Canada tax info

[zyggy 9]

so what are the repurcussions of not informing them that you've left? i mean, i became a permanent resident of the US Dec 2 20005. it is so tempting to just do my taxes as if i was an alberta resident for all of 2005.

(no, i'm not suggesting i'm going to do anything illegal). just seems like they would still get their fair share of taxes.

Your taxes for 2005 will be prorated til lthe day you ceased to be a Cdn resident, in ur case dec 2 2005, so you will get most of the yr covered.

i LEFT canada june 7 but became a perm resident of US dec 2. would it make more sense to put dec 2 as the date i emigrated? since technically, i was a canadian resident in the US on a visa until that point.

what do you all suggest?

I specifically asked them this question, a year before I moved.

For tax purposes, the day you left the country to come live in the US is the day you left Canada. For tax purposes, Canada doesn't care about the exercises and semantics the US Gov't puts you through.

They go by when you were not living on Canadian soil, not your residency 'status' per the government.

Hope that helps!

Correct... the date that you place on the return that you left Canada is the date that you physically left Canada to take up residence in the US. Meaning the date that you entered the US on a K or CR1 visa. NOT the date that you were granted permanent resdient status. That date is June 7 for the poster. In addition, you file the return for the province that you lived in at the time that you left Canada. For the poster, that would be for Alberta. YOu then send that return to the International Tax Services Office, NOT to the Tax Office that had jurisdiction over your former place of residence.

[Flames9_RN 358]

Anyone get their T4 for EI yet?

Nope jusy got my T4 from DND. Just going to use the t4e from the internet

[KJ79 0]

quote---------

Correct... the date that you place on the return that you left Canada is the date that you physically left Canada to take up residence in the US. Meaning the date that you entered the US on a K or CR1 visa. NOT the date that you were granted permanent resdient status. That date is June 7 for the poster. In addition, you file the return for the province that you lived in at the time that you left Canada. For the poster, that would be for Alberta. YOu then send that return to the International Tax Services Office, NOT to the Tax Office that had jurisdiction over your former place of residence.

how exactly do i file the federal T1 return (for non-resident or deemed resident) AND the provincial return? for example, i am using ufile.ca, and for the province i resided in on dec 31st 2005, i have to indicate "deemed resident" (since i was in the states)... then it creates the federal T-1 non/deemed resident return. or should i put "alberta"?

i realize you arent an accountant but i really appreciate your input! my taxes are SO simple - i was a renter with one T-4 and thats IT baby!!-- i REALLY dont want to have to send these off to an accountant and get charged a fee to finish them. taxes are not my forte. after doing all the immigration stuff myself, my brain has reached capacity.

thanks again....

[zyggy 9]

quote---------

Correct... the date that you place on the return that you left Canada is the date that you physically left Canada to take up residence in the US. Meaning the date that you entered the US on a K or CR1 visa. NOT the date that you were granted permanent resdient status. That date is June 7 for the poster. In addition, you file the return for the province that you lived in at the time that you left Canada. For the poster, that would be for Alberta. YOu then send that return to the International Tax Services Office, NOT to the Tax Office that had jurisdiction over your former place of residence.

how exactly do i file the federal T1 return (for non-resident or deemed resident) AND the provincial return? for example, i am using ufile.ca, and for the province i resided in on dec 31st 2005, i have to indicate "deemed resident" (since i was in the states)... then it creates the federal T-1 non/deemed resident return. or should i put "alberta"?

i realize you arent an accountant but i really appreciate your input! my taxes are SO simple - i was a renter with one T-4 and thats IT baby!!-- i REALLY dont want to have to send these off to an accountant and get charged a fee to finish them. taxes are not my forte. after doing all the immigration stuff myself, my brain has reached capacity.

thanks again....

The internet tax programs (such as quick tax and ufile.ca) don't handle the needs of your specific circumstance very well. You're probably going to have to do your taxes by hand. You would use the Alberta tax package and you'll have to reduce your allowances by the fraction of time that you spent outside of Canada.

