The IRS/CRA Income Tax Thread

[Udella&Wiz 325]

Hey all - after reading through a zillion of these answers, I'm not sure I saw my exact situation.

In 2008 - I received only EI as Canadian foreign income and then I got a job in March and worked in the US for the remainder of the year.

Which forms am I completing to declare the Canadian EI income on my US tax return? 2555 AND 1116? or just 1116

WHen did you enter the US, if it was before Jan 2008, then your taxes in your EI income would be credited on 1116. ALso consider filing a Section 217 non-resident return to see if you can recover some of the 25% back.

Entered in Nov 2007 - EI only started in the 2008 year though by the time the claim got going. I'll use the 1116 form as you mention.

I was a full US resident for all of 2008 so cannot go the non-resident return route, but thank you for suggesting. I won't lie about that income, I am getting really frustrated though that it looks like I'll be hit twice, at least a little for that income Canada dinged me already and now the US is going to

[zyggy 9]

Hey all - after reading through a zillion of these answers, I'm not sure I saw my exact situation.

In 2008 - I received only EI as Canadian foreign income and then I got a job in March and worked in the US for the remainder of the year.

Which forms am I completing to declare the Canadian EI income on my US tax return? 2555 AND 1116? or just 1116

WHen did you enter the US, if it was before Jan 2008, then your taxes in your EI income would be credited on 1116. ALso consider filing a Section 217 non-resident return to see if you can recover some of the 25% back.

Entered in Nov 2007 - EI only started in the 2008 year though by the time the claim got going. I'll use the 1116 form as you mention.

I was a full US resident for all of 2008 so cannot go the non-resident return route, but thank you for suggesting. I won't lie about that income, I am getting really frustrated though that it looks like I'll be hit twice, at least a little for that income Canada dinged me already and now the US is going to

That's why I sugested filing a Section 217, you may get a portion of what you paid Canada back.

[jhunjhun 7]

How long does it takes for CRA to complete the assessment for our tax returns? Does it takes a year? I'm just curious. I was told by them that the process will takes about 4-6 weeks. How come others been waiting for more than a year?

[sandyn 0]

need help with filing

My DD married a South African Sept 2008. He started his VISA process in Nov. They had their interview the beginning of March and the agent wanted them to give a copy of their 2008 taxes

I am confused as to if he was a resident or nonresident alien for 2008

He worked in London from Jan- Mar 2008. He went back to SA and then came to the US on a cultural exchange visa in April. He worked on the exchange visa from April- July. They got married in Sept

Do they file jointly? That is what visa wants them to do. Does he claim his London income?

He also has some sort of account in London that may have been worth around 10K- he has to file paperwork for that too, correct?

DId he file as married? He has the choice of either filing as joint or separate. He would be considered a non-resident alien. If he was paid in the US from April to July he may have a requirement to file a 1040-NR. If that is the case, it may be beneficial to opt to treat the alien spouse as a resident alien for tax purposes and exclude the foreign earned income.

Thank you- why would he exclude the foreign earned income?

I find these things confusing:

Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. However, nonresident aliens married to U.S. citizens or residents can choose to be treated as U.S. residents and file joint returns. For more information on these choices, refer to Nonresident Spouse Treated as a Resident.

OR

If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U.S. resident. This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other spouse is a nonresident alien at the end of the year.

If you make this choice, you and your spouse are treated as residents for your entire tax year for the purpose of your federal individual income tax return, and for the purpose of withholding U.S. federal income tax from your wages. However, for the purpose of Chapter 3 withholding you may still be treated as a nonresident alien. Refer to Withholding of Tax on Nonresident Aliens and Foreign Corporations (Chapter 3 of the IRC) in Tax Withholding Types. In addition, you may still be treated as a nonresident alien for the purpose of withholding Social Security and Medicare tax. Refer to Aliens Employed in the U.S. – Social Security Taxes.

Do they have to do this when they file?

