US Citizen from California Working in Mississauga

Date:           Wednesday November 19, 2003
Time:           06:32 PM -0800
QUESTION:
My husband and I are both US Citizens, and he is currently working in
Ontario, Canada on a two year temporary work permit. We own a house in
California, and recently purchased a house in Mississauga, Ontario. His
salary is paid in Canadian dollars, and they take taxes from his payroll
check. We are not sure how to file our taxes, and I have heard of the
possibility of double taxation. Please advise on the best way to tackle
this. Thank you.
===============================================
david ingram replies:
If you have bought a house, I presume that you are intending to stay more
than two years.
Here is what you will be doing.
1.	First of all, for the year 2003 assuming that this is the year you have
arrived in Canada, you will file US form 2350 to delay your 2003 return
filing until January 2005.
2.	When you do file, your US form will consist of a Joint US 1040 with a
schedule A for itemized deductions and a schedule E to report the rent on
your California House and a schedule 2555 to exempt up to $80,000 US of your
Canadian earnings on pro-rated basis. Other schedules such as B for
investments, C for self employed income and SE for self-employed Social
Security payments might be required as well, depending upon your situation.
The good news is that your Canadian mortgage interest and your Canadian
Property taxes and Canadian medical and union dues and other expenses can be
used as itemized deductions on your US schedule A.
3.	Your California return will not be your usual 540, it will be a 540NR
showing your part year residence in California.  Your California return
needs to be filed on time although a four month extension would make sense
in this first year. You will also be filing (at least) California Schedules
E and CA(NR).
4. Your Canadian return will be an "entering Canada" return and the date of
your entry to Canada will determine the amount of your personal exemption
amount.  It is pro-rated by the number of days in Canada just as the US form
2555 is pro-rated for the $80,000 exemption amount.  You will also have to
report the California Rental on a Canadian Schedule T776.
You are welcome to send your returns to me. At any moment, I am usually
dealing with returns from twenty different states and countries. It is our
specialty as opposed to many offices which may see one or two a year while
we see a thousand returns like yours and are prepared to look after all the
returns at the same time.
Contact information follows:
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321
New email to [email protected] <mailto:[email protected]>
www.centa.com <http://www.centa.com/>  www.david-ingram.com
<http://www.david-ingram.com/>
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 in connection with personal or business
affairs such as at www.centa.com <http://www.centa.com> . If you forward
this message, this disclaimer must be included."
Be ALERT,  the world needs more "lerts"
This from "ask an income tax and immigration expert" from www.centa.com
<http://www.centa.com/>  or www.jurock.com <http://www.jurock.com/>  or
www.featureweb.com <http://www.featureweb.com/> . 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, the 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.
Your name has been added to our list because of an emailed enquiry. At the
moment there are some 200 unanswered questions and many are the same.  To
justify the time spent answering these questions I simply send them to the
list.  this has two advantages:
1. 3,000 other people sometimes give me a better idea or a better answer.
2.I do not answer the same thing five times in one week.
This list was $125.00 a year from 1992 to 2001.  It is free for the time
being.  However, if you do not want to be on it, just send back any message
received with the word remove and I will be happy to remove you.
Remember though, if you ask to be removed before your question gets
answered, you will not get an answer because they go to the whole list to
justify my time.
david ingram - [email protected] <mailto:[email protected]>
(604) 913-9133 - (604) 913-9123 www.centa.com <http://www.centa.com>
Cell is (604) 657-8451 (10 AM to 10 PM seven days a week)
US/Canada Real Estate Taxation Specialists
US / CANADA / MEXICO
Working Visa and Income Tax Specialists
---
Outgoing mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.542 / Virus Database: 336 - Release Date: 11/18/03
---
Outgoing mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.542 / Virus Database: 336 - Release Date: 11/18/03

Trackback

Trackback URL for this entry: http://www.centa.com/trackback.php/UsCaWeekofMon20031117000455.html

No trackback comments for this entry.

0 comments