I'm going to take a look at ufile.ca. I've never used that service before.

If you have more questions, keep on asking them... We'll try to answer them.

Edited February 23, 2006 by zyggy

[caviar22 1]

I got a different answer in regards to paying back my RRSP homebuyers loan when selling my home. I was told I did NOT have to pay it all back right away and can you the 15 years or so allotted... provided I make my minimum payment every year. ... hmmm, me thinks I should check again!

[ceriserose 1]

I got a different answer in regards to paying back my RRSP homebuyers loan when selling my home. I was told I did NOT have to pay it all back right away and can you the 15 years or so allotted... provided I make my minimum payment every year. ... hmmm, me thinks I should check again!

Here's the info from CRA.

Source - CRA Website

If you become a non-resident

You may cease to be a resident of Canada after a qualifying home is bought or built. If this is the case, you have to repay the balance of the funds you withdrew under the HBP before the date you file your return for the year, or no later than 60 days after you cease to be a Canadian resident, whichever date is earlier. If you do not make the repayment by this deadline, you have to include the amount that you have not repaid in your income for the year that you became a non-resident. The amount is included in income for the period you were resident in Canada.

Example 11

In 2000, Jeannie withdrew $10,000 from her RRSPs under the HBP to buy a qualifying home. On November 10, 2004, she leaves Canada to live in France. At that time, her unpaid HBP balance is $4,000.

Jeannie has 60 days after becoming a non-resident, that is, until January 9, 2005, to repay the balance. She contributes $2,500 to her RRSPs on December 2, 2004, and $1,000 to her RRSPs on January 7, 2005, for a total contribution of $3,500. Jeannie completes and files Schedule 7 with her 2004 return to designate this contribution as a repayment under the HBP. Because she has not repaid the full amount, Jeannie has to include $500 in her 2004 income, calculated as $4,000 – ($2,500 + $1,000).

This is the link where you can download the .pdf guide for HBP. It seems to work the same as the Lifelong Learning Plan:

PDF Link for HBP Guide

In my case, I didn't know I had to pay the LLP back within 60 days of leaving Canada so it's now income for 2005. I'm hoping there isn't any sort of penalty/interest. But it -is- the government.

Hope that helps!

***************

Caviar22 I just noticed in your timeline that you've just entered the US...Feb 10 of this year. If you can pay it back in the next 60 days go for it. Otherwise, it's not an issue for you until you do 2006 taxes for Canada. It might be to your advantage to call the international tax office and ask them what doing it/not doing it means for next year.

Tax # is 1-800-267-5177.

Edited February 23, 2006 by ceriserose

[zyggy 9]

I got a different answer in regards to paying back my RRSP homebuyers loan when selling my home. I was told I did NOT have to pay it all back right away and can you the 15 years or so allotted... provided I make my minimum payment every year. ... hmmm, me thinks I should check again!

Here's the info from CRA.

Source - CRA Website

If you become a non-resident

You may cease to be a resident of Canada after a qualifying home is bought or built. If this is the case, you have to repay the balance of the funds you withdrew under the HBP before the date you file your return for the year, or no later than 60 days after you cease to be a Canadian resident, whichever date is earlier. If you do not make the repayment by this deadline, you have to include the amount that you have not repaid in your income for the year that you became a non-resident. The amount is included in income for the period you were resident in Canada.

Example 11

In 2000, Jeannie withdrew $10,000 from her RRSPs under the HBP to buy a qualifying home. On November 10, 2004, she leaves Canada to live in France. At that time, her unpaid HBP balance is $4,000.

