How to file US/Canadian taxes for 2007 -


QUESTION:

We hired a "tax professional" recommended by a financial 
adviser to handle our tax situation for the year and things 
seem totally wrong. My husband is a Canadian citizen that 
got his US green card and entered the US in April 2007. 
We live in Ohio and he is the only income earner since I 
am on maternity leave. So he has Ohio income, income 
earned in Toronto while still a resident of Canada and I 
have income from Connecticut where I was working 
before moving to Ohio. He also has RRSPs that we don't 
know what to do with. The tax guy filed our US tax as a 
1040 married filing jointly listing both of our US jobs 
(mine in Connecticut before having the baby and his in 
Ohio now) for our income. He did not list any of the 
Canadian income at all or mention the RRSPs or anything. 
We were under the impression that since he was a 
Canadian resident until April and then a permanent US 
resident thereafter that we had to file to include the 
Canadian income and then file a form 2555 to exclude that 
income to keep from being taxed on it twice. 
On the Canadian return the tax guy didn't add in any of 
the US income, including my income from my previous 
job in CT. He only shows my husband's Canadian income 
from the job he was working in Toronto up until his 
immigration to the US in April. Does this all seem right or 
totally wrong to you all?

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david ingram replies:

Your husband should file a departing Canada return.  If he left assets behind in Canada, he should file a  form T1161. That form is due by April 30th to avoid a $2,500 penalty ($25.00 per day with a minimum of $100 and a maximum of $2,500 for 100 days).

For the US, you had a choice of filing a return as MFS (Married Filing Separately) and a Connecticut and an Ohio return to match or a joint return with your husband if he reported his Canadian income on 1040.

If you did not report the Canadian income, he should have filed a MFS 'DUAL STATUS RETURN' which only reported the US income and did not claim a standard deduction.

If you have already filed the 1040 with standard deduction, you should file a 1040X to add the Canadian income and claim a foreign tax credit on form 1116.  You would do it this way if there are children involved to get the $1,000 child tax benefit.  In general if you file the suggested form 2555 (a legal alternative), you lose the child tax benefits.

In addition, to avoid Major penalties over his RRSP and other foreign financial accounts he may have,he has to file US forms TDF 90-22.1 and 8891 as asked for on questions 7 and 8 on schedule B of your 1040.

He must report the internal earnings of his RRSP.  He can exempt them (except for state tax in California) by filing form 8891. 

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.
QUESTION:

Hello
I am a 26 year old Canadian who has been residing in FL since June 2006. I married an American the following month.
I have been unemployed since and am going to fill my Canadian taxes.

Is it possible for someone in FL to file out my taxes for me...or do i have to travel back to Canada to do so. 

Thanks so much
I find your website very fascinating :)


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david ingram replies:

You need to file a departing Canada return with forms 1161, 1243 and maybe 1244 if y9u are leaving assets behind in Canada.    If you have bank accounts or other interest or dividends from an investment account, the payers in Canada are supposed to be deducting 10% tax on interest and 15% tax on dividends from the day you left Canada and should issue an NR 4 for that income and tax deduction.

We can do  your returns for you by mail or email, fax or courier.

You should likely be filing a joint US 1040 with your spouse.

Remember, You do have to do a departing Canada return for 2006.

This other question might help.

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QUESTION: Hi David,

I am Canadian citizen, worked in Canada for the first 5 months of 2006. then moved to US and worked then for the rest of 2006. I have income from Canada employer, Canadian bank and US employer. I filed tax return on my US income to IRS already. I haven't done Canadian tax return yet. I had thought I only need to file canadian tax return on my canadian income. But it seems both CRA and IRS requested to report my world income to both. I am confused. What should I do to file the tax return to both? 

More specially, I received NR4 slip from CIBC bank. I could not find where to enter this form when I used Ufile.ca. 
How can I enter US W2 form into any Canadian tax form?
How can I enter T4 slip into US tax return form? 

thanks a lot!
_______________________________________________________________
david ingram replies:

An NR4 does not go on the Canadian return.  It goes on Schedules B and 1116 of the US return

The T4 does not go on the US return unless you are filing as a year round resident as in 2 below.

I am too busy to come up with a new answer but this older one will give you an idea.


QUESTION: Hi David,

I really need your help in filling U.S tax and I am getting mixed messages which forms to file. 
I am a Canadian Citizen in U.S on TN visa for more than a year. 
I have RRSP in canada over 10,000 put in fixed bond and saving account in a bank. 
What do I need to file here and what forms do I need to fill. 
Do I still have to file tax in Canada for canadian earning? Please help.
____________________________________________________
david ingram replies;

You need to file a departing Canada tax return and file T1161 if you left more things than your RRSP behind.  The Canadian return will only include Canadian earnings although if you had a Home Buyers Plan, it is all due and taxable on the departing Canada return unless you have paid it back.

For the US, you have two choices:

1.   File a 1040NR dual status statement and a Dual Status 1040 Income Tax return with no standard deduction

or

2.   File a full 1040 which includes your Canadian income and gives you a full standard deduction and the right to file a joint return if married.  This is usually the best if you left Canada early in the year as you did.

If you can't figure it out, file an extension  form 4868 (find it at http://www.irs.gov/pub/irs-pdf/f4868.pdf )

And then send the information to us at the address in blue below to complete for you.
If the return is not filed yet, you might want to


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On April 6. 2008, David Ingram wrote:

It is very unlikely that blind or unexpected email to me will be answered.  I receive anywhere from 100 to 700  unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients.  Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first.  I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. 
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However, I regularly search for the words"PAYING CUSTOMER" and always answer them first if they did not get spammed out. For the last two weeks, I have just found out that my own email notes to myself have been spammed out and as an example, as I wrote this on Dec 25, 2007 since June 16th, my 'spammed out' box has 47,941 unread messages, my deleted box has 16645 I have actually looked at and deleted and I have actually answered 1234 email questions for clients and strangers without sending a bill.  I have also put aside 847 messages that I am maybe going to try and answer because they look interesting. -e bankruptcy expert  US Canada Canadian American  Mexican Income Tax service and  help
Therefore, if an email is not answered in 24 to 48 hours, it is likely lost in space.  You can try and resend it but if important AND YOU TRULY WANT OR NEED AN ANSWER from 'me', you will have to phone to make an appointment.  Gillian Bryan generally accepts appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321.  david ingram expert  US Canada Canadian American  Mexican Income Tax  service and help.
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Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST if in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.
$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 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.
 
$1,600 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

$1,700 would be for two people with income from two countries

$3,000 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 $200.00 up.
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
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 $900 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.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.
 
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