Tax Return when leaving CANADA T1161 -

Hi David,

(1) I am a Canadian Citizen and employed in Canada from Jan 01, 2007 to June 30, 2007 and my tax was deducted at source. I have received T-4

(2) Since the employer closed down the facility, I received unemployment benefit until November 04, 2008. I have not received any  paper from EI income so far

(3) Since November 05, 2007, I am working in USA under TN-1 work permit and i have W2 from my employer

Can you please tell me how much it would cost for filing tax against above income?  Which documents I need to provide you?

Next year, I would have only income from USA and how much it would cost to file tax return.  Do I have to file tax return in Canada for the year 2008  against USA employment earning only?  It is temporary yearly base job contract. I intent to be a Canadian Citizen.

Regards,

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david ingram replies:

If you do not want to report your US income to Canda, you need to file a departing Canada return including form T1161.. If your house is rented out, you should have filed form NR6 BEFORE leaving the country.

Our fees are outlined in the Disclaimer below following some older questions.


QUESTION: Hi David,

I am Canadian citizen, worked in Canada for the first 5 months of 2006. then moved to US and worked then for the rest of 2006. I have income from Canada employer, canadian bank and US employer. I filed tax return on my US income to IRS already. I haven't done canadian tax return yet. I had thought I only need to file canadian tax return on my canadian income. But it seems both CRA and IRS requested to report my world income to both. I am confused. What should I do to file the tax return to both? 

More specially, I received NR4 slip from CIBC bank. I could not find where to enter this form when I used Ufile.ca. 
How can I enter US W2 form into any Canadian tax form?
How can I enter T4 slip into US tax return form? 

thanks a lot!
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david ingram replies:

An NR4 does not go on the Canadian return.  It goes on Schedules B and 1116 of the US return

The T4 does not go on the US return unless you are filing as a year round resident as in 2 below.

I am too busy to come up with a new answer but this older one will give you an idea.


QUESTION: Hi David,

I really need your help in filling U.S tax and I am getting mixed messages which forms to file. 
I am a Canadian Citizen in U.S on TN visa for more than a year. 
I have RRSP in canada over 10,000 put in fixed bond and saving account in a bank. 
What do I need to file here and what forms do I need to fill. 
Do I still have to file tax in Canada for canadian earning? Please help.
____________________________________________________
david ingram replies;

You need to file a departing Canada tax return and file T1161 if you left more things than your RRSP behind.  The Canadian return will only include Canadian earnings although if you had a Home Buyers Plan, it is all due and taxable on the departing Canada return unless you have paid it back.

For the US, you have two choices:

1.   File a 1040NR dual status statement and a Dual Status 1040 Income Tax return with no standard deduction

or

2.   File a full 1040 which includes your Canadian income and gives you a full standard deduction and the right to file a joint return if married.  This is usually the best if you left Canada early in the year as you did.

If you can't figure it out, file an extension  form 4868 (find it at http://www.irs.gov/pub/irs-pdf/f4868.pdf )

and then send the information to us at the address in blue below to complete for you.
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QUESTION:

We moved to the US in December 2004. At the time that we did our 2004 taxes, we did not have any 2004
US income to worry about, so we used ufile.ca to do our Canadian taxes. We have a house in Canada that we
 kept with the intent of renting it out, and were unaware of the requirement to file a T1161 until we began
 working on our 2005 taxes with the assistance of an accountant. By the time he got involved, it was already
 late. In January 2007, CRA assessed a late filing penalty for both myself and my husband as joint owners of the
 property. The statement was sent to our old address, even though we updated our address at the time we sent
 in our 2005 tax returns. My question is this: Is there any way that we can get the late filing penalty forgiven?
 We have done everything else by the books, and we did file the T1161 when our accountant brought it to our
 attention. Thank you.
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david ingram replies:

The T1161 for a departing Canadian is due on April 30th of the year following the departure.  The penalty is a minimum of $100 or $25.00 per day to a maximum of $2,500.  This is the same penalty for the late filing of a T3 return with distributions.

I know of no method of officially cancelling the $2,500 penalty you will each have received.  You could try writing to the FAIRNESS COMMITTEE and explain the situation and they might cancel it.  for $5,000, it is certainly worth the effort.

You can start looking up the rules for the FAIRNESS COMMITTEE here:

http://www.cra-arc.gc.ca/agency/fairness/prov_3-e.html

I do not expect them to agree but they might.

You might write to Prime Ministrer Stephen Harper as well.  The penalty is unfair because although easy to find if you know what you are looking for, NO ONE knows about it automatically. 

The tax preparation programs do not tell you to fill it in when you put a date in for departing Canada. 

The $2,500 penalty is imposed after 100 days.



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On February 11, 2008, David Ingram wrote:

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 line 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. 
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However, I regularly search for the words"PAYING CUSTOMER" and always answer them first if they did not get spammed out. For the last two weeks, I have just found out that my own email notes to myself have been spammed out and as an example, as I wrote this on Dec 25, 2007 since June 16th, my 'spammed out' box has 47,941 unread messages, my deleted box has 16645 I have actually looked at and deleted and I have actually answered 1234 email questions for clients and strangers without sending a bill.  I have also put aside 847 messages that I am maybe going to try and answer because they look interesting. -e bankruptcy expert  US Canada Canadian American  Mexican Income Tax service and  help
Therefore, if an email is not answered in 24 to 48 hours, it is likely lost in space.  You can try and resend it but if important AND YOU TRULY WANT OR NEED AN ANSWER from 'me', 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 expert  US Canada Canadian American  Mexican Income Tax  service and help.
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Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST if in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.
$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 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.
 
$1,600 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

$1,700 would be for two people with income from two countries

$3,000 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 $200.00 up.
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
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 $900 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.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has recieved as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.
 
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