Jeannie has 60 days after becoming a non-resident, that is, until January 9, 2005, to repay the balance. She contributes $2,500 to her RRSPs on December 2, 2004, and $1,000 to her RRSPs on January 7, 2005, for a total contribution of $3,500. Jeannie completes and files Schedule 7 with her 2004 return to designate this contribution as a repayment under the HBP. Because she has not repaid the full amount, Jeannie has to include $500 in her 2004 income, calculated as $4,000 – ($2,500 + $1,000).

This is the link where you can download the .pdf guide for HBP. It seems to work the same as the Lifelong Learning Plan:

PDF Link for HBP Guide

In my case, I didn't know I had to pay the LLP back within 60 days of leaving Canada so it's now income for 2005. I'm hoping there isn't any sort of penalty/interest. But it -is- the government.

Hope that helps!

***************

Caviar22 I just noticed in your timeline that you've just entered the US...Feb 10 of this year. If you can pay it back in the next 60 days go for it. Otherwise, it's not an issue for you until you do 2006 taxes for Canada. It might be to your advantage to call the international tax office and ask them what doing it/not doing it means for next year.

Tax # is 1-800-267-5177.

Cerise...

There is no penalty or interest if you become a non-resident. You only have to declare it as income in the year that you left. My wife had to do the same thing....

[ceriserose 1]

I got a different answer in regards to paying back my RRSP homebuyers loan when selling my home. I was told I did NOT have to pay it all back right away and can you the 15 years or so allotted... provided I make my minimum payment every year. ... hmmm, me thinks I should check again!

Here's the info from CRA.

Source - CRA Website

If you become a non-resident

You may cease to be a resident of Canada after a qualifying home is bought or built. If this is the case, you have to repay the balance of the funds you withdrew under the HBP before the date you file your return for the year, or no later than 60 days after you cease to be a Canadian resident, whichever date is earlier. If you do not make the repayment by this deadline, you have to include the amount that you have not repaid in your income for the year that you became a non-resident. The amount is included in income for the period you were resident in Canada.

Example 11

In 2000, Jeannie withdrew $10,000 from her RRSPs under the HBP to buy a qualifying home. On November 10, 2004, she leaves Canada to live in France. At that time, her unpaid HBP balance is $4,000.

Jeannie has 60 days after becoming a non-resident, that is, until January 9, 2005, to repay the balance. She contributes $2,500 to her RRSPs on December 2, 2004, and $1,000 to her RRSPs on January 7, 2005, for a total contribution of $3,500. Jeannie completes and files Schedule 7 with her 2004 return to designate this contribution as a repayment under the HBP. Because she has not repaid the full amount, Jeannie has to include $500 in her 2004 income, calculated as $4,000 – ($2,500 + $1,000).

This is the link where you can download the .pdf guide for HBP. It seems to work the same as the Lifelong Learning Plan:

PDF Link for HBP Guide

In my case, I didn't know I had to pay the LLP back within 60 days of leaving Canada so it's now income for 2005. I'm hoping there isn't any sort of penalty/interest. But it -is- the government.

Hope that helps!

***************

Caviar22 I just noticed in your timeline that you've just entered the US...Feb 10 of this year. If you can pay it back in the next 60 days go for it. Otherwise, it's not an issue for you until you do 2006 taxes for Canada. It might be to your advantage to call the international tax office and ask them what doing it/not doing it means for next year.

Tax # is 1-800-267-5177.

Cerise...

There is no penalty or interest if you become a non-resident. You only have to declare it as income in the year that you left. My wife had to do the same thing....

Oooh, good to know! Now I just have to figure out if it's better to file partial year 217 or not. Which is math so I'm avoiding it. Still waiting for my slips from school too...that'll be the deciding factor.

Thanks!

[caviar22 1]

Oh my gosh! Thank you so much ceriserose... I must have gotten someone who was still asleep! That changes things ALOT for me. I borrowed $20,000 from my RRSP and have just started paying it back last year so I still owe $18,000... and I KNOW my place did not appreciate that much... it is still up for sale and hoping with spring around the corner I can sell it quickly! Any takers?

