Filing taxes in Canada - 2 Canadian Citizens

[MarkYYC 0]

Hi everyone!

I am in need of some tax help, I think our situation is a little well...complicated.

My wife and I are both Canadian citizens, but she is also American. I have been reading that in order to file for my taxes ( I moved 09/2013, but didn't work in the US in 2013) I need to do it in paper, but I have also read that I can do it online. Which is true? Any advice on the easiest way to do this?

I also had a business in Canada, and I need to pay some GST owing from 2013 (due by April 30th I believe). I am pretty sure I can do this via my bank account (still open in Canada), does anyone know for sure? If not I can find out.

But the really tricky part is that my wife and I are both Canadian citizens, and I just realized that this might make filling tricky. Do I need to file as married in Canada? I assume that I do, but do I need to include my wife then? She has never worked/filed in Canada before (she moved when she was 18, just before college). Could we file married but separately?

If we do have to file together, will her 2013 US income be taxed?

Thanks!

Mark

[Kathryn41 3,205]

Was your wife resident in Canada in 2013? If not, then no, she shouldn't have to file a Canadian tax return. While the US bases its income tax requirements on citizenship, Canada bases its income tax requirements on residency so even if you are a Canadian citizen, if you are not resident in Canada during the tax year and have no Canadian based income, then there is no need to file a Canadian tax return. You would file your regular tax return but instead of being for the full year, it would be an 'exit' return listing the date you left. Since you were not married when you left, you would file as single/unmarried.

Yes, you should be able to pay the outstanding GST owed through your Canadian bank account. It is actually a good idea to leave a Canadian bank account open for at least one year after you immigrate to the US (or longer - I still have an account in Canada and have been here 10 years now) in order to deal with things like income tax, etc.

I don't know if they still do this but when I moved, Canada Revenue Agency allowed me to claim a full year's deductions based on my partial year Canadian income as I had no other income that year, even though I moved part way through the year. I had to write a letter requesting that they treat my income up to my departure date as a full year income as it was my sole source of income for the whole year. It gave me a great tax refund.

There is a good booklet published by CRA about tax Information for emigrants available on their website.

I highly recommend reading it. http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/lvng-eng.html .

I would also suggest reviewing the IRS information about how to claim taxes as married filing jointly as a new immigrant in one of the tax guidebooks. You would basically declare your Canadian income, then claim a foreign tax credit for the amount of tax you paid in Canada which more or less negates your tax burden to the US, but your wife is then able to declare you as a dependent and get the benefits that accrue from that. You don't have to file that way, but it is an option that my work well for the both of you.

I am sure others will be able to offer your greater advice. Good luck.

Edited April 3, 2014 by Kathryn41

[Rob & Monika 87]

We just did our first taxes, and I couldn't find a way to efile the Form T1243 for deemed dispositions. We used Turbotax to generate the tax forms, printed them, and attached the T1243 before mailing it.

[MarkYYC 0]

Thanks for the advice guys! I am still confused on one thing though - would I file my 2013 Canadian taxes as married? Or single?

[nightingalejules 678]

Thanks for the advice guys! I am still confused on one thing though - would I file my 2013 Canadian taxes as married? Or single?

I'm pretty sure that you have to file as married... after all, you are married. The trouble is that Canadian taxes don't allow you to do a "married filing separately" option. So your spouse may have to file a Canadian tax return (even though she has no income in Canada). Although the part of the form where it asks for information on your spouse really only applies to getting benefits like the GST rebate (for which you no longer qualify because you're no longer a resident, I think). So it may not matter.

On the other hand, Canadian government officials are authorized to give out a lot more information on request, so you'd definitely be well served to call the CRA's information number and ask them what you should do. They'll actually tell you! (pretty refreshing after dealing with US government, where it always seems like a game of 20 questions because they're not allowed to give advice)

[NikLR 13,232]

You do not have to include a spouse's income on your tax return. That is how you "mfs" in Canada. I did not include my husband's income on my 2013 Canadian tax exit return because he made too much money. I refuse to pay Canadian taxes on that. Last year, when he'd only had the job for 4 months, then it made sense to include him because I got more out of it, but this year, not a chance.

