The IRS/CRA Income Tax Thread

[kalcium 0]

You need to file departure return, which is T1 + T1161 + T1243. You cannot netfile your return, you have to send the return to CRA International Tax Services Office by mail. On T1, put your new US address, leave the province of residency as Dec 31 blank, and put down your departure date.

The sale of your house has no tax obligation to CRA nor IRS.

Wow, wealth of knowledge here, hoping someone can help me out...pertinent info:

- POE'd on K1 Visa Dec. 27 2010

- married Jan. 21 2011, now in the midst of AOS

Am planning to file a tax return in Canada only (no income in US for 2010), and understand I should do an 'exit return'...is that the same as the general form, and you just note that you've moved/exited?

I sold my home in early December before moving...I don't need to declare that do I? It was my principle residence so not subject to capital gains...

And one last thing, I have some $$$s in a chequing account and some RRSPs in Canada - do I need to file a form with my Canadian return to declare that or is that next year when i file my US?

When you have a minute, thanks

[Brenda2010 1]

Wow, wealth of knowledge here, hoping someone can help me out...pertinent info:

- POE'd on K1 Visa Dec. 27 2010

- married Jan. 21 2011, now in the midst of AOS

Am planning to file a tax return in Canada only (no income in US for 2010), and understand I should do an 'exit return'...is that the same as the general form, and you just note that you've moved/exited?

I sold my home in early December before moving...I don't need to declare that do I? It was my principle residence so not subject to capital gains...

And one last thing, I have some $$$s in a chequing account and some RRSPs in Canada - do I need to file a form with my Canadian return to declare that or is that next year when i file my US?

When you have a minute, thanks

Hiya - turns out a husband of a friend of mine is well versed in Cdn/US taxes so has agreed to do my return for me so no need to hit you nice people up for advice!

[Piefre 15]

I have a potentially dumb question. My POE is Nov 21, 2011, my fiance and I are probably getting married early January. So I won't be AOSing before the end of the 2011 fiscal year. I already know I have to file an exit tax return with Canada Revenue Agency, but do I also have to file taxes for the IRS in the States given my situation?

[goldfish 0]

Hi Zyg, thank you very much for sharing your knowledge on cross border tax issues with us.

I have a tax planning question and I would like to hear your opinion on this, if I could choose the date to become a US resident (that will be the official date I become a non-resident of Canada), either late December ex. 23 Dec 2011, or early Januaray ex. 3 Jan 2012, generally speaking, for my Canadian normal tax return and the exit return, simplicity wise , it is better to choose the later date i.e. 3 Jan 2012, am I right?

I look forward to your reply. Thank you very much in advance.

P.S. Any wisdom is welcome, please feel free to comment. Thank you.

[Rayoflight 10]

I POE December 18, 2011. Do I file a tax return with the IRS for 2011?

[DanielK 0]

I need alittle insight,

I worked and lived in canada in 2011 until aug 4th when i moved to the us on a cr1 visa

I have not worked in the us in 2011 , do I have to file a taxes with IRS or just do my T1 Tax form in canada.

Along with the T1 form is there any other forms I need. My wife is a USC and works. My wife never lived in canada or worked there, so she does not have a SSN card.

Do we Just file as single for last year so everything doesn't get messed up?

We married in 2010 and filed as single for the 2010 taxes, does it matter?.

[zyggy 9]

I need alittle insight,

I worked and lived in canada in 2011 until aug 4th when i moved to the us on a cr1 visa

I have not worked in the us in 2011 , do I have to file a taxes with IRS or just do my T1 Tax form in canada.

Along with the T1 form is there any other forms I need. My wife is a USC and works. My wife never lived in canada or worked there, so she does not have a SSN card.

Do we Just file as single for last year so everything doesn't get messed up?

We married in 2010 and filed as single for the 2010 taxes, does it matter?.

1) If you were married in 2010, you must file as married in 2010. You cannot file as single, unless you meet one of the exemptions, which you would not. You'll have to amend your 2010 return to reflect that, but you'll likely get more money back if you do file as married filing joint. In your case, she would declare you as a resident for tax purposes, and subsequently exclude your Canadian income in 2010.

2) As a permanent resident in 2011, you do have a filing requirement. You would file jointly with your spouse in 2011. I doesn't matter if you make no income, your household with your spouse does. Your spouse could also file as married filing single, but the IRS take a dim view of filing that way and stacks the tax code accordingly. There are very few reasons why filing as married filing single would be more beneficial, more so since you didn't work. Same case applies, you would report your Canadian Source Income, and subsequently exclude it using the forms and procedures expalined on this thread.

If you have any RRSPs and bank accounts having more than $10,000 between all of them, you must report your accounts to the US Treasury. See the rules for reporting these account on the following website

http://www.irs.gov/businesses/small/article/0,,id=148849,00.html

[Paul H 4]

Tax Time!

Ok, Jenni moved to the U.S. Oct 16, 2011 and we married on Oct 18. She did not get her green card until 2012. She does not pass the green card test nor the Substantial Presence Test for tax year 2011. She did not make any income while in the U.S. however she made significant income in Canada close to the foreign earned income exclusion limit, but not exceeding it.

As I understand it since she has married (me) a U.S. citizen we could elect to treat her as a permanent resident and file jointly. Or she could file as a non-resident alien.

Is there an obvious choice here? Pub 519 has a lot of info and it's not at all clear to me yet. Maybe after reading it 10 times I'll have the answer, but some assistance would be appreciated!

[Paul H 4]

I found a lot of answers to my questions in this thread.

http://www.visajourney.com/forums/topic/170514-income-tax-filing-newly-married/

Looks like the best option is to file MFJ and elect to have Jenni treated as a resident for tax purposes. Bigger refund.

