Canadian working in the US - Provincial tax returns? -
Subject: Canadian working in the
US - Provincial tax
returns?
Expert: [email protected]
Date: Wednesday April 04, 2007
Time: 01:27 PM -0400
QUESTION:
Hello, I have been working in the US since June of 2006. I understand i need to produce a canadian federal tax return for the time i've worked in canada but what about provincial (quebec) returns? I have heard that it was not necessary if i was not a resident of the province as of december 31st 2006 (which was the case for me).
any truth to this? thanks in advance.
_____________________________________________________Expert: [email protected]
Date: Wednesday April 04, 2007
Time: 01:27 PM -0400
QUESTION:
Hello, I have been working in the US since June of 2006. I understand i need to produce a canadian federal tax return for the time i've worked in canada but what about provincial (quebec) returns? I have heard that it was not necessary if i was not a resident of the province as of december 31st 2006 (which was the case for me).
any truth to this? thanks in advance.
david ingram replies:
Sorry, you either pay a federal surtax or you pay a provincial tax. The directions are clear. When you leave the province / country, you put down the province of residence the day you left.
Make sure you fill in federal form T1161 if you left a house or cabin or stock / securities account behind. Penalty is up to $1,500 for being late with it even if you do not owe tax.
And don't forget - you file your US 1040 as a "dual status" payer. Check off yes in box 35A at the top of page 2 of the 1040. This also necessitates the filing of a 1040NR "DUAL STATUS STATEMENT" Read the instructions referred to on the top of page 2.
If you left an RRSP or other accounts behind, you also have to deal with the bottom two questions on Schedule B of the 1040 where the questions are posed about foreign accounts and foreign trusts. US Penalties for failing to report here are up to $500,000 plus 5 years in jail.
Do not worry about the form 3520 mentioned. You can substitute a form 8891 which takes 20 minutes instead of three or four hours.
david ingram wrote:
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
$1,600 would be for two people with income from two countries
David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty
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Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
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
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Be ALERT, the world needs more
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David Ingram gives expert income
tax & immigration help to non-resident Americans & Canadians from
New York to California to Mexico family,
estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence &
authority.
Phone consultations are $400 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product remains in
Canada or a phone consultation is in Canada.
This is not intended to be definitive but in
general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only - no self employment or rentals
or capital gains - you did not move into or out of the country in this
year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no
rental
$1,200 would be the minimum with a move in or out
of the country. These are complicated because of the back and forth foreign tax
credits. - The IRS says a foreign tax credit takes 1 hour and 53
minutes.
$1,500 would be the minimum with a rental or two in
the country you do not live in or a rental and a business and foreign tax
credits no move in or out
$1,600 would be for two people with income from two countries
$2,800 would be all of the above and you moved in
and out of the country.
This is just a guideline for US / Canadian
returns
We will still prepare Canadian only (lives in
Canada, no US connection period) with two or three slips and no capital
gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely
$450
And an American only (lives in the US with no
Canadian income or filing period) with about the same things in the same range
with a little bit more if there is a state return.
Moving in or out of the country or part year
earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00
each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00
each.
18 RRSPs would be $900.00 - (maybe amalgamate a
couple)
Capital gains *sales) are likely $50.00 for
the first and $20.00 each after that.
Just a guideline not etched in
stone.
This from "ask an income trusts tax and immigration expert"
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