How to Make the Choice

Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following information:

1. A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as U.S. residents for the entire tax year

2. The name, address, and identification number of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)

Does he have to file form 2555?

as a side note- neither of them made more than the 8950$ standard deduction, so they are basically just filing to get their $ back.

This is how we have done it so far but it can be changed. Filed 1040 EZ married jointly. Included his London income(converted) on the income line.

[LindaB 0]

How long does it takes for CRA to complete the assessment for our tax returns? Does it takes a year? I'm just curious. I was told by them that the process will takes about 4-6 weeks. How come others been waiting for more than a year?

Hi jhunjhun

I was told 4 - 6 weeks by CRA too, it has been 3 weeks now so hopefully soon. I did ask the last time I called why if they are saying 4 - 6 weeks that I have heard that others have been taking months and months. He said it may depend on how complicated the return is.

I just had my 2007 tax return re-assessed at the Surrey Tax Centre and was told it would take approx. 8 weeks, and it was processed in two weeks and in my bank account one week later. Very lucky there!!!!

[Frenchy 0]

Ok, so we've decided to just have our US taxes professionally done. It was just too involved and I couldn't figure out how to fill some of those forms out.

We're thinking the same for the Canadian taxes. I just tried to do it on Ufile to see if it matched what I got and it's coming up thousands of dollars more for a return. It seems to have accounted for the partial year and seems to have prorated the credits so I don't know what's going on.

My question-Does anyone know of where I can get my Cnd taxes done since I'm in the states? I would imagine trying to find one locally would be hard. Is there anyplace that will do them if I send in all the information? I just don't know what to do and am running out of time to figure it out.

Thanks!

I don't know if you've found answers to your question (accountant to do Canadian taxes) but here are a few e-mail addresses to accountant who CAN help you out: uscanadatax@gicable.com and mtscpa@serbinski.com But, they are a tad bit pricey. My best recommendation is do not go to H&R Block for your Canadian taxes! Good luck, I'm in the same boat as you, spending endless hours trying to understand this huge puzzle. Also, here is the Canada Revenue number for international tax issues 1-800-267-5177

[Frenchy 0]

In 2007 I filed as a deemed non-resident (after filing the NR73), I don't think I paid non-resident taxes.

1. How can I make my "final" tax declaration in Canada? I've searched for "departure tax" return on the CRA site but found nothing.

2. I was told to file the T1161 but my total property value was below $25,000 so I don't think I should have to file this, or do I?

3. Also, should I immediately close all Canadian bank accounts such as mutual funds and checking (other than my RRSP)?

4. Can I do a direct transfer from my Canadian account to my US account?

Thanks! I am really confused...

[sedation 1]

By popular demand, I am beginning a thread to share everyone's eventual cross border tax issues so it can be kept in one central place and can be continually used as a resource in this and coming years. So feel free to post and share the love and information.

Zyg

Hi zyggy,

Being a US citizen from April 1,09 i am applying for my husband who is living in US with me from 2007 as dental student.I filled most of the forms(I-130, G325A filled by both of us but seperately and I-485) ,but confused between I-864 or I-864EZ as i dont have any income because i didnt work in 2007 and 2008,its only his school loan on which all our expenses depends.(4family members,me ,my husband and 15 mons.twins).So which form i should fill.

Next i didnt work in 20007 and 2008,so didnt fill tax return paper.But there is column in both forms I-864 and I-864EZ for tax return of last two years.What should i do in such condition.Should i contact IRS in this matter.Please help me and give me some detail information regarding this matter that what type of forms i should fill now and what forms my husband should fill.

[sedation 1]

By popular demand, I am beginning a thread to share everyone's eventual cross border tax issues so it can be kept in one central place and can be continually used as a resource in this and coming years. So feel free to post and share the love and information.

Zyg

Hi zyggy,

I am US citizen and got my citizenship couples days ago.I want to apply for my husband for Permanent Resident.

My husband is Canadian resident and he is in US with me from June 2007 on F-1 visa as he is studying here.He has US SSN also.In June 2009 is our second marriage anniversary and we are trying to get CONDITIONAL GREEN CARD before that.I have filled forms I-130, I -485, G-325 A (from both of us but separately ,do we both need to fill this form).

