Canadian Nurse working in California - where does she

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This was a simialr question to the previous  question about a TN visa =
holder working in California  It was answered a couple of months ago in =
March 2004
Dear Mr. Ingram,
Hello! I came across your name on I'm hoping you can help me. =
 I am Canadian (from Victoria) working as a nurse in California. In =
2002, I did not earn a cent in Canada, but 100% of my income was made in =
the US. I did keep an apartment in Victoria for about 8 months, and =
concurrently kept an apartment in California for 4 months. I filed =
Canadian taxes and no US taxes (although US taxes were deducted from my =
paycheque). Now I have a US accountant about to start working on this, =
but she isn't familiar with cross boarder issues.=20
Yesterday, I received a letter from Revenue Canada stating that I owe =
them $4500 (which strangely enough is the amount of tax withheld on my =
W2's).  I feel as if I am being double taxed.  That letter, by the way, =
was dated Dec. 15/03, but the envelope was postmarked March 15/04, and I =
was already charged over $200 in arrears interest even though it is my =
first "bill".
Can you recommend where I should go from here? Should I be seeing an =
accountant here? Can I work with you via the internet? If so, what is =
your fee structure?=20
Thank you for your help,
- -------------------------------------------------
david ingram replies:
At the risk of sounding commercial, you shouldn't be dealing with an =
accountant who is not familiar with cross border issues.
You should pack it all up and send it to our office.
Our charge to fix 2002 and do 2003 would likely be in the $1,000 > =
$1,200 Canadian range but it would be done right.  And I charge more for =
talking about it (consulting) than I do for doing.
Your first tax liability for 2002 was to the US and you should have =
filed a US tax return before a Canadian one. You should not have been =
taxed in Canada from what you have told me.  Whomever did your Canadian =
Return did not understand Article IV of the US Canada Income Tax Treaty.
You should have filed as a departing resident of Canada for 2002.
Article IV - Fiscal Domicile - (it is the same number in most treaties)  =
For the purposes of this Convention, the term "resident of a Contracting =
State" means any person who, under the law of that State, is liable to =
taxation therein by reason of that person's domicile, residence, =
citizenship, place of management, place of incorporation or any other =
criterion of a similar nature, but in the case of an estate or trust, =
only to the extent that income derived by the estate or trust is liable =
to tax in that State, either in its hands or in the hands of its =
beneficiaries. For the purposes of this paragraph, a person who is not a =
resident of Canada under this paragraph and who is a United States =
citizen or alien admitted to the United States for permanent residence =
(a "green card" holder) is a resident of the United States only if the =
individual has a substantial presence, permanent home or habitual abode =
in the United states and that individual's personal and economic =
relations are closer to the United states than any other third State.  =
The term "resident" of a Contracting State is understood to include:=20
(a) the Government of that State or a political subdivision or local =
authority thereof or any agency or instrumentality of any such =
government, subdivision or authority, and=20
(b) (i) A trust, organization or other arrangement that is operated =
exclusively to administer or provide pension, retirement or employee =
benefits, and=20
    (ii) A not-for-profit organization that was constituted in that =
State, and that is, by reason of its nature as such, generally exempt =
from income taxation in that State.=20
2. Where by reason of the provisions of paragraph 1 an individual is a =
resident of both Contracting States, then his status shall be determined =
as follows:=20
(a) he shall be deemed to be a resident of the Contracting State in =
which he has a permanent home available to him. If he has a permanent =
home available to him in both Contracting States, he shall be deemed to =
be a resident of the Contracting State with which his personal and =
economic relations are closer (centre of vital interests);=20
(b) if the Contracting State in which he has his centre of vital =
interests cannot be determined, or if he has not a permanent home =
available to him in either Contracting State, he shall be deemed to be a =
resident of the Contracting State in which he has an habitual abode;=20
(c) if he has an habitual abode in both Contracting States or in neither =
of them, he shall be deemed to be a resident of the Contracting State of =
which he is a national;=20
(d) if he is a national of both Contracting States or of neither of =
them, the competent authorities of the Contracting States shall settle =
the question by mutual agreement.=20
If you read this right, you were not taxable in Canada in 2002.  You =
WERE taxable in the US.
Answers to this and other similar  questions can be obtained free on Air =
every Sunday morning.
Starting this Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of =
Cartier Partners and I, David Ingram  will be hosting an INFOMERCIAL but =
LIVE talk show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the =
internet at
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration 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=20
New email to [email protected]
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 =
If you forward this message, this disclaimer must be included."
Be ALERT,  the world needs more "lerts"
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Reporting $10,000 cross border transactions
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