QUESTION: Hi David, I really enjoy your newsletter. I have a fairl complicated situation. I am a surgeon and will be moving to Seattle from Sept 2006 to Sept 2008 for a two year research fellowship (no clinical duties, no patient involvment). The majority of my income will be provided directly to me from my home department at the University of Toronto. However, I am in the process of applying for other stipends that will be paid to me through the lab in Seattle. In essence, although I will be living in Seattle most of the time, I will have income from both countries. How would I go about filing tax forms and would I be taxed in each country and if so, would each country tax my total income? Secondly, I may practice on the side in either British Columbia or Alberta for perhaps a couple of days a month. What kind of tax implication does this add to my situation? Thirdly, the folks in Seattle think that a J1 visa would be all that I need since I do not have any clinical duties during my two year duration. Do you think this is the right type of VISA to apply for? Fourth, do you think I need to liquidate my Canadian assets (home, RRSP's) and so forth in order make clear my place of residency is in Seattle during those two years? I hear there may be certain tax advantages in doing this. Lastly, my wife is also a physician and is planning on working when were are both down there. How does this change our tax situation or could we file our returns separately? If she chooses to work in the US, she will most likely not work in Canada during that time. Also, during our first year in Seattle, my wife will be on maternity leave. If I come down on a J1, does she need to apply for a J2. I hear that a Canadian spouse of a Canadian coming down to the US on the J1 does not need a visa to enter the US - is this true? Lastly, if she does need a J2, she will ultiamtely need a H1-B during our second year in Seattle in order for her to work. How do you going about changing from a J2 to a H1B. I hear that it is quite difficult and a waiver is required (to waive two year return to country of origin). Is this waiver also necessary for people trying to convert from J2 to H1B or is it only necessary for people trying to convert from J1- to H1B? Thanks in advance for your help! ------------------------------------------------ david ingram replies: A J-1 visa usually indicates that you are in the USA on a Student visa and allows you to remain a member of your Ontario Medical plan, use your Ontario driver's licence and keep your car(s) registered in Ontario. It also leaves you (for the most part) as an official non-resident of the United States and you would file a 1040NR income tax return. Washington State does not have a personal income tax so there is no State return to file. Since all of your income is coming from Canada and you are a non-resident of the US, you will file a Canadian return as a Factual resident of Canada and pay tax to Canada. A Canadian house that is rented out to a stranger and RRSP accounts do NOT have to be liquidated. Getting rid of driver's licences, car registrations, Provincial medical plans and other affiliations can get rid of your attachments to Canada but it has to be pretty specific to do so. There is no doubt that you would pay less tax if you were a resident of the US at this time because you could file a joint return with your wife and effectively split your income with your wife while she is on maternity leave and then split the income again on a joint return when she starts working. Perhaps you should consider having your wife dispense with her J2 and go direct to an H1B or TN and go as a working physician to start with. You are obviously too complicated to deal with in this Q & A. I think you should likely do as I suggested to the previous questioner. Give Joe Grasmick a call (www.grasmick.com) and ask him about the visa choices. Another couple of suggestions for US Immigration lawyers you could call in Vancouver (where you and your wife may be working a bit) would be: David Andersson, Terry Preshaw or Michael Jacobsen. Terry Preshaw has an office in Everett as well as Vancouver. I do not have their phone numbers where I am writing this but can send them to you if you wish. I would be glad to look after your tax returns when necessary but am clearly out of "my" league when it comes to your immigration / working visa situation. If there is one thing I pride myself on, it is knowing (and recognizing) when it is necessary to send someone to a special specialist. --------------------------------------------------- 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, I, david ingram am a permanent guest on Fred Snyder of Dundee Wealth Managers' 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/> Call (604) 280-0600 to have your question answered. BC listeners can also call 1-866-778-0600. Callers to the show and questioners on this board can also attend the Thursday Night seminars on finance and making your Canadian Mortgage Interest deductible. 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 <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://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. 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CEN-TA Cross Border Services - Tax, Visas, Immigration
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