Thanks!

[SomberCat 0]

My question - my husband's ex-wife is in Canada and he pays her a substantial amount of alimony. We have always deducted this as allowed on our US taxes, and in the area for the recipient's SSN, I have put in "Canadian" or left it blank. This year in TurboTax, it won't allow me to do this. I tried to sneak past it and thought that I was successful, but when I got to the filing step, it refused to send it. Does anyone have a suggestion for what I should put in that field? I could use her SIN because he does have it, but I wouldn't want the IRS to think it's truly a SSN. Any ideas? I've searched every help board and also have the question pending on the TurboTax Community, but I'm not getting any advice. Surely I'm not the first one to run into this new program feature.

[phel 3]

Hi Zyggy,

You've been so helpful. I would hate for you to have to repeat yourself, so I'll go ahead and tell you what I'm planning on doing and if you could point out any errors I'd be very grateful.

Moved to US on CR-1 visa on March 12, 2011 (wed in June 10.)

Collected EI from April to mid-June 2011 and was taxed 25%

Hubby (US citizen) lost his job in August and has been collecting EI since

I'm going to file my leaving Canada return and put my (small) income earned up until that point and pro-rate any deductions. I will file as married and list my husband but put no SIN and say that he is a US resident. I understand that I need to do a separate return for QC and I'm assuming it will be similarly done.

We're going to file here in the US as married filing jointly, where I'll take a foreign tax credit for my EI collected (converted into US funds) with form 1116. Do I pro rate any deductions based on the time that I've been in the US? My husband has been having tax withheld from his EI payments. Would we put that under our income as well?

Thanks so so so much.

[maxpalmer25 0]

I have been searching for a useful forum to answer some of my questions for awhile now and I think I have found it. I have some different issues that I am in need of assistance with.

I was born in the USA while my Canadian parents were attending university, making me a dual citizen. When I was 3 our family returned to Canada. I am now 41. Just recently I have come across some articles in local media about the US Tax law requiring dual citizens to submit annual taxes. This is something I have never done. Even though I am a dual citizen I have always filed Canadian taxes and thought that was enough. Now I understand that this is not true.

After doing a bunch of research over the past couple of months I am not sure I even want to remain a dual citizen and am seriously considering renouncing my US citizenship. My understanding is that I will have to be in good tax standing with the USA before I will be able to cut those threads permanently. Is this true?

I am hoping I will be able to complete the taxes for the current and past 6 years on my own. I am married to a landed immigrant from Finland and we have a 6 year old daughter. We live in Alberta, Canada. I started an incorporated business about 6 years ago which earns me a seasonal income for a few months of the year. For the past 3 years I have been a full time student. What US tax software is the best to use to meet my requirements? What forms do I need to make sure to complete?

Your help is appreciated.

Thanks.

[jharries 0]

Im so confused, i went to H&R block and they had no idea how to help me. Ive read through so many threads my head is spinning.

Here is my situation, and if anyone has gone through the same and can message me with what I need to do it would be life saving.

I am a US citizen. FIance came to USA on K1 in August. Married in October and has SSN number. No USA income in 2011, only canadian income.

What form do i need to file as married jointly? do I report her income or not? Can i Efile? does she have to do her canadian taxes before we do our USA taxes?

[BBCC 16]

For 2011,

We were married in Sept 2011,

For me, the US Citizen (USC):

I resided/worked in Canada in 2011,

Pass the Physical Presence Test

Do NOT pass the Tax Home Test (my tax home remained in US for other reasons),

receiving US-sourced income

so I cannot use Form 2555 to exclude foreign income.

For her:

Wife is non-resident Alien for 2011,

Electing to be treated as US resident for 2011,

Resided outside US for all of 2011,

Had Canadian income in 2011 as a temporary resident of Canada,

Has now landed in US with her CR-1 in Feb 2012.

Received her SSN at the end of Feb 2012 so will use it to file 1040, Married, Filing Jointly,

1. With regard to her foreign earned & sourced income, there is obviously no W2 for her foreign income. So is any other IRS-documentation required to IRS with regard to establishing the amount of foreign income being declared declaration?

2. Do we just add her foreign earned income declared on T4 (minus 2011 refunds) to Line 7 (Wages, Salaries, Tips...) of 2011 Form 1040 even though there is no W2, 1099 or other IRS report to IRS-document it?

3. Finally, since we didn't itemize our deductions, we just claim the Foreign Tax Credit on Form 1116?

4. In IRS publication 519 and in the instructions for Form 1116, it states a non-resident alien cannot claim the Foreign Tax Credit unless their wages are "effectively connected with a trade or business in the United States." Does this apply to our married situation and cannot claim foreign tax credit based on foreign sourced income?

5. Can she use Form 2555 to exclude her Canadian income on our join return even though I cannot?

Thanks!

Edited March 5, 2012 by BBCC

[Andy and Kayla 45]

Some questions I have been unable to find answers for thus far. I'm the Canadian and hubs is the USC. I'm trying to file my taxes in Canada.

1) We were married in September 2011. Even though I only made income in Canada up until August 2011, it's my understand I'm *supposed* to file as married in Canada anyway. If this is the case, how do I fill out the information about my spouse on the T1 form, since he doesn't have a SIN and the income he made was not made in Canada?

2) Do I need to file anything other than the four page T1 in the first place? That's probably a silly question but my mom had always done my taxes for me (she's an accountant). I worked in 2011, I was not self-employed and I didn't attend any post secondary schools in 2011. Is there anything else I need to file?

3) On a related note, should I need anything other than the basic t4 forms to file my taxes?

Edited March 5, 2012 by Andy and Kayla