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Expert: [email protected]
Date: Monday December 29, 2003
Time: 03:25 PM -0800
QUESTION:
1. I am a Canadian citizen working as a lawyer in New York City under a =
TN
Visa. I reside in New York City and work here 100% of the time.
2. For US Federal Tax purposes, I filed as a Non-resident last year =
because I
did not satisfy the substantial presence test (I was working in the US =
for
less than 183 days in 2002). This year, I am planning to file as a
Resident.
3. I also intend to pay New York state taxes. My question relates to =
whether I
should filed as a "resident" or "non-resident". Given that I live in =
New
York for almost 100% of the year, under NY state tax laws I would be
considered a resident. However, I have been told time and again by =
other TN
visa holders living in NYC that I am exempt from New York CITY tax. I =
have
unfortunately been unable to find any authority on this issue. If I =
file as
a "resident", it would look rather odd to not submit any City tax as =
well.
Can you provide any clarity on this issue?
4. Lastly, I have not been filing tax returns in Canada to avoid double
taxation. I have no property in Canada, my only assets in Canada are =
one
banking account and an RRSP account. I've done everything possible to =
break
my ties with Canada to avoid being considered a Canadian "resident" for =
tax
purposes, including not taking advantage of provincial health care =
services.
Is there any risk whatsoever that Canadian tax authorities would come =
after
me and require that I be taxed in Canada as well?
Thank you
JXXXXXXXX
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david ingram replies:
I found it rather strange that I am in West Vancouver and getting a New =
York "City" tax question and then went to Google and typed in - New York =
US Canada Income tax -and our web site came up number two and three and =
the number one hit was a credit card bureau of some sort. So I guess I =
am it. I have numbered your paragraphs.
1. Understood.
2. You likely should have filed as a dual status resident (see box 37b =
on [page 2 of the 1040) last year and should also have filed and paid =
New York State and city taxs in 2002. If taxes were deducted properly on =
your 2002 W2 slip, you would likely have received a state refund. You =
can still file that return now.
3. Interestingly, I actually worked with a lady in Rudolf Guiliani's =
office three years ago on this very question which seemed to have risen =
out of some folklore. these things usually happen when one person says I =
didn't pay something "because" and another 50 people follow suit. I =
could compare it to a North Vancouver City By-law which limits parkin =
gon a city street to 72 hours. Our Motorhome is usually on the street =
and I have been moving it pretty religiously from May to a coupl eof =
weeks ago when it was towed because I completely forgot to move it. I =
had got pretty sloppy and had started leaving it four or five days and =
fianlly someone gave me a $125.00 bill for failing to move the vehicle.
The same thing happens with the City of New York. Their tax law has =
nothing to do with immigration. It applies to people who live in New =
York City just as the Bronx taxes apply. It applies to illegal Irish, =
Canadians and Hispanics and Jamaicans who have managed to get into the =
country without a visa and are living and/or working there.
4. Article IV of the US / Canada Income Tax treaty takes away the =
need to irradicate all your Canadian connections. You do not qualify =
for Canadian Provincial Medical olans if you do not sleep in your =
province more than 183 days in a year. Goto www.centa.com and read the =
US/Canada Taxation section on the top left. It has a copy of Article IV =
and a bunch of sample tax cases that are all old enough to make my =
point.
If you have no income from Canada, you are not taxable in Canada with a =
TN visa if you do not leave a wife and kids in Canada or spend a lot of =
time in Canada.
However, there is a problem with your RRSP. You are a resident alien =
for US tax purposes and in my opinion are required to report the =
internal earnings and the existence of your Canadian RRSP's under the =
terms of REV-Proc 2002-23 and a newer one whose number escapes me for =
the minute.Goto www.cetna.com and read the August 2003 newsletter to get =
the details. Not to scare you too much, but failure to report the RRSP =
on a form TD-F.90 can result in a penalty of up to $500,000 PLUS five =
years in jail. the record in my office was a $10,000 fine for a 105 =
year old lady. This form by the way is NOT even part of the tax return. =
It goes to the Department of the Treasury in Detroit. See the two =
questions at the bottom of Schedule B for thje reference to these two =
reporting requirements.
Good luck. If you need help, this is what we do for a living by fax, =
email, snail mail, courier and phone. Contact numbers follow.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321=20
[email protected]
www.centa.com 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 & =
the author and any and all non-contractual duties are expressly denied. =
All readers should obtain formal advice from a competent financial, or =
real estate planner or advisor & appropriately qualified legal =
practitioner, tax or immigration specialist in connection with personal =
or business affairs such as at www.centa.com. If you forward this =
message, this disclaimer must be included."
This from "ask an income tax and immigration and bankruptcy expert" from =
www.centa.com or www.jurock.com or www.featureweb.com. Canadian David =
Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems for the =
United States, Canada, Mexico, Great Britain, the United Kingdom, =
Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, =
Antarctica, 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, American and =
Canadian and Mexican and any of the 43 states with state tax returns, =
etc.
income tax wizard wizzard guru advisor specialist consultant taxman =
Alaska, Alabama, Arkansas, Arizona, California, Colorado, =
Connecticut, Delaware, District of Columbia, Florida, Georgia, =
Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, =
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, =
Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, =
New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, =
Oklahoma, Oregon. Pennsylvania, Rhode Island, South Carolina, South =
Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, =
Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, =
Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, =
Newfoundland, Yukon and Northwest and Nunavit Territories, Mount =
Vernon, Eumenclaw, Coos Bay and Dallas Houston Rockwall Garland Texas =
Taxman and Tax Guru and wizzard wizardYour name has been added to our =
email list because of an enquiry we have received, we may not answer =
your question but=20
another similar question will be as we lump them.
You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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