US resident on H1B does well

QUESTION: My wife is a canadian citizen, I am a canadian
resident. She works in Canada and her taxes are being withheld
from her paycheck. I am on H1 in US, for me taxes are being
withheld in US. Since I am here in US for more than 183 days, I
am considered a resident alien for tax purposes and have to file
1040. Lately I have been reading alot about what forms to file
and stuff. I would want to double check with you before I prepare
my return.
For Federal return, I will have to file married filling jointly
Form W-7 for ITIN number for my wife with a notarized copy of her
passport
a)A declaration stating that I am claiming my wife to be resident
signed by both to get a standard deuction of 16,400
b)Form 1040
c)Form 2555 for foreign income exclusion (for my wife, her income
is about 43000 CDN$)
d)Form 1116 for foreign tax credit
e)Schedule B (for interests on deposits from savings account in
canada and usa)
f)Form 8819 (for RRSP my wife has in Canada, even though she
didnt put any money in them last year)
g)Form TDF.90-22.1(for me and her to show all the bank accounts
in a foreign country)
If these are the correct forms I have few questions.
On form 1040, Line 7, I have to put all wages mine from W2's and
hers from her T4's. So I have to do the conversion from Cdn to US
dollars
Ques) what conversion rate should I use to convert Canadian to
US? -              US to CANADA = 1.21163240    CANADA TO USA
.825333000
On form Line 8a I have to put all the bank interests paid to her
and me and attach Schedule B since the combined intersts from
banks from US and Canada for me and her is more than $1500 US
Dollars
Ques) Should I be using only one schedule B for both of us? -
Only one schedule B - answer yes to both questions on bottom
On line 21 of 1040, I can claim her foreign income exclusion by
filling form 2555 or form 2555EZ
Ques) Is it better to claim foreign income exclusion or file form
1116 to claim foriegn tax credit. - Depends, if there are
children involved, it is sometimes better to file an 1116 - have
to do it both ways.  No children - always better to file 2555.
Ques) By claiming foreign tax credit will I be able to increase
my refund?
Another big Question which I am not able to answer myself is.
Since I will be filling my return in Canada and my wife will also
be doing the same as a resident for both of us, we both have
interests on deposits from Banks in Canada and I have interests
on deposits from Banks in USA. On these interests the taxes hasnt
been withheld but I would have to pay taxes as they are taxable
and will increase mine and hers gross income.
Ques) How will I calculate the taxes for interests on deposits
from Banks in Canada for her and me to get a credit on Form 1116
and vice versa to get a credit on Canadian tax return so that we
dont get double taxed on this income? - You owe 10% tax to Canada
on your interest if you are a non-resident - you owe more or less
if you are a factual resident. - If a non-resident - yourt
permanent resident staus is in danger,  If a resident, you owe
tax to Canada on your US income and the joint incoem tax return
is a waste of time.  If you are a factual resident _ meaning you
intend to abandon your PR card, get a US Green Card and take you
family to the US) you would report the US income on line 104 amd
deduct it on line 256
Ques) For RRSP'S from my wife on which I am a beneficery,
do we have to file 2 seperate froms 8819, one as an Annutant for
her and one as a beneficery for me(She has RRSP from bank of
Montreal from 2003 and she only put $5 to open a RRSP with ING
Direct last year, with RRSP in Bank of Montreal she did not put
any money last year?  Both 8891 forms should be filed as a
benefiicay and all questions answered,
Ques) Do I also report RRSP accounts on form TDF.90-22.1 - YES
Your reply will be highly appreciated.
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david ingram replies:
This is a $400 question but I am answering it for the hell of it.
I have answered them individually within the question is a
different manner than I usually do.
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week  Vancouver (LA)
time -  (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 for expert help, assistance,
preparation, or consultation  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"
Sorry - too many questions to answer (over 1,800 at the moment-
all of which I have saved over the last two years with the
intention of answering them).  I am adding your name to our Q & A
list and another question may answer yours. AND, I have answered
over 6,000 questions at
http://www2.jurock.com/askexpert/expert.asp?aid=121&cid=63 or
www.centa.com  and you should be able to find your answer by
going there or  more specifically, to
http://www.centa.com/search.htm
However, if you can not find your answer,
answers to this and other similar  questions can be obtained free
on Air on the last Sunday morning of each month (Sunday Jan 29,
2006 is next).
On the last Sunday at 9:00 AM on 600AM in Vancouver, david ingram
will be  a  guest on Fred Snyder of Dundee Wealth Management's
LIVE talk show called "ITS YOUR MONEY"
Those outside of the Lower Mainland of British Columbia will be
able to listen on the internet at
www.600AM.com  (9:00 AM Los Angeles Time every Sunday morning)
Call (604) 280-0600 to have your question answered.  BC listeners
can also call 1-866-778-0600 free of charge.
Callers to the show and questioners on this board may also attend
the Vancouver Thursday Night seminars on finance and making your
Canadian Mortgage Interest deductible.
There are 17 different topics covered and every Thursday night is
different.  They are presented by Fred Snyder at his office at
1764 West Seventh (the Spence Diamond building at 7th and
Burrard) in Vancouver.  Call (604) 731-8900 to register and be
sure to bring your spouse, significant other or financial
advisor.
I will be at the Thursday evening following my last Sunday
appearance. I will be at the Thursday, Feb 2nd 7 PM seminar to
talk for a short time about mortgage interest as a deduction.
And, of course, we are always here to prepare your US / Canadian
and State returns by emailed pdf files, snail mail, fax or
courier.
        -------------
David Ingram specializes in giving expert income tax and
immigration help to American and Canadian citizens living out of
their home countries from Zimbabwe to Saudi Arabia to Mexico to
China or Chile - Cross border, Non-resident - dual citizen - out
of country investments are all handled with competence and
authority.
This from "ask an income tax and immigration expert" from
www.centa.com or www.jurock.com or www.featureweb.com. David
Ingram deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems
for the United States, Canada, Mexico, Great Britain, United
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Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba,
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US, UK, GB, and any of the 43 states with state tax returns, etc.
Rockwall, Dallas, San Antonio Houston
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Immigration Tips, Income Tax  Immigration Wizard Antarctica
Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6
NR 6 Non-Resident Real Estate tax specialist expert preparer
expatriate anti money laundering money seasoning FINTRAC E677
E667 105 106 TDF-90 Reporting $10,000 cross border transactions
Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US
Alaska,  Alabama,  Arkansas,  Arizona,
California,  Colorado, Connecticut,
Delaware, District of Columbia,  Florida,
Garland, Georgia,  Hawaii,  Idaho,  Illinois,
Indiana,  Iowa,  Kansas,  Kentucky,
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Massachusetts, Michigan, Minnesota,
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Nevada, New Hampshire,  New Jersey,
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and Dallas Houston Rockwall Garland
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international non-resident cross border income tax help
assistance expert preparation & immigration consultant david
ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) &
divorce preparer preparers consultants
David Ingram specializes in giving expert income tax and
immigration help to American and Canadian citizens living out of
their home countries from Zimbabwe to Saudi Arabia to Mexico to
China or Chile - Cross border, Non-resident - dual citizen - out
of country investments are all handled with competence and
authority.
.
.
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