PART TWO - Canadian PR with US H1B Needs advice on what

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I will be willing to consider sending you my tax papers and see where i can get more credit. Like you said, i HAVE made more than $110,000 Canadian equivalent in 2002 and 2003 so far each year. And lots of tax analysis that i have read so far from you and publications does seem to favor me.
I am responsible for travel expenses from Canada to US with out any compensation from canada revenue (based on law of work -home) nor company. Left to my company, they want me to move out of canada and live in with no green card yet. I do not want to loose the canadian residence, it is costly for me but i have to keep my job as there are no jobs in canada in my specialty - XXXXXXXXXXXX XXXX.
QUESTION ON REPORT OF RRSP TO US AND ACCOUNTS GREATER $10,000 US DOLLAR in foreign account WAS NOT ADDRESSED. - DO YOU HAVE ANY INPUT IN THAT.
ALSO AFTER LOTS OF READING FROM YOUR WEBSITES AND NEWSLETTER - I AM WONDERING HOW ELSE TO INCREASE THE CREDIT ONCE YOU ARE ABOVE THE 110,000. LIKE NOW 2003 EMPLOYMENT INCOME WOULD BE AS HIGH AS 170,000 CANADIANS.
EXPECTING TO READ FROM YOU SOON, SINCE YOUR CHARGES ARE $350/HOUR, I WOULD NOT MIND PAYING THAT BUT I WOULD LIKE TO KNOW HOW IT WOULD HELP ME IN THIS SITUATION, MORE SO MOST PEOPLE I HAVE TALKED TO SAID, MY BEST BET IS MAXIMISE RRSP, THEN TRY TO GET EMPLOYMENT BASED EXPENSES COVERED - THAT IS A DIFFICULT ONE.
KXXXXXXXXX
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david ingram replies:
Back and forth to work expenses are NOT deductible in either country.  Based on my past experience, you should be getting your Canadian Citizenship for you and your family first, then worry or consider moving to the US.
As a rule, you should not move to the US now without the green card in place.
When filimng a 1040 with an H1B, you are filing as a tax resident.  You should report your foreign accounts and the internal earnings of the RRSP.
I know that there is a difference of opinion.  However, if the IRS decides that I am right sometime int he future, you are the one that will be facing large, large fines without any comeback other than "someone said".
Also, your tax returns become part fo the green card process.  You will look silly if you have not been doing it and that is where your savings will come to the attention of someone who just might act to turn you in because that is their job.
david ingram
"David Ingram at home - bus at [email protected]" <[email protected]> wrote:
  From:           
  Reply_To:     xxxxxxxxxxxxxx
  My_question_is: Applicable to both US and Canada
  Subject:        Need advice on what to do?
  Expert:         [email protected]
  Date:           Sunday December 07, 2003
  Time:           01:13 PM -0800
  QUESTION:
  I bought $10,000 (CAN) RRSP (for 2002 Tax year) in March 2003 for the 1st
  time. Plan to buy another $22,000(Can)(for 2003 tax year) in March 2004 in
  order to have tax savings and not pay tax like i did in 2001. Paid
  $12,000(Can) in tax because i did not buy RRSP that year (2001).
  THE QUESTION IS THIS:
  1. I AM CANADIAN RESIDENT BUT NOT CITIZEN YET, WORK PRIMARILY IN THE USA
  WITH H1-B VISA, WHILE I LIVE IN CANADA (WIFE &KIDS).
  DO I NEED TO REPORT THIS TO US SINCE I AM NOT US CITIZEN OR RESIDENT BY
  STATUS.
  I NORMALLY FILE 1040 BECAUSE I HAD STAYED IN US FOR 3YEARS AS STUDENT BEFORE
  I IMMIGRATED TO CANADA LEGALLY. IN A WAY FOR TAX PURPOSE I FILE AS RESIDENT
  SINCE 2000 YEAR IN US.
  2. EVERY YEAR I FILE US TAX, THEN FILE CANADA AFTER SINCE 2001 WHEN I BECAME
  CANADA RESIDENT. THEREFORE WHERE DO I STAND FOR TAX ADVANTAGE WITH RESPECT
  TO FUTURE TAX FILINGS, RRSP SAVINGS AND WITHDRAWAL. FOREIGN ACCOUNTS GREATER
  $US 10,000 EQUIALENT REPORTING TO IRS AND DEPT OF TREASURY - IS THAT
  APPLICABLE TO ME SINCE I AM NOT US CITIZEN OR US RESIDENT BY LEGALITY.
  I WILL APPRECIATE YOUR REPLY AND CLARIFICATIONS ON WHAT TO CONSIDER NOW OR
  IN FUTURE.
  PLEASE SELECT ME FOR AN ANSWER, I NEED ONE SOON.
  ===================================================================================
  david ingram replies:
  If you are filing a 1040, you are filing as a tax resident of the USA and should file your world income.  If you wish to claim yourself as a non-resident under Article IV of the US/Canada Tax Treaty, you should file a 1040NR. Page 5 of the return has all the spots to show yourself as a claimant under the treaty.
  However, you can file a 1040 and report your world income and file it as a joint return which will lower your US tax liability.  this will not do you a lot of good over-all because you are still liable for full Canadian taxes.
  In either case, you are then taxable in Canada on your world income.  You would then file your Canadian return and if you bought an RRSP, you would or could use it as a deduction.  However, $20,000 worth sounds like more than you should need unless you are making over $110,000 a year.  It sounds to me like you have not been claiming enough foreign tax credit for the taxes you are paying to the US.
  You shouild have someone like myself (experienced in both tax systems) review your old returns before you make your RRSP contribution for 2003.  I am happy to see someone in your position on a Saturday.
  David Ingram's US/Canada Services
  US / Canada / Mexico tax and working Visa Specialists
  US / Canada Real Estate Specialists
  4466 Prospect Road
  North Vancouver,  BC, CANADA, V7N 3L7
  Res (604) 980-3578 Cell (604) 657-8451
  (604) 980-0321 
  New email to [email protected]
  www.centa.com www.david-ingram.com
  Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
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  David Ingram of the CEN-TA REALTY  Group
  US / Canada / Mexico tax and working Visa Specialists
  US / Canada Real Estate Specialists
  108-100 Park Royal South
  West Vancouver, BC, CANADA, V7T 1A2
  (604) 980-0321 - Fax 913-9123 [email protected]
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