Filing Canadian Taxes

[sarahbella 3]

Hello all,

Question about taxes, because H&R Block hasn't called us back in 3 weeks and I figure I can sort this out on my own. (hopefully)

Our situation:

Left Canada on K-1 Visa on August 13, 2014. Got married on Oct 4, 2014. I worked in Canada before I left. Did not get my EAD until January 2, 2015. Called the cra to let them know I left Canada once I arrived in the US.

Now, when I file my Canadian taxes do I have to do anything special? I just tried it out on Turbotax and it does everything I ask it to, putting in my medical expenses, transit pass, all of that. Now do I have to add my US Spouse's information to my tax form? The Turbo Tax keeps asking what my Spouse's income is. Do I have to tell them that? We weren't married while I was a Canadian resident. (also it totally reduces my return amount)

Any help would be appreciated!

Thanks,

Sarah

[NikLR 13,227]

try doing your taxes on paper instead.

[Rob & Monika 87]

The Canadian TurboTax is not entirely clear when it comes to residency status. For 2013 it asked what our residency status was as of Dec 31 2013, which for us was Non Resident, and asked for the date we left. But for tax purposes, filing as a Non Resident is not correct and I don't know if they fixed their software since. I complained and they basically told me I did it wrong...even though their instructions were clearly wrong. You are a partial year resident and I'm not convinced TurboTax does it right following the instructions they give.

As far as your marital status, you are filing as single from Jan 1st to Aug 13th. Anything earned after Aug 13th is taxable in the US.

For the US taxes, you will have 2 options and you will need to see which one is better for you. If you file jointly, you have to include all of your Canadian 2014 income on your joint US taxes. I know you get foreign tax credits at the federal level, but at the state level you could end up owing if you file jointly. I don't know if turbo tax lets you file the state and federal with different marital statuses. The second option is to file Married filing separately. For this, you would only be taxed for your income while in the US after Aug 13th. Also note that if you have financial assets still in Canada, you may have to report them to the IRS depending on the amounts.

I would also suggest checking out http://forums.serbinski.com/for CD/US tax questions.

Edited February 23, 2015 by Rob & Monika

[sarahbella 3]

try doing your taxes on paper instead.

The Canadian TurboTax is not entirely clear when it comes to residency status. For 2013 it asked what our residency status was as of Dec 31 2013, which for us was Non Resident, and asked for the date we left. But for tax purposes, filing as a Non Resident is not correct and I don't know if they fixed their software since. I complained and they basically told me I did it wrong...even though their instructions were clearly wrong. You are a partial year resident and I'm not convinced TurboTax does it right following the instructions they give.

As far as your marital status, you are filing as single from Jan 1st to Aug 13th. Anything earned after Aug 13th is taxable in the US.

For the US taxes, you will have 2 options and you will need to see which one is better for you. If you file jointly, you have to include all of your Canadian 2014 income on your joint US taxes. I know you get foreign tax credits at the federal level, but at the state level you could end up owing if you file jointly. I don't know if turbo tax lets you file the state and federal with different marital statuses. The second option is to file Married filing separately. For this, you would only be taxed for your income while in the US after Aug 13th. Also note that if you have financial assets still in Canada, you may have to report them to the IRS depending on the amounts.

I would also suggest checking out http://forums.serbinski.com/for CD/US tax questions.

Thanks. I ended up staying up trying to do my taxes on paper. Plugging through today. I still tell them I'm married though, right? Now I'm confused as to what I should put on the first page. Currently I have Non-Resident as of Dec 31, 2014 and wrote in my departure date where it asks. It asks as of Dec 31 my marital status, I put married. Then when talking about my spouse I put her Net Income from her W2? In CAD not USD? (holy ####### that's a lot more money in CAD) This is where I get confused because obviously we didn't get married until after I got here. While I was a Canadian Resident I was single.

I will keep looking on serbinski, though I find it hard to navigate because I don't understand anything about taxes but perhaps there are K-1 visa questions I just need to search.

Thanks

[Rob & Monika 87]

Also, if you have more than 25k in assets the day you left, like property, stocks, and anything else that can be taxed as capital gains upon the sale, you will have fill out a T1161 to report the capital gains that accrued prior to leaving Canada.

I see the paper forms are taking you down the same road we went down with Turbo Tax. The good news is that the CRA will correct it all for you if you screw up (which we did). I'll have to dig it out and see what was changed, but from what I can remember, it was changed from non-resident to resident, and some things like tax credits were reduced to the percentage of time as a resident (so you were a resident for 62% of the year, you would multiply the tax credit by .62...like the basic personal credit.) This site mentions those deductions that are percentage based: http://support.drtax.ca/dtmax/eng/kb/dtmax/Keywords/T1/g421.htm

Edited February 23, 2015 by Rob & Monika

[NikLR 13,227]

If you were not married in 2014 you put down not married but if you were then put down married, all zeros for his SIN, and you don't need to include his income. The only time that is required is if you get CCTB or gst checks.