CANADA Income Tax Liability for first year TN holder -

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david ingram replies:

If your intention is to stay in the US, the 183 day rule does NOTapply.

QUESTION:I started working in the states last April for about 8 months with a TN visa. I was wondering if I have to pay taxes on income earned in the states to Canada as well?------------------------------------------

david ingram replies:

You should file a departing Canada Income tax return with form T1161and maybe a 1243 and 1244 if you have left any assets behind.

These older questions will help a bit


xxxxx wrote:-------------------------------------------------
david ingram replies:

As described, you have no tax to pay to Canada and should not havebought an RRSP for 2007.

Basically, you should be filing a departing Canada return and look atT1161 to see if it is necessary to file it -  Usually, you would fileit is you own a summer cottage, home, non-RRSP mutual fund or brokerageaccount or are leaving a share of a family business or farm behind.

For the US, you would file a US1040.  there is no tax return in Texas,Nevada, Alaska, Florida for you to file.

If your intention is to come back to Canada, you should likely NOT buya ROTH.  If you want a tax deduction buy a conventional IRA orparticipate larger in a company 401(K)

We charge $900 to $3000 for US Canada tax returns

There is a more detailed list further down below.

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I am Canadian citizen and have beenworking in USA on TN-Visa since 2004. I have a valid Canadian driverlicense, no medical card, working bank account and has no property. Allmy family is staying with me in USA.

1) Am I suppose to file a Canadiantaxes every year.

2) If I do, what would be the roughlytax break up like 20% paying in Canada and 80% in USA.

3) What would be your fee to fileCanadian and USA taxes.

Thanks & regards.

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david ingram replies:

You should have filed a departing Canada return in 2004.  there is noneed to file a 2005, 2006, or 2007 return as you have described yoursituation.

If, on the other hand, the Canadian government asks you for a returnfor any of those years, you, as a Canadian citizen, are required tofile.  Report all of your US income on the T1 and then deduct it all online 256 of the return under Article IV of the US - Canada Income TaxConvention (treaty).

This older question and answer may help

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I moved to Nevada for a job July 2007, and still work there now.  Do Ido my
taxes in canada and us seperately? My earnings for 2007 in Canada werevery
low.
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david ingram replies:

You have more than one choice.

1.   a) You file a departing Canada tax return including form T1161 and1243 and 1244 if you left more than $25,000 worth of assets behind.
   
        b)
You file a 1040NR Dual Status Statement for the US and then a 1040Dual Status Return to report the US income only.  The statement isthere to separate out any US income you may have received BEFORE youactually went to the US. You can NOT claim the standard deduction on aDual Status Return You can only use itemized deductions on a DualStatus Return. 

2.   a)   You file Canada as in 1a) above.

       b)   You file a 1040 tax return reporting your world income forthe year including the Canadian income.  Then you file US form 1116 toclaim a foreign tax credit for the tax, CPP and EI you paid to Canada. This allows you to claim the standard deduction on the US return.

Good luck.  Remember that you can always send the returns here by fax,courier snail mail or pdf email.
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david ingram replies

If you are applying for an H1B visa and intend to get a green card andyour family is not moving unitl the resident alien cards come through,you should be filing as a US resident and not paying tax in Canada.  Ifyou have a house, it should be put in your wife's name only.  You wouldfile a US joint return with your wife and claim your children asdependents.

If you are not intending to stay in the US and are still spending a lotof time in Canada, you would file as a Canadian resident and claim aforeign tax credit for the taxes, FICA and Medicare taxes you pay tothe US after filing your US 1040.

There is an in between position where you might be a factual residentof Canada where you report your US income to Canada but deduct it thenon line 256 under Article IV of the US Canada Income Tax Convention. Inthis case you would be a tax resident of the US and file a joint USreturn with your wife.

You need to sit down in person or by phone with someone who reallyunderstands it.