2010 Tax thread - For Canada and the U.S.

[trailmix 77]

I don't know why Turbotax will not let me enter her income like that. It simply will not give me the option for that other form, only gives me the option for a W2. I upgraded from the basic account type, so it should not be an issue of it being a premium feature or anything like that. I am really dreading having to do this by hand, but that is just what it is looking like. I've been at this for nearly 5 hours and I can't figure out how to enter her income, nor will it allow me to just wipe the data and start over. I deleted both of our entries and as soon as I re-enter my name or hers, it auto-enters the previous data. /sigh

I used turbotax last year and I hated it, I also spent hours going in circles. I did, however, finally get it done.

If I remember correctly, in order to delete the info you have to actually delete the form from the list of forms (but hey, I might be remembering that incorrectly) I too had the same problem.

I found this:

Online, please follow these steps:

1) In TurboTax, select the Home Tab, then Program Options

2) At the bottom of the window, select Delete a Form

3) Select Schedule E to delete and then click the Delete link

4) Click Delete Selected Form to confirm

Now the thing is, I also found information from another user who said it wouldn't let him delete a certain schedule. What he discovered is that the form has to be completed before it will let you delete it

Honestly, it took me less time to do 3 years manually.

[The_Dude 1,142]

My problem is that it won't let me add my wifes wages onto my line 7, all it does is list as a negative number her income on line 21. I think this incorrectly lowers my taxable income. Am I wrong? Should my wifes foreign income be added to my wages in line 7 on form 1040?

[trailmix 77]

My problem is that it won't let me add my wifes wages onto my line 7, all it does is list as a negative number her income on line 21. I think this incorrectly lowers my taxable income. Am I wrong? Should my wifes foreign income be added to my wages in line 7 on form 1040?

Ok I see what you are saying. I will be zero help with that because I didn't have any income in that year - so it was just my Husband's W2s and his 'other' Canadian income showing on line 7 and excluded Canadian income on line 21.

But the bottom line is yes, that foreign income must be included on line 7.

Edited February 19, 2010 by trailmix

[redBlue 1]

I was wondering If we can contribute to the IRA as soon as we move to the USA as a permanent resident?

If we can ,how do they determine how much we can contribute since they wouldn't know anything about our work history etc..

Thnx

[zyggy 9]

Hi zyggy!!!!

*waves*

You were SO helpful to me last year, how're you doing?

Hope all is well...

Best,

LGG

Hello,

I'm doing well. Still hanging around this time of year to lend a hand.

Zyg

[zyggy 9]

I was wondering If we can contribute to the IRA as soon as we move to the USA as a permanent resident?

If we can ,how do they determine how much we can contribute since they wouldn't know anything about our work history etc..

Thnx

Yes,

Whether or not you can contribute and how much is dependent on whether or not your employer offers a 401k or other retirement plan (pension, etc.) and your income. Consult IRS Pub. 590

[zyggy 9]

I'm guessing that with my income being all from Canada, and they did deduct the 25% NR tax, that I really don't need to file a return with them even though it was earned in 2009 and I've lived here since July 2008?

You may be able to get a portion of the 25% back by filing a Section 217 return (basically the income is less than the 25% tax bracket). Don't let the CRA keep money that they have no right in keeping.

[zyggy 9]

My problem is that it won't let me add my wifes wages onto my line 7, all it does is list as a negative number her income on line 21. I think this incorrectly lowers my taxable income. Am I wrong? Should my wifes foreign income be added to my wages in line 7 on form 1040?

From Turbo Taxes website

Try reporting foreign earned income as "wages not already reported." Here's how:

1. Revisit the Other Income section of the interview.
   
2. On the screen Indicate any Other Income Items clear the checkbox Foreign Earned Income and select the Wages not already reported checkbox instead.
   
3. Answer Yes to the question Any wages Not Reported?
   
4. Continue through the Household Employee Income questions.
   
5. Then continue through the Sick/Disability Pay questions.
   
6. A foreign earned income screen will now appear and this is where you can enter the income amount.
   

[Kathryn41 3,205]

That 90% rule is something we are actually STILL dealing with from my husband's 2008 taxes in Canada. He had an issue with someone not sending the tax form they should have sent him until after he filed his taxes and needed to make an adjustment for that reason, plus they did not give him the full deduction, assuming that less than 90% of his income was from Canada since he emigrated in July. So he filed a form for an adjustment, adding the income that he had left out because he got the form late and also stating that all of his 2008 income was from Canadian sources. He just got a form letter today telling him that they calculated his taxes based on the adjustment. However, it appears that they added the income without changing the deduction.

So here is my question: what does he have to do or say to get them to give him the full credit because his income was all from Canadian sources? What did you say?

