QUESTION:
I am a Quebec teacher working as of Nov 1, 2004 in California on an H1B
visa. I Arrived applied for SSN and was pad about 38000 in 2004 by the
organization I work for with taxes deductions taken out etc. I will be
working until June, and then returning to my teaching job in quebec. So, I
have
2004 Quebec and US income.
will have 2005 US and Quebec income.
I own no properties, in either country. Still have my Quebec Medicare and
drivers licences. Have no RRSP contibutions in either country.
Questions:
1) Are there any tax forms that I have failed to fill out?
2) What is my best tax strategy for 2004 if any?
3) Same as 2 but for 2005.
Is there anything else I could do to make it more simple or strightforward
...and perhaps save a bit on taxes?
Regards,
RXXXXXXXX
==========================================
david ingram replies:
1. You should write to Quebec Medicare and explain your position and ask
them to put in writing that you are covered when you have left the country
on an H1B visa.
2. You are a resident of Quebec and taxable in Quebec on ALL of the income
earned in California.
3. You will file a 1040NR and claim an exemption from US Federal Tax under
Article XV of the US Canada Tax Convention for 2004. You will file the same
tax return for 2005 but not claim an exemption under the treaty because your
income will be over $10,000 US and do not qualify.
4. You will file a California 540NR for both years. Because you are
required to report your "world" income to California and Calculate
California tax on the gross and then pro-rate it, you will leave some tax
behind in California. You will do the same thing for 2005.
For Canada, you will file your ordinary Canadian return and report the US
income on line 104 for 2004 and for 2005..
For 2004, you will then claim a foreign tax credit for the US social
Security and Medicare you have left behind and then claim the California Tax
you left behind.
For 2005, you will do the same thing but you will also claim the US Federal
tax you leave behind as a foreign tax credit.
For 2004 AND 2005 for Quebec, you will also report the California income on
top of your other income as well and pay tax to Quebec. If you do not get to
claim all the foreign taxes paid on your Federal Return, you can claim the
excess on your Quebec return.
George Arora in our office is a California CPA, MBA and MST (Master of
Taxation).
He would be glad to look after all these returns including Quebec (we do
more Delaware returns then Quebec). You will have a devil of a time finding
anyone "anywhere" to look after them for you. Whatever you do, make sure
you have someone who can do ALL the returns at once. At all costs do NOT
get someone to do the US and someone to do the Canadian. You would never
get someone to do the Federal Canadian and someone else to do the Quebec
Return.
We specialize in multi-country multi-state returns by snail mail, email, fax
and courier.
If more than 5 pages please fax - Sending 45 pages by email literally takes
more time to open and print the information than it does to do the return.
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth
Management 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
www.600AM.com <http://www.600am.com/>
Local calls are taken at (604) 280-0600 and Long Distance calls are taken at
1( 866) 778-0600
I do not know how far the LD line reaches.
=========================================
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 Fax (604) 980-0325
Email to taxman at centa.com <mailto:taxman at centa.com>
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<http://www.david-ingram.com/>
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