QUESTION:
Hi,
I have registered BC general partnership business in Computer Consulting.
I am going to be working in US under TN visa on W2 and will be travelling
weekly to work on my job in US. I go down on Sunday and the return on
Friday evening. During the week I have an apartment there in US.
I have a young child and wife(she takes care of our child)in Canada.
What sort of tax deduction can I expect in areas:
1) business or job related(apartment up keep...travel, etc)
2) child care.
I understand I must file both US and Canadian tax return...what tax treaty
benefits can I expect.
Thanks
---------------------------------------
david ingram replies:
You have chosen to commute to a job in another country. Commuting to a job
in the USA is NOT deductible and I have first hand knowledge of that having
spent thirty days in TAX court in Canada and having all US travel to another
office turned down (incorrectly I feel but turned down nevertheless) by
Judge Mogan.
Your Canadian registered business is a negative rather than a positive when
it comes to the possibility of a treaty exemption of any kind.
As described, when you leave your Canadian home, the US gas, meals and
apartment rent are your personal expense.
You will file a 1040 joint US return with your wife.
You will then convert the US dollars to Canadian and report the money again
on lines 104 and 433 of your Canadian return.
The add up the actual federal and state (if not in Washington State) taxes
plus the Social Security (FICA) and Medicare paid and claim them as a dollar
for dollar deduction on line 433 of your Canadian return. If there is
anything left over that did not get deducted from Canadian federal tax, you
can claim it on Provincial schedule T2036.
We would be happy to look after them for you by emailed pdf files, fax,
courier or snail mail or in person if you are in the Greater Vancouver area.
An exception would / could be if you actually have an H1B application going
and your company's promise of a green card for the US. In this case, you
might be a factual resident of Canada and be able to exempt your US income
on line 245 under Article IV of the US Canada Tax Treaty because you are
just waiting for the green card to move your family to the USA.
------------------------------
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