QUESTION:
My family and I have returned to British Columbia after six years living and
working in North Carolina. I have been teleworking from British Columbia
with a company in NC on a contracting basis since October 1, 2004. I had
been a full time employee with the company for four years previously in the
states working on a TN1 visa. I no longer own real estate in NC nor maintain
a residence there.
My question is: How do you manage that tax situation? Which country receives
which percentage of income taxes? Your advice is appreciated.
-----------------------------------
david ingram replies:
Assuming that you are a Canadian and not an American (the answer would be
different and there is another question from an American who came in Feb
2003 and worked in the US until Oct as well) answered in this same group of
Q & A's).
your tax return has to be done at least two ways and maybe three ways to get
the best results.
1. The Canadian return would start with the income you earned from the US
after arriving in Canada. That income does not have to be included on your
US return unless it is included on a 2004 W-2, in which case you have to
stop the W-2 process now. On the other hand I expect that the best way to do
your return is to include it on the US return and claim a foreign tax credit
for the tax paid to Canada. That way you can continue to file a 1040 at a
joint tax rate for 2004.
2. You can (and most consultants would do so) cut your US income when you
left the country and file a 1040NR which will result in higher US taxes.
3. Whatever happens, make sure that you are not having US taxes, Social
Security or Medicare from you pay while working in Canada. If they have
already taken any of these off for 2005, get them to reverse it. Your ONLY
tax liability now is to Canada.
And remember - the commercial here - we specialize in your type of return
and can look after it by fax, email, snail mail, and courier.
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 host a LIVE talk show called "ITS YOUR
MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
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Callers to the show are invited to attend free seminars on financial
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held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604) 731-8900
for more information.
=========================================
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US / Canada / Mexico tax, Immigration and working Visa Specialists
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North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
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