Texas, Nevada, Alaska, Florida for you to file.
If your
intention is to come back to Canada, you should likely NOT buy a ROTH. If
you want a tax deduction buy a conventional IRA or participate larger in a
company 401(K)
We charge $900 to $3000 for US Canada tax returns
There is a more detailed list further down below.
I am Canadian citizen and have been working in USA on
TN-Visa since 2004. I have a valid Canadian driver license, no medical card,
working bank account and has no property. All my family is staying with me in
USA. 1) Am I suppose to file a
Canadian taxes every year. 2) If I
do, what would be the roughly tax break up like 20% paying in Canada and 80% in
USA. 3) What would be your fee to
file Canadian and USA taxes. Thanks
& regards.
----------------------------------------------------
david ingram
replies:
You should have filed a departing Canada return in 2004.
there is no need to file a 2005, 2006, or 2007 return as you have described your
situation.
If, on the other hand, the Canadian government asks you for a
return for any of those years, you, as a Canadian citizen, are required to
file. Report all of your US income on the T1 and then deduct it all on
line 256 of the return under Article IV of the US - Canada Income Tax Convention
(treaty).
This older question and answer may help
----
I moved
to Nevada for a job July 2006, and still work there now. Do I do
my
taxes in Canada and us separately? My earnings for 2006 in Canada were
very
low.
_______________________________________________
david ingram
replies:
You have more than one choice.
1. a) You file
a departing Canada tax return including form T1161 and 1243 and 1244 if you left
more than $25,000 worth of assets behind.
b)
You file a
1040NR Dual
Status Statement for the US and then a
1040 Dual Status Return to
report the US income only. The statement is there to separate out any US
income you may have received BEFORE you actually went to the US. You can NOT
claim the standard deduction on a Dual Status Return You can only use itemized
deductions on a Dual Status Return.
2. a)
You file Canada as in 1a) above.
b) You file a 1040 tax return reporting your world income for the
year including the Canadian income. Then you file US form 1116 to claim a
foreign tax credit for the tax, CPP and EI you paid to Canada. This allows
you to claim the standard deduction on the US return.
Good luck.
Remember that you can always send the returns here by fax, courier snail mail or
pdf email.
--------------
QUESTION:
Dear experts:
I am currently holding a TN visa working
for a US employer. I have my family ties to Canada but I reside in the States
for more than 183 days/year. Should I file as US resident or Canadian resident
for the Tax purpose? In each case, what kind of tax forms or schedules I have to
look at?
Thanks
_____________________________________________________________________________
david
ingram replies
If you are applying for an H1B visa and intend to get a
green card and your family is not moving unitl the resident alien cards come
through, you should be filing as a US resident and not paying tax in
Canada. If you have a house, it should be put in your wife's name
only. You would file a US joint return with your wife and claim your
children as dependents.
If you are not intending to stay in the US and
are still spending a lot of time in Canada, you would file as a Canadian
resident and claim a foreign tax credit for the taxes, FICA and Medicare taxes
you pay to the US after filing your US 1040.
There is an in between
position where you might be a factual resident of Canada where you report your
US income to Canada but deduct it then on line 256 under Article IV of the US
Canada Income Tax Convention. In this case you would be a tax resident of the US
and file a joint US return with your wife.
You need to sit down in person
or by phone with someone who really understands
it.
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