[ceriserose 1]

Oh my gosh! Thank you so much ceriserose... I must have gotten someone who was still asleep! That changes things ALOT for me. I borrowed $20,000 from my RRSP and have just started paying it back last year so I still owe $18,000... and I KNOW my place did not appreciate that much... it is still up for sale and hoping with spring around the corner I can sell it quickly! Any takers?

Well, the good news is that you won't be putting it down as income until next year's taxes. And since you're here in the US and presumably won't be able to work for a few months until your EAD/AOS is processed, it might work in your favor.

And no, I don't need real estate in Canada. Sold mine for a nice profit last year (the one good thing about living in Vancouver pre-Olympics).

[Flames9_RN 358]

As a non resident, I dont belive you can efile your taxes, BUT one can use http://www.quicktaxweb.ca/content/index/index.php?b=intuit Put in your #'s and then at the end it gives you the results, and can pretty much just copy it into the paper format!!

[Hopeful 0]

Hi all,

A couple of things...first to let everyone waiting for their T4 E know, I received mine on Thursday, so if you haven't received it already, you should be soon.

I also wanted to know if anyone has used/considered using one of these "cross-border" tax specialists? I have given up trying to figure this stuff out on my own. I did get that book "The Border Guide" by Robert Keats, and although it had a ton of information, it ended up confusing the hell out of me!

I contacted Serbinski (thanks flames!), and he sounds extremely competent, but we just couldn't afford him (almost a thousand dollars for one Canadian return and one U.S. married/jointly return).

So, I'm trying to find someone else....does anyone have any suggestions?!

Thanks!

[Flames9_RN 358]

You could try a H&R blockor a hewitt jackson type of service. Some offices are better than others. In my case H&R block sucked, wouldnt listen to me, and Hewitt Jackson was ok. The fellow was uncertain on somethings but at least listened to me and agreed with me!! What I did was I went on that tax forum that I posted, got a basic understanding of what forms I would require and what I qualified for. My case was pretty simple, sold my home long ago and had already paid back what I had taken out of the RRSP's so I just had my regular RRSP's to report (form 8891) and a way to exclude my Cdn income (form 2555 ez) So in reality it was not that difficult. And filing a depature income tax form for Canada was pretty simple as well since everything was basic. So after all my blabbing, read up on that tax forum, ask a few questions, and then try out some of those tax services. If you do not like what they are telling you, say thanks for your time and walk away. thats what I had to do at h&R block when I was talking to their Cdn so called"expert" lol

[Hopeful 0]

Thanks for the advice. Mine is pretty simple too, but, in addition to the RRSP's back home, I still have a small company pension that I don't know what to do with. I would really like to get an expert to help, at least with this year. I found three other firms that say they specialize in Canada/U.S. returns and I have emailed them all to find out their fees.

I may also check out the Hewitt Jackson service, so thanks for the tip!

[allycat 0]

I sent in my Canadian tax return today!!

I did it myself and I did plenty of research and was careful, so I think it will be fine.

One bonus I didn't know about til I filled in the forms: the Ontario Health Premium is only payable if you lived in Ontario on the last day of the tax year, so that saved me several hundred $$ I wasn't expecting!! My income was also larger than it would have normally been because I never paid back the Homebuyers Plan, I just claimed the balance as income. As it turned out, this actually appears to have saved me another couple of hundred, since it would have cost me 25% non-resident withholding taxes if I'd put it back in an RRSP and then withdrawn it later. This could go either way, depending on your Canadian income (i.e. if you were in a higher bracket than I am).

Also one thing to check is whether you overpaid your CPP premiums, if you moved early in the year. Mine was overpaid by $110 or so. There is a form on the Canadian tax website (google "cra"). It's form T2204.

I didn't earn any income in the US so I was able to claim 100% of the tax credits, as though I'd lived in Canada all year.

US taxes are a mystery to me, and we are having those done by an accountant.

Maybe some of this info will help someone else.