Income Tax Question for My American Husband Living with Me in Canada with regard to his US pensions and Social Security -

Date:           Thursday May 31, 2007
Time:           09:30 PM -0400


My now-husband is a retired American citizen who moved from Alaska to live with me at the beginning of 2006.  We were married in May 2006.  Although his income is all pensions from US sources, we know that he is required to file both US and Canadian tax returns for 2006, but we are becoming quite frantic at the incorrect and/or conflicting information we have received from both CRA and the IRS.  We even went into an IRS office in Anchorage, Alaska last summer to ask our questions and were told by the person we spoke to, "I am trained in international tax law and I know the answers to your questions, but I'm not allowed to tell you because I'm not working in that area now"!

A CA  friend of mine recommended an accountant in White Rock who supposedly does US/Canadian tax returns.  We contacted her months ago and she agreed to do his returns when the time came, but since then she has stopped returning my many phone calls and e-mails.  My husband has applied for an extension to file his US tax return, but there is no such option available in Canada, and he is accumulating interest and penalties.  The fact that we don't know what his Canadian income will be for the purposes of his tax return has also kept me from filing my own return, although I am due a refund so I assume this isn't a serious problem.

We are seriously concerned about this problem.  In searching the internet today, I was relieved to come across your website.  I spent several hours perusing other people's questions, but I couldn't find anything referring to retired people in our situation.  I'm hoping that we can make an appointment to meet with you or one of your staff to get this problem resolved.

Thank you for whatever help you are able to give us.
david ingram replies:

I know Anchorage reasonably well and have been there 8 times after driving the Alaska Highway.  Have friends there with public Television and also in Soldotna, Homer, Wasilla, Palmer and Eagle River in that area.  I expect that you went to the IRS office in Soldotna, not Anchorage but who the heck down here knows where Soldotna is?

But enough of a travelogue.

As a non-resident of the US, your husband has to pay 15% tax to the IRS on any of his company, IRA or 401(K) type pensions.  He does NOT pay tax to the IRS on his US social Security.  He will file a 1040 and exempt the US social Security under Article XVIII (5) of the US / Canada Income Tax Treaty.

It is important to limit the US tax to 15% and it may be necessary to file form 1116 and "resource according to Treaty" the pension income  to limit the tax to 15% because Canada will only allow a tax credit on 15%.  If he has interest from the US, the treaty rate is 10% and if he has dividends, the treaty rate is 15% as well..

Your husband will then covert the amounts to Canadian Dollars and report all of the pensions including the US Social Security on line 115 of his Canadian T1.  He deducts 15% of the Social Security on line 256 of the return.  If he has any interest or dividends, they would go on Schedule 4 of the Candian return and would also be subject to foreign tax credits.

He claims credit for the 15% tax paid to the US by filling in lines 431 and 433 (and completing the calculation) on schedule 1 of the Canadian T1.  If he does not get full credit from this calculation, he can fill in the provincial foreign tax credit and get the balance.

I / We would be happy to assist you.  Our pricing follows below after a preamble abouot how to get through to us.

It is very unlikely that blind or unexpected email to me will be answered.  I receive anywhere from 100 to 700  unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients.  Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject and get answered first.  I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when i am out of town. 

If an email is not answered in 24 to 36 hours, it is lost in space.  You will have to phone to make an appointment.  Gillian Bryan generally accepts appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321

David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office)
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 and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at If you forward this message, this disclaimer must be included."
David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada.
This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no rental
$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,600 would be for two people with income from two countries

$2,800 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely $450
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.
Just a guideline not etched in stone. 
This from "ask an income trusts tax and immigration expert" from or or David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention

David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty

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international non-resident cross border income tax help estate family trust assistance expert preparation & immigration consultant david ingram, income trusts experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants Income Tax Convention Treaty
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