But i am confused that for AFFIDAVIT OF SUPPORT which form i should fill ( I-864 or I-864 EZ)as i am homemaker from last two years and taking care of twins and all expenses are on his school loan.Except these two forms do i have to fill I-864 A also or my husband should fill because he is the one who annual household income supports all of us.

I didn't fill tax return for 2007 and 2008 also,i thought didn't work so i dont need to fill.What should i do now for tax return of 2007 now as there is column for federal tax return income in I-864A for last two years.We are family of 4members(me, my husband and twins).Please help me and send me informationas much as you can.

[zyggy 9]

Hey all - after reading through a zillion of these answers, I'm not sure I saw my exact situation.

In 2008 - I received only EI as Canadian foreign income and then I got a job in March and worked in the US for the remainder of the year.

Which forms am I completing to declare the Canadian EI income on my US tax return? 2555 AND 1116? or just 1116

WHen did you enter the US, if it was before Jan 2008, then your taxes in your EI income would be credited on 1116. ALso consider filing a Section 217 non-resident return to see if you can recover some of the 25% back.

Entered in Nov 2007 - EI only started in the 2008 year though by the time the claim got going. I'll use the 1116 form as you mention.

I was a full US resident for all of 2008 so cannot go the non-resident return route, but thank you for suggesting. I won't lie about that income, I am getting really frustrated though that it looks like I'll be hit twice, at least a little for that income Canada dinged me already and now the US is going to

The Section 217 with a Non-Resident return is from Canada. Look up some of my prior posts about Section 217 returns.

[zyggy 9]

need help with filing

My DD married a South African Sept 2008. He started his VISA process in Nov. They had their interview the beginning of March and the agent wanted them to give a copy of their 2008 taxes

I am confused as to if he was a resident or nonresident alien for 2008

He worked in London from Jan- Mar 2008. He went back to SA and then came to the US on a cultural exchange visa in April. He worked on the exchange visa from April- July. They got married in Sept

Do they file jointly? That is what visa wants them to do. Does he claim his London income?

He also has some sort of account in London that may have been worth around 10K- he has to file paperwork for that too, correct?

DId he file as married? He has the choice of either filing as joint or separate. He would be considered a non-resident alien. If he was paid in the US from April to July he may have a requirement to file a 1040-NR. If that is the case, it may be beneficial to opt to treat the alien spouse as a resident alien for tax purposes and exclude the foreign earned income.

Thank you- why would he exclude the foreign earned income?

I find these things confusing:

Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. However, nonresident aliens married to U.S. citizens or residents can choose to be treated as U.S. residents and file joint returns. For more information on these choices, refer to Nonresident Spouse Treated as a Resident.

OR

If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U.S. resident. This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other spouse is a nonresident alien at the end of the year.

If you make this choice, you and your spouse are treated as residents for your entire tax year for the purpose of your federal individual income tax return, and for the purpose of withholding U.S. federal income tax from your wages. However, for the purpose of Chapter 3 withholding you may still be treated as a nonresident alien. Refer to Withholding of Tax on Nonresident Aliens and Foreign Corporations (Chapter 3 of the IRC) in Tax Withholding Types. In addition, you may still be treated as a nonresident alien for the purpose of withholding Social Security and Medicare tax. Refer to Aliens Employed in the U.S. – Social Security Taxes.

Do they have to do this when they file?

How to Make the Choice

Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following information:

1. A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as U.S. residents for the entire tax year

2. The name, address, and identification number of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)

Does he have to file form 2555?

as a side note- neither of them made more than the 8950$ standard deduction, so they are basically just filing to get their $ back.

This is how we have done it so far but it can be changed. Filed 1040 EZ married jointly. Included his London income(converted) on the income line.

You're on the right track. If you choose the option to treat your non-resident spouse as a resident spouse for US tax purposes, you must declare all of his worldwide income. But you can exclude it for tax purposes using Form 2555.