Spouses who do not work in Canada do not have to file a return in Canada. Canada only makes you file for the period of time you were there. If you were married by Dec 31, 2013, you do have to mark married for your marital status.

Edited April 7, 2014 by NLR

[Lemonslice 4,960]

Including my husband's income on my Canadian tax return makes no difference for me (I am still required to file in Canada) - but now I am curious, I'll check again. His income is not taxable in Canada, only some of mine. The only place I added his income is on the "spouse income" line on the first page, didn't have to calculate anything with it.

Edited April 7, 2014 by Boston~Montreal

[NikLR 13,232]

Including my husband's income on my Canadian tax return makes no difference for me (I am still required to file in Canada) - but now I am curious, I'll check again. His income is not taxable in Canada, only some of mine. The only place I added his income is on the "spouse income" line on the first page, didn't have to calculate anything with it.

But when you read through the instructions and the entire tax return, you're supposed to add that income to your income later on in the form.

I filled the whole darn thing out by hand.

YOu also do not need to write down any US income earned that year. Just until you left Canada.

[Lemonslice 4,960]

But when you read through the instructions and the entire tax return, you're supposed to add that income to your income later on in the form.

I filled the whole darn thing out by hand.

YOu also do not need to write down any US income earned that year. Just until you left Canada.

I have been living in the US for more than 4 years now. Job 1 is taxable in the US; Job 2 is taxable in Canada according to the "UNITED STATES - CANADA INCOME TAX CONVENTION" - I am filing the 5013-R T1 General 2013 - Income Tax and Benefit Return for Non-Residents and Deemed Residents of Canada, and listing my US income in schedule A and my spouse income one "Enter his or her net world income for 2013 to claim certain credits". [Job 1 income is on our Federal and State return.

Looked over my calculation once more, and my husband's income would have an impact on the Universal Child benefit, the Working Income Tax Benefit and the GST refund, benefits that I am not eligible for (no child, not a resident) - but not on my taxes or credits.

NLR, if you could please let me know where you entered your husband's income again, I will verify on my side (I am filing the same as previous year, had it done by an accountant at first and CRA didn't find errors (so far!))

[NikLR 13,232]

Calling CRA to ask.

I am not paying Canada 15k on my husband's US income.... I do not want to include his income... Period.

[NikLR 13,232]

Okay talked to CRA international line.

Because my husband does not have an SIN and has never worked in Canada I do not include his income on my tax return. I put his name only.

There is a special address to send the return to:

Canada Revenue Agency

PO Box 9769

STN -T

Ottawa, ON

Canada K1G 3Y4

Also because most of my income was in Canada I am supposed to write a note to include that says

"I do meet the 90% rule and qualify for full non-refundable tax credits"

WOOT

mystery solved!

[Lemonslice 4,960]

Great :-) in my situation, it's actually saving us taxes, I felt bad it was increasing yours. The CRA international people are really nice and helpful too.

[NikLR 13,232]

PS don't forget Schedule A and Schedule D !!! I just realized I did, and thankfully haven't sent it off yet. But I'm off to buy more black ink. LOL

[NikLR 13,232]

Great :-) in my situation, it's actually saving us taxes, I felt bad it was increasing yours. The CRA international people are really nice and helpful too.

Yeah last year I included his because I got more out of it. He only make like 15k last year in the USA because he was only employed from Sept-Dec. It had me praying at the interview they wouldn't ask for his 2012 tax return though, even though he'd filed an extension. I had 6 months of pay stubs included showing his "yearly income" and hourly wage which was MORE than enough so I guess they figured he was a safe bet. Being a veteran probably didn't hurt either.

Just remember, once you move to the USA, you need to cancel the GST and CCTB.

[Lemonslice 4,960]

I've been in the US for years now... and I was not getting the GST returns in Canada, so nothing to cancel, but good to remind others, never fun having to reimburse them.