I actually had a problem with the International Tax Office not making the correct credits as well. I contacted my former MP's office and asked them to investigate for me. The answer they got back is that my letter requesting the full year credits wasn't clearly stated enough (only if you don't read it, btw - no one else had difficulty knowing exactly what was requested!). Anyway, I rewrote the letter using very simple words and very simple sentences (that was actually fun to do) and sent it to my MP's office who then submitted it through their channels. I ended up getting the full credits and an additional refund. So, I would suggest contacting your husband's former MP's office and explaining you are trying to get the International Tax Office to get your refund processed correctly. I think I finally got my full refund by the end of August - I filed in February.

[minnew 4]

I have a question about residency status for my Leaving Canada return. I have been reading income

tax guides, previous threads & playing around with Ufile to see if it fits my needs. So confused.

I became a PR of the United States in December 09. Moved to the US on K 1 visa in September of 09. Obviously spent more than 183 days in Canada. However I cannot be a PR of the US & file as a resident (for tax purposes) in Canada!? Guess I cannot file as a non resident and still get full exemption & tax credits using 90% rule? I had NO canadian or US income after I moved to the US in September.

Is it possible to file as a deemed resident of Canada & it NOT affect my PR status in the USA?

I know I cannot claim SK provincial territorial credits but I worked for 8 months in Canada in 2009 & also cashed out a public employees pension. So the provincial tax still comes into play.

I'm thinking it's too late to file an NR73!

HELP!

Edited February 20, 2010 by minnew

[Ban Hammer 13,342]

taxes! did ours today.

even with baby boy and his child care deductions, we still owe state almost what we owed last year!

[Kathryn41 3,205]

I have a question about residency status for my Leaving Canada return. I have been reading income

tax guides, previous threads & playing around with Ufile to see if it fits my needs. So confused.

I became a PR of the United States in December 09. Moved to the US on K 1 visa in September of 09. Obviously spent more than 183 days in Canada. However I cannot be a PR of the US & file as a resident (for tax purposes) in Canada!? Guess I cannot file as a non resident and still get full exemption & tax credits using 90% rule? I had NO canadian or US income after I moved to the US in September.

I know I cannot claim provincial territorial credits but I worked for 8 months in Canada in 2009 & also cashed out a public employees pension. So the provincial tax still comes into play.

I'm thinking it's too late to file an NR73!

HELP!

You would file your Canadian tax returns as normal for your province with your leaving date as September. Since more than 90% of your world income is from Canadian based sources, you can include a letter with your tax return requesting that they allow you a full year's credit for the Federal tax credits as your Canadian income is your full year's income. That will give you a good sized return. You aren't filing as a current Canadian resident - you would be submitting the return to the International Tax Office, not to the Provincial office.

If you are choosing to file your US return with your husband, you can choose to be taxed as if you were resident in the US for the full year by claiming your Canadian income on the return and then taking the foreign tax credit which virtually cancels it out. This allows him to claim the available spousal deductions. You would include your income (worked out into US dollars) and then could take a foreign tax credit for it. There is a separate schedule to declare the pension income as it is handled differently than earned income in the US. (I cashed out my RRSPs before I moved here so had that as part of my annual income). You would need to complete your Canadian return before doing the US return because you need the income amounts and the tax paid amount to include in the US return.

I really suggest investing in one of those published tax guides and read up on what they say for filing taxes as an immigrant in the US and what options are available. That way you can decide which method is most beneficial for you. You will also want to get the "Emigrating" booklet from Canada Revenue Agency which will allow you to get the maximum refunds from Canada.

Edited February 20, 2010 by Kathryn41

[minnew 4]

Thank you Kathryn! I was definitely hoping I could still claim tax credits! The emigrants guide is definitely a good read and very helpful! I think I was reading too many guides and getting confused.

Married filing jointly is probably the best option for us, I just wish my former employer in Canada would hurry up & send the T4's! I hope to be able to exclude my income with form 2555. We may have to file for an extension as hubby will be deploying in early march. Unless there is a way for our tax preparer to get started on ours without my employment T4's and i can sign for him with a Power of Attorney? Or some sort of copy of his signature? Anyways we will find out next week what the preparer can do and if any T 4's magically appear in the mail!!!!

Edited February 20, 2010 by minnew

[zyggy 9]

Thank you Kathryn! I was definitely hoping I could still claim tax credits! The emigrants guide is definitely a good read and very helpful! I think I was reading too many guides and getting confused.

Married filing jointly is probably the best option for us, I just wish my former employer in Canada would hurry up & send the T4's! I hope to be able to exclude my income with form 2555. We may have to file for an extension as hubby will be deploying in early march. Unless there is a way for our tax preparer to get started on ours without my employment T4's and i can sign for him with a Power of Attorney? Or some sort of copy of his signature? Anyways we will find out next week what the preparer can do and if any T 4's magically appear in the mail!!!!

Definitely get the power of attorney. IRS Form 2848 or the one the JAG can prepare for your husband. Be sure it allows you to represent him for tax matters.

[Wis-Can 0]

Does anyone who's done the filing of the Canadian Tax returns since coming here give me an idea on how long it took them to complete your return? Basically I just wanted to know if it takes longer because of "not" residing in Canada.