Canadian from Montreal Quebec living & working in

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Mr. Ingram (or to whom it may concern),
I found your website and felt compelled to ask you some questions regarding my taxes.  Here are some details about me and my situation:
1) I am a Canadian citizen, and I relocated to the United States (Cleveland, Ohio) from Montreal, Quebec (Canada) on Feb. 21st, 2003.  I have since returned to Canada for visits, but nothing longer than an extended weekend, or about 2 weeks this past Christmas.  My family still lives in Montreal.
2) I did not prepare my Canadian Federal & Provincial taxes for the taxation year 2002, but I plan to file late.  In 2002, I was employed in Montreal until August.  I was then laid off and given a severance package.  I collected Unemployment Insurance/benefits from about November 2002 until I left in Feb 2003.  I then advised UI that I was no longer going to claim benefits because I found a job.  I gave them my US address (so they could send the necessary forms for my 2002 Canadian taxes - which as I stated I haven't filed as yet - and I guess for 2003 since I collected UI in Jan and Feb of 2003 before I left).
3) When I relocated, I gave up my apartment in Montreal, sold my car, and had my mail re-routed to my new US address.  I still have a couple of Canadian bank accounts, a Canadian credit card, and an RRSP (I no longer make contributions).  My Quebec driver's license and my Medicare card expired in December 2003, and I had the renewal forms sent to my mother's address (in Montreal).  However, I have not as yet renewed them.  As well, I possess a valid Canadian passport.
4) I am part of a Canadian incorporated business.  I am on the charter with a partner.  The business was incorporated in 2001, but we haven't updated anything since then, haven't made any profits, and unfortunately have never filed tax returns for it.  Not good, yes I know, it was/is poorly managed since we were both employed fulltime as well.  Since I've relocated, I never got the chance to remove myself or at least change my address on the charter.  I do not know if any of this information is necessary or relevant.
5) Here in the US, I pay taxes / have taxes deducted from my paycheck.  As well, I possess a valid Ohio state driver's license.
My questions for you are:
1) Do I pass the "substantial presence" test necessary to file my US returns as a resident alien for tax purposes?  If yes, will I have to report the Canadian UI I collected in Jan & Feb 2003 to the US?  And will I have to report any RRSP interest or earnings to the US?
3) Even if I am considered a US resident alien for tax purposes, am I still considered or will I still be deemed a resident of Canada?  If so, will I then have to file Canadian taxes too?
4) What are your rates for Canadian (Federal & Provincial) tax preparation?  What are your rates for US tax preparation?
Please feel free to contact me for any other information that you might require.  Thank you very much!
Regards,
RXXXXXXXXXXXX
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david ingram replies:
1.    You will file a Federal 1040 and an Ohio IT-1040NR for 2003.
Your 1040 could be a dual status return where you only report the US income and do not report the Canadian Income or you can elect to file your world income where you report the Canadian Income, and claim the standard deduction and a foreign tax credit for the tax paid to Canada.  we have to do it both ways to decide.  However, single people are usually better off filing the dual status and couples are usually better off filing the world income.  
As a resident alien for tax purposes, you hbave to report the internal earnings of the RRSP on a form which has not been released yet.
2)     no question
3.    We have to file a Canadian departing return for 2003 where only the Canadian income is reported and your personal exemption amounts are pro-rated.  Ditto for Quebec.
Your Canadian Corporation poses problems for you as a US resident. US Form 5471 should be filed for the corporation The penalty for failure to file it is $10,000 whether the company made a profit or not. - Ouch!  
4.    Your Quebec, Federal, Ohio and US Federal would cost between $700 and $1,000 Canadian. Whatever you do, do NOT have someone do the US and someone do the Canadian.  It just does not work and you will go crazy trying to get the work done correctly and co-ordinated.  I hate to tell you but the Canadian Corporation will be about $1,100 by itself on your US return but will be a one time charge if you own 50% or less and the shareholdings do not change.  So, if you decide to sell it now or dispose of it now, you would also have to file a 5471 for 2004 but that would be it.
David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321 
[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 immigration planning and bankruptcy expert consultant guru or preparer  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 gambling refunds 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.
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Your name has been added to our email list because of an enquiry we have received,  we may not answer your question but 
another similar question will be as we lump them.
You may find more answers at www.centa.com
If the number of messages is too many for you or the US / Canada Taxation and Immigration information is not of interest, simply  reply with a remove request.
David Ingram of the CEN-TA REALTY  Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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