My_question_is: Applicable to both US and Canada
Subject: TN holder tax
Expert: taxman at centa.com
Date: Sunday January 21, 2007
Time: 03:42 PM -0500
QUESTION:
Hi there,
I am Canadian Citizen and a TN holder starting from middle of last October
and working in a US company in US since then.
My questions are:
1. Since my present in US is not over 183 days( for the two years before
last year, i had no present in US), the resident status for me in US should
be non resident alien for tax propose, am I right?
2. Should I use Form 1040NR for my income tax?
3. Can I claim my wife ( who is a Canadian Citizen too) and my son ( who is
an US Citizen) as my dependents to lower my tax rate?
Thank you very much for your help.
Steve
----------------------------------------
david ingram replies:
If you are just dillydallying in the USA a bit at a time and your family is
in Canada, then a 1040NR is a possibility. On the other hand, if you have
moved there with the wife and child, then you should file a 1040 Dual Status
return PLUS a 1040NR Dual Status Statement. You can claim your wife and
child as dependents.
Depending upon how much you made in Canada before going to the USA, it might
be better to file a Joint 1040 with your wife by reporting your Canadian
income as well and claiming a foreign tax credit for the taxes, CPP and EI
paid to Canada on form 1116.
i.e. You also have the right to file a plain 1040 as a joint return with
your wife if you both report your world income for the year. Usually, a
move in late October would not make this advantageous but a move from
January to May usually does.
You will need an ITIN for your wife which you get by filling in from W-7 and
a SSN for your son - fill in form SS-5.
You need to file a departing Canada return with forms 1161 and maybe 1243
and 1244.
Of course, we are set up to look after this type of return by email (pdf
files only), snail mail, fax or courier.
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