US Canada tax liability upon departure - David Ingram

My_question_is: Applicable to both US and Canada
Subject:        tax liability
Expert:         taxman at centa.com
Date:           Saturday February 11, 2006
Time:           02:28 PM -0800
QUESTION:
I am a Canadian citizen who started work and live in the US on a TN1 Visa in
March 2005.  2005 is my first tax year where I have to file both in Canada
and the US.  I now have US accounts and did not close any Canadian accounts
and have a US driver's license.  I now have both RRSPs and a 401 K plan.
What do I need to fill out in the US and Canada to reduce my tax liability
in both countries?  Will I need a lawyer as well as an accountant to
determine my resident status?
====================================================
david ingram replies:
You will file a departing Canada income tax return which should include a
T1161 and maybe a T1243 and T1244.
The fine for not filing the T1161 by April 30, 2006 for the 2005 year (if
required) is $25.00 a day to a maximum of 42,500 and they are enforcing the
fine.
Then you will file a dual status 1040 return and the return for the state
you are living in. The 1040 must also have an 8891 filed to report the
internal earnings of the RRSP and a T DF 90-22.1 filed for each financial
account left in Canada
You do not need a lawyer.
You should have notified all of your Canadian Financial institutions that
you are now a non-resident.
We would be happy to look after these returns for you.
-----------------------------
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
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