Canada to New York State - ask international income

Sent: Sunday, August 21, 2005 9:23 PM
To: 'centapede at lists.centa.com'
Subject: US state taxes
I have a client , a taxpayer resident in Canada , but employed in
the US. He commutes 3 times a week to New York. On his pay cheque
they are deducting New York  State taxes. Should we file a New
York state tax return & get these taxes back ? I file a IRS
return & he usually owes them taxes , but the state taxes I claim
as a deduction from his US taxable Income.
   NXXXXX
============================================
david ingram replies:
You should file the New York State Income Tax return - IT-203 is
the correct form.  If it results in a refund, the refund is
taxable on next year's 1040 or 1040NR.
Then, for the Canadian return, you would deduct the amount of:
US Federal Income Tax - plus
FICA (social security)  - plus
Medicare - plus
New York State to use on line 431 for the purposes of the Foreign
Tax Credit on the Canadian Tax Return
Something you can consider is that he has the right to file a US
1040 joint return by making the election to include his wife's
income and then exempt it or claim a foreign tax credit.  The
joint rates will lower his (or her federal tax.  Of course, it
just reduces the foreign tax credit and results in more tax for
Canada and the other thing is that if he is telecommuting and
part of the money is being earned in Canada, he should be
exempting that or deducting it from the US earned income.
You should enjoy the little joke included.
The difference between the short and long income tax forms is
simple. If you use the short form, the government gets your
money. If you use the long form, the tax advisor gets your money.
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 9 AM to 9 PM 7 days a week (please do not fax
or phone outside of those hours as this is a home office)
email to taxman at centa.com
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 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 www.centa.com. If you forward this
message, this disclaimer must be included."
Be ALERT,  the world needs more "lerts"
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