[orange_n_pink 0]

I came to the States in May 2008 on a K-1 visa. A couple days ago i received my green card. I think I may have filed our taxes wrong and I need some help.. please

I had income in Canada in 2008 prior to me moving to the US. I filed my husbands US Fed. taxes jointly but I did not include my income from Canada.. is that something I shouldve done? he already received his return back...

Also, I have yet to do my Canadian taxes and I was wondering what I should do about my spouse's income.. all of his income in 2008 was in the US. Do i include his income in my Canadian fed. taxes? please help.. i'm totally lost..

[sandyn 0]

Does he have to file form 2555?

as a side note- neither of them made more than the 8950$ standard deduction, so they are basically just filing to get their $ back.

This is how we have done it so far but it can be changed. Filed 1040 EZ married jointly. Included his London income(converted) on the income line.

You're on the right track. If you choose the option to treat your non-resident spouse as a resident spouse for US tax purposes, you must declare all of his worldwide income. But you can exclude it for tax purposes using Form 2555.

so, in addition to the 1040 ez, they should file the 2555? The 1040ez had his income included on it

[zyggy 9]

Does he have to file form 2555?

as a side note- neither of them made more than the 8950$ standard deduction, so they are basically just filing to get their $ back.

This is how we have done it so far but it can be changed. Filed 1040 EZ married jointly. Included his London income(converted) on the income line.

You're on the right track. If you choose the option to treat your non-resident spouse as a resident spouse for US tax purposes, you must declare all of his worldwide income. But you can exclude it for tax purposes using Form 2555.

so, in addition to the 1040 ez, they should file the 2555? The 1040ez had his income included on it

You can't do an EZ with the 2555 or if you opt to declare your spouse as a resident alien, you must file a regular 1040.

I came to the States in May 2008 on a K-1 visa. A couple days ago i received my green card. I think I may have filed our taxes wrong and I need some help.. please

I had income in Canada in 2008 prior to me moving to the US. I filed my husbands US Fed. taxes jointly but I did not include my income from Canada.. is that something I shouldve done? he already received his return back...

Also, I have yet to do my Canadian taxes and I was wondering what I should do about my spouse's income.. all of his income in 2008 was in the US. Do i include his income in my Canadian fed. taxes? please help.. i'm totally lost..

Reading the full thread will give you the answers to both of your questions.

[zyggy 9]

In 2007 I filed as a deemed non-resident (after filing the NR73), I don't think I paid non-resident taxes.

1. How can I make my "final" tax declaration in Canada? I've searched for "departure tax" return on the CRA site but found nothing.

2. I was told to file the T1161 but my total property value was below $25,000 so I don't think I should have to file this, or do I?

3. Also, should I immediately close all Canadian bank accounts such as mutual funds and checking (other than my RRSP)?

4. Can I do a direct transfer from my Canadian account to my US account?

Thanks! I am really confused...

Since you're a deemed resident of Canada, I don't believe you left Canada yet until the date you sold your property. I suggest you call the International Tax Services office to confirm this. They are very helpful with these sort of issues. Based on the assumption, I submit the following:

1) You're going to need to file a new NR-73 showing that you no longer hold property in Canada to be reclassified as a non-resident of Canada. I would also file a leaving Canada return with the date you sold your house as the date that you "left" Canada. The capital gain on your house would be included in the Leaving Canada return.

2) This form is filed for any of the property listed that you own as of the date that you "left" Canada. If you have any securities etc as listed on the form, you must pay capital gains based on the values of those securities on the date you left Canada.

3) That's up to you. Others have kept those accounts open with no adverse effects. However, since you're a deemed resident and need to apply to get that designation removed, this may be harder for you. Just make sure you notify those institutions of your non-residency.

Your example is one of the reasons why I recommend people to NOT send a NR-73 to CRA unless they ask you to.

4) You sure can. There should be no issues. IF the amoutn is larger than $10,000, your bank will report it to the Treasury Department for money laundering monitoring. YOur money is your money and it will not be taxed if you transfer it.