At Wits End With Taxes

[thatangela 134]

Sigh ... hey guys, I'm down the rabbit hole and I can't see daylight.

On TurboTax, if you're trying to fill out Form 2555, you get to this screen. If you're claiming your EI, which button are you clicking, the statement from my foreign employer?

And don't even get me started on trying to figure out the Foreign Tax Credit for my NR4 (LIRA distribution). I can't get any kind of straight answer from the TurboTax people.

What Form(s) Was Foreign Income Reported On?

Let us know what form or statement your foreign income was reported on, so we can help you enter it correctly. Check all that apply:

A regular Form W-2 from your employer

A Form 1099-MISC or other self-employment income

A statement from my foreign employer (could be cash)

An IRS Schedule K-1 from a business partnership

Also, the TurboTax people are saying I have to use Form 1116 but when I do, it does nothing to change the amount of taxes owed. I feel like I'm going to have no choice but to get double taxed even though I'm not supposed to.

[dburnt 59]

I'm going to reply to this post and hope I get some advice. My situation is a little deviated from this.

I entered on a K1 in September 2014 - Green Card in January 2015. I filed my 2014 taxes in Canada as a deemed resident (as I didn't meet the test to file in the US); everything was fine.

In July 2015, I officially retired from my Canadian job (I was on a leave of absence) and began receiving a pension with non-resident tax withheld...no problem. However, when I received my final vacation pay payout, HR had not adjusted my address and no non-resident tax was withheld (no tax at all, just CPP, QPP and EI). So I received a T4 and a T4A as well as an NR4.

With the complexity, we went to H&R Block last night...huge mistake. The guy was clueless (couldn't figure out where to enter anything)...anyway, he told me that I had to file US taxes jointly with my spouse (which I knew) but also had to file in Canada for the T4. Now, unlike the OP above, I did not live in Canada at all in 2015.

So, using Turbo Tax, I am able to enter the T4 as foreign employment income, but of course, I have to pay taxes on it. On its own, it wouldn't be subject to tax since it isn't a large amount.

So the question becomes...do I file taxes in both? If I do, since I only lived in the US, which income do I report on the Canadian return (only the T4 or also the NR4 pension?)?

[TwoChickies 105]

Hi couple questions -

So you filed married filing joint as full year, but did you file your state return as partial year? Turbotax suggested me to file my state return as partial since I lived in foreing country before I moved to USA.

Can you check form 2555, line 9 - where it asks you to list your homes during tax year and dates established. Did you list your taxx home as USA or Canada?

Thanks.

I did indeed file MFJ and said on my state return that I did not live in my state for the entirety of 2015 (since I didn't). On line 9 of 2555 I listed my tax home as the city I resided in for 12 consecutive months ending in 2015. I remember TurboTax had a guide for determining the 12 month period to use. I don't know if you're supposed to list Canada or a more specific place in Canada as your tax home on line 9, I went more specific, but that may be incorrect/unnecessary.

Sigh ... hey guys, I'm down the rabbit hole and I can't see daylight.

On TurboTax, if you're trying to fill out Form 2555, you get to this screen. If you're claiming your EI, which button are you clicking, the statement from my foreign employer?

And don't even get me started on trying to figure out the Foreign Tax Credit for my NR4 (LIRA distribution). I can't get any kind of straight answer from the TurboTax people.

While I can't help with the NR4 (no experience), for the screen regarding EI I clicked "Statement from my foreign employer" since it was reported on a T4E. I don't know if this is the right answer, but it seemed to be the one that fit best with TurboTax.

Sorry these replies are so late (and not very helpful) and tax day is just around the corner. I'm starting to really doubt that I filed correctly, but I have no idea. If I get notices in the coming months, I'll report my mistakes back here to maybe help someone avoid them in the future. Perhaps whatever mistakes I did make won't cause any issue, if I receive my return with no problems I'll report here, too.

Good luck to everyone!

[thatangela 134]

OK, so I think I figured out the NR4 thing. I was advised by TurboTax tax experts (I use the term "expert" loosely) to file the disbursement under the Canadian Registered Pension Income of the Retirement Plans and Social Security.

Then I opened Form 1116 to claim the Foreign Tax Credit. Under that, I filed the NR4 as passive income, since it didn't qualify as a lump-sum disbursement (even though that's exactly what it is).

If I'm wrong, I guess I get audited. I'm taking the chance. Yikes!