As both my wife and I work in MI but live in Windsor, I noticed the tax rates are actually higher for us in US (no mortgage, child is over 19), so RRSP contributions are not lowering the Canadian side of the tax burden.
Is it a better strategy to increase contribution to 401 (k) - more so that it is now recognized in Canada?
I have commuter GC, wife has TN.
Tax strategy 1040MFJ/1040NR and living in Canada
Moderator: Mark T Serbinski CA CPA
If your US rate is still higher, then you should dfinitely be contributing to 401(K) instead of RRSP.
Of course this will lower BOTH your US and Cdn rates, while RRSP contributions only lowerr Cdn taxes.
I think you meant to say that RRSP is not lowering the US tax burden.
If you did not have GC, then you could both file 1040NR using the Article XXV method, but this does not work for GC holder.
Of course this will lower BOTH your US and Cdn rates, while RRSP contributions only lowerr Cdn taxes.
I think you meant to say that RRSP is not lowering the US tax burden.
If you did not have GC, then you could both file 1040NR using the Article XXV method, but this does not work for GC holder.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
1) Somehow the 401 (k) contribution does not seem to make a difference to my Can taxes; I fill out form RC268, which affects my net Income, but no change in overall tax payable (Ontario Health Tax).
For RRSP I need to contribute over $18k to make a difference ($150 less in taxes).
Am I doing something wrong? Should I put the amount from RC268 in the RRSP contribution worksheet?
2) For GC, I have commuter status, for which I need to proof employment every 6 months - the US thus knows I still live in Canada, therefore I should be able to still use the 1040NR.
For RRSP I need to contribute over $18k to make a difference ($150 less in taxes).
Am I doing something wrong? Should I put the amount from RC268 in the RRSP contribution worksheet?
2) For GC, I have commuter status, for which I need to proof employment every 6 months - the US thus knows I still live in Canada, therefore I should be able to still use the 1040NR.
Cheers
With GC, you should be filing 1040, not 1040NR.
I'm thinking you are making a mistaek if you 401(k) isnot affecting Cdn tax. It should be as powerful as any RRSP contribution. Obviously it has to line 207 of your tax return in the same line as your RRSP .
I'm thinking you are making a mistaek if you 401(k) isnot affecting Cdn tax. It should be as powerful as any RRSP contribution. Obviously it has to line 207 of your tax return in the same line as your RRSP .
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
For whoever is interested in the topic, I am just now receiveing my tax refund from IRS for FY2010, after many calls, all due to the GC status (albeit commuter) filing a 1040NR instead of 1040; I am a dual status resident (US/CAN) living in Canada. They eventually accepted my 1040NR as filed (with 1040 pro-forma).
There is a special IRS # to call for International Taxation issues (not the regular number): 267-941-1000; they are far more knowledgeable in cross-border issues than the employees at the main number.
There is a special IRS # to call for International Taxation issues (not the regular number): 267-941-1000; they are far more knowledgeable in cross-border issues than the employees at the main number.
Cheers