Changing residency for tax purposes while IR-1 pending

[jrs 2]

I am a USC and have been in Canada for the last year and a half as a visitor while we wait for my wife’s interview.  I work for a us company but my accountant wants to file my 2020 us taxes and claim that I am a Canadian resident for tax purposes.  I know I’ll need to bring a copy of my 2020 tax return to my interview so wanted to see if this could cause any complications. 

[Redro 4,611]

Check out the requirement for the AOS (Affidavit of Support).Filing 2020 US Taxes as a Canadian resident will lower your income level.

You'll need to show you earned at least the 3X poverty level for your household size to sponsor your wife. If your income turns out to be $0 for 2020 (and 2021 taxes) depending on when your wife finally interviews. You'll have to get a co-sponsor OR if your planning on working with the same company-you can get a letter from your company indicating you make over the limit and your income will continue in the States. 

Head on over to the Canadian sub-forum. They'll be able to give more info as I believe re-establishing domicile/ moving back to the States is a MUST when the USC lives in Canada. 

[JeanneAdil 6,510]

How long does it take to become a Canadian resident?

 

To meet these residency obligations, you must be physically present in Canada for at least 730 days (2 years) in every 5-year period.

 

Took my step daughter almost 3 years to get her Canadian residency

 

 

and if you are wanting to bring wife to USA on spouse visa ,   the US tax returns are best

[Redro 4,611]

9 hours ago, JeanneAdil said:

How long does it take to become a Canadian resident?

 

To meet these residency obligations, you must be physically present in Canada for at least 730 days (2 years) in every 5-year period.

 

Took my step daughter almost 3 years to get her Canadian residency

 

 

and if you are wanting to bring wife to USA on spouse visa ,   the US tax returns are best

@JeanneAdil raises a good point about Canadian residency. I'm not sure which form your accountant wants you to fill out, but if it's the 2555- you need to be paying taxes in Canada.

I'd chat to an accountant familiar with international tax rules (wrt Canada and USA) as I've seen countless friends not file US taxes because their accountant told them they had no tax obligations as they lived and worked overseas. 

[jrs 2]

It’s 2555.  

[Redro 4,611]

6 minutes ago, jrs said:

It’s 2555.  

You probably won't be able to use the 2555.

https://www.irs.gov/pub/irs-pdf/f2555.pdf 

Here's a link to the form. 

 

And the instructions. 

https://www.irs.gov/pub/irs-pdf/i2555.pdf

[pushbrk 12,894]

I'll just add that, if it were me, I'd tell the accountant that the year you are sponsoring an immigrant is not the year you want to play games with the IRS to lower your taxes.  You're the boss, not the accountant.

[JeanneAdil 6,510]

working for a US company,  they already are withholding federal,  SS, and medicare for US 

and US taxes need to be filed 

 

Surprised any accountant would say file Canadian taxes ALSO when you are not a Canadian  resident  as per their requirement 

when you do meet the IRS exculsion for income with form 2555 :

 

For tax year 2021, the maximum exclusion is $108,700 per person. If two individuals are married, and both work abroad and meet either the bona fide residence test or the physical presence test, each one can choose the foreign earned income exclusion. Together, they can exclude as much as $217,400 for the 2021 tax year

 

 

You meet the physical presence part for living in Canada and the following for source of income

 

The source of your earned income is the place where you perform the services for which you receive the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in France is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is in New York City.

 

When IBM sent us to Japan and then Belgium to work 2 years in each,  we filed our IBM income as foreign

 

and although your wife is Canadian,   she can be included in the exclusion as a nonresident alien spouse with form W7 and supporting evidence

 

https://www.irs.gov/individuals/international-taxpayers/nonresident-alien-spouse