Tax time question

[dearheart 0]

My husband and I lived in Canada until Nov 1, 2007. From what I have read, we need to file as residents since we lived in Canada for 183 days or more. (304 to be exact). We didn't have any income in the US so we don't need to worry about US taxes this year. I am just wanting to be sure about filing as a resident of Canada since if we could file as non-residents we would get more of a refund. Can anyone confirm this for me. Thanks a bunch!

[EmilyandJason 0]

Yes, you and your husband would file as Canadian residents. You need to enter the date you left Canada and the program will prorate the tax credits for you.

If you have any taxable Canadian property you will have deemed dispositions to report.

[zyggy 9]

Yes, you and your husband would file as Canadian residents. You need to enter the date you left Canada and the program will prorate the tax credits for you.

If you have any taxable Canadian property you will have deemed dispositions to report.

The US Citizen must file a US tax return. However, you can exclude the income you made in Canada and will probably owe nothing.

[EmilyandJason 0]

Perhaps I misunderstood the situation. My answer applies to Canadian residents that are emigrating during the taxation year.

US Citizens always have to file US returns for world wide income. You would also file the Canadian return.

Edited February 20, 2008 by EmilyandJason

[dearheart 0]

Emily&Jason, you understood the question. To confuse things even more I am using Quicktax. It asks us where we were residents on December 31, 2007. That answer is Non-resident since we severed all ties and cancelled provincial health insurance for Oct 29,2007. So if I answer in this way, QuickTax calculates that I am a non-resident, deemed resident since we lived more than 183 days. but when I answer this way, Quicktax doesn't calculate any taxes owing to Saskatchewan. On this form there is no way to indicate the exact date when we left Canada. When I do the "Review" QuickTax finds no errors.

Now, if I answer the question of where we lived on Dec 31,2007 as Saskatchewan it does ask if and when there is a residency change and I am able to enter the exact date. It then seems to calculate according to when we left. Unfortunately, by adding in the date we left Canada, it reduces our refund by $950.

Now, according to California standards, I (the USC) became a resident once I voted in an election which was February 5,2008. My Canadian husband just received his Social Security number in February also. So from the months of November - January where were we considered residents? Neither of us have jobs. We are living with my parents in California until my husband can find a job.

I did find a form on the ccra website that I can fill in and fax in for an opinion on my residency status. Maybe I will do that.

As for the US citizen filing US tax return, I do not make enough to file. I called the IRS to confirm this.

[dearheart 0]

I apologize, I did end up finding my answer on the CCRA website:

For the tax year that you leave Canada and are an emigrant for tax purposes:

use the General Income Tax and Benefit Guide and the forms book for the province or territory where you lived on the date you left Canada.

So, Quicktax is wrong. Hopefully they will fix the bug.

[EmilyandJason 0]

I apologize, I did end up finding my answer on the CCRA website:

For the tax year that you leave Canada and are an emigrant for tax purposes:

use the General Income Tax and Benefit Guide and the forms book for the province or territory where you lived on the date you left Canada.

So, Quicktax is wrong. Hopefully they will fix the bug.

Sounds like you are on the right track now. Yes, quicktax is wrong, but sounds like you got it fixed.

It makes sense that the refund would be less, since your tax credits would be pro-rated, not the best news, but at least it is correct.

I don't think it is necessary to ask the CRA for an opinion on your residency. I think it is pretty clear from when you left the country and cancelled your medical coverage.

You would be residents of the US for November and December - at least from a Canadian tax requirement point of view! I see it gets a little tricky with the California laws, so I'd say for US purposes you weren't residents! You'd only need to file there if you meet the requirements.

However, please get a professional opinion if you have any doubts.

~Emily

Edited February 21, 2008 by EmilyandJason

[zyggy 9]

Be very careful with Quicktax...

Another bug it used to have is it doesn't prorate your exemptions either...

Do it by quicktax as a guide.. but do the final leaving Canada return by hand to make sure it's done right.

[zyggy 9]

The IRS and the individual states will require you to file if you made more than their minimum filing requirements. The US Citizen will need to file regardless.

[dearheart 0]

I am the US citizen. I have been a stay at home mom for 7 years. When I called the IRS and asked, they said I did not need to file. In Canada, I filed to receive the CCTB and UCCB.

[TennCAN 1]

I am the US citizen. I have been a stay at home mom for 7 years. When I called the IRS and asked, they said I did not need to file. In Canada, I filed to receive the CCTB and UCCB.

ZYGGY is the expert.......helped up get our taxes filed yesterday......Thanks again ZYGGY....very much appreciated...

Dale & Vianca

[zyggy 9]

I am the US citizen. I have been a stay at home mom for 7 years. When I called the IRS and asked, they said I did not need to file. In Canada, I filed to receive the CCTB and UCCB.

This year, you really should file... those who do not file are not eligible for the tax rebate everyone is getting in May... Also, you may be eligible for the child tax credit and other benefits. You and your spouse should strongly consider filing a tax return.

So even if you and your husband make under the limit required to file, you really should file.

[dearheart 0]

Thank you Zyggy. I appreciate your insight into this.

My husband received his Employment Authorization and SSN this February.He is still waiting for the Green Card. He is Canadian. His only income has been Canadian while we were living in Canada and has not received any income since October 2007. Just so I understand, he should file a return also? Turbotax doesn't seem to know what to do with a non-citizen and non-resident for 2007.

When I (the USC) am answering the Turbotax questions for filing, I am not sure how to include the Universal Child Care Benefit I received. This was the only "income" I received for 2007. This amount in $2000. I put it in the Foreign Income.

I do think it is a good idea for me (the USC) to file just to be on record.

[zyggy 9]

Thank you Zyggy. I appreciate your insight into this.

My husband received his Employment Authorization and SSN this February.He is still waiting for the Green Card. He is Canadian. His only income has been Canadian while we were living in Canada and has not received any income since October 2007. Just so I understand, he should file a return also? Turbotax doesn't seem to know what to do with a non-citizen and non-resident for 2007.

When I (the USC) am answering the Turbotax questions for filing, I am not sure how to include the Universal Child Care Benefit I received. This was the only "income" I received for 2007. This amount in $2000. I put it in the Foreign Income.

I do think it is a good idea for me (the USC) to file just to be on record.

As the US Citizen, you can opt to treat your husband as a Tax resident for the entire tax year. See some of the other posts I have written and others have expended on how to proceed. If you have more specific questions, I can help as needed.

Edited February 22, 2008 by zyggy