Arrgghh...taxed twice!

[Wis-Can 0]

Hey everyone, I need to vent. I just went and had our taxes done by a local accounting firm. Apparently the fact that Canada and the US have a tax tready between the countries doesn't matter here in Wisconsin. It helps with the federal return, as they do the foreign tax credit, but state is a different story. So my $18,000 of Canadian income gets added on and taxed for the state return. I am so mad and upset right now. Any other Canadians run into this problem in the state you moved to??

[soon2batexan 3]

That sounds very strange to me. There are indeed tax treaties in place, so it's odd that you would've been taxed twice. Does your accountant specialize in cross-border tax issues? We talked to several before settling on one who specializes in ex-pat taxes, and his sense was that while a lot of accountants can process taxes, not all are aware of the potential tax savings available to you, especially your first year here...that was just his sense of things.

We're awaiting the completion of ours, but I certainly wish you the best! Hopefully there's a way they can turn things around for you...it's not right that you're being taxed twice!!

[Flames9_RN 358]

for fun, post on thgis tax forum and see what they have to say: http://forums.serbinski.com/ its free, so can't hurt.

[damulag 26]

As far as Wisconsin should be concerned you earned the Canadian income when you were not a resident of Wisconsin, you need to fill out Wisconsin tax as a partial year resident.

[Dakine10 5,452]

Hey everyone, I need to vent. I just went and had our taxes done by a local accounting firm. Apparently the fact that Canada and the US have a tax tready between the countries doesn't matter here in Wisconsin. It helps with the federal return, as they do the foreign tax credit, but state is a different story. So my $18,000 of Canadian income gets added on and taxed for the state return. I am so mad and upset right now. Any other Canadians run into this problem in the state you moved to??

Hey everyone, I need to vent. I just went and had our taxes done by a local accounting firm. Apparently the fact that Canada and the US have a tax tready between the countries doesn't matter here in Wisconsin. It helps with the federal return, as they do the foreign tax credit, but state is a different story. So my $18,000 of Canadian income gets added on and taxed for the state return. I am so mad and upset right now. Any other Canadians run into this problem in the state you moved to??

Did you earn the Canadian income before you moved to Wisconsin or while you were a Wisconsin resident? I don't know the specifics of Wisconsin's tax code but assuming you earned the foreign income while you were a Wisconsin resident, it sounds correct that you would owe state tax.

Unfortunately most states only give credit for taxes paid to another state. Only a few states allow credit for taxes paid to Canadian provinces.

If I remember correctly, and I'm not sure I do because it's been a while, the foreign income increases your federal AGI, and you get the tax credit on the federal return to lower federal taxes. Since Wisconsin state tax is based on your federal AGI, you now owe more in state taxes, but there is no state credit to offset it.

There's usually a tax thread or three on the Canadian regional forum at this time of year. You might want to repost the question there for a more up to date answer. I used to know this stuff well but it's really starting to fade now.