QUESTION:
Hi,
I've just come across your site as I'm looking for information on how to do
my taxes for 2003.
I moved from Edmonton AB to Vermont in late August of 2003 to take a
permanent job here. At that point, i sold my house in Canada, bought one
here and am planning on staying here, at least for the forseeable future. I
have an H1-B visa and, from what I know as to where they are in the process,
my employer is in the process of submitting an application for permanent
resident status on my behalf.
Although the majority of my income now comes from the US, I am still doing
work for my former employer back in Edmonton. I have been operating under
the assumption that I will need to file both Canadian and US tax returns and
would really benefit from having someone such as yourself take care of that
for me.
This leads me to a few questions:
1) Is this something relatively easy for us to do with you from such a large
distance away? Am I better off looking for someone closer? (I've not had any
luck on that front so far).
2) Would it be possible to get an estimate of the cost ahead of time?
3) Once this year is over, will I still need to continue filing both returns
in the future, or does my Canadian income eventually just become considered
foreign income here and the CCRA eventually forgets about me?
I would really appreciate your help in getting me organized for this year
and those in the future.
Thanks,
Pxxxxxxx
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david ingram replies:
Good line about our new Prime Minister. You likely have less problems than
he has right now as well.
1. You can deal with us from your distance with relative ease. Every day at
this time of year, we get returns from a dozen different geopolitical
jurisdictions. You are close. Our real specialty is Kuwait, Saudi Arabia,
Kuwait, Indonesia, etc..
2. Your cost for Vermont, US Fed and Canadian returns would likely be $1,000
Canadian because of the self employment. Without self-employment, we tend
to be in the $700 range with maybe an extra $100 in the year of moving. .
Just bundle it up (make copies of your T4 slips and W2 slips and other
important documents) and mail or courier it to us. We have also had some
success with pdf files emailed to us. (just unzipped 29 pages from Ottawa as
one example). However, the effort of scanning and zipping, etc, can be
pretty time consuming as opposed to a quick photocopy.
3. If you are doing all the work for your former Alberta Employer in the US,
there will be no need to file a Canadian Return, just as there is no need
for me to file a US return when I do your US return in Canada. The Canadian
income is taxable in the US on a Schedule C however. If, on the other hand,
you are flying up to Alberta for three days a month and actually performing
services in Canada, we would need to file a Canadian return. If your
Canadian income was under $10,000 CDN, we would exempt it and there would be
no Canadian Tax. If your income was over $10,000, it would be taxable in
Canada and we would claim a foreign tax credit on your US return on form
1116. (you can find these forms at www.irs.gov).
If your Canadian income was (as an example) $20,000 but you did 75% of the
services in the US, we would exempt the Canadian portion of $5,000.
Please note that I am using this as an Q & A in my newsletter but changing
the locale. Your situation is quite common.
Hope this helps.
david ingram
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