Would appreciate if someone could help answer the following questions with regards to filling for US taxes. This is my first year of filing taxes in the US after getting a green card last year.
1) I do not have an accurate base amount for my RRSP at the time I left Canada, should I use approximate numbers to calculate any interest earned under it (no capital gains) for reporting on form 8891?
2) If the tax refund I will get from CRA due to RRSP contributions last year should be deducted from Canadian tax credit that will go on form 1040 ?
3) I will be paying taxes on interest income to CRA because the banks didn't convert me to a "non-resident" status and thus sent me a t5 instead of a NR4, so should I include this as credit on my tax returns for US (for 1040)?
Thanks in advance!
Hari
US-Canada Tax filling - first time!
Moderator: Mark T Serbinski CA CPA
1. 8891 is used to defer taxation, thus you do not report any interest or gains. Follow the form.
2. Correct. Use the TAX payable as the basis towards your foreign tax credit. You should be using the better 2555 to exempt the Cdn wages instead, but that is your choice I guess.
3. Yes. But it merely becomes part of your TOTAL Cdn income, which you then prorate the tax towards that income. If you reported $1000 of income of which $10 was interest, then only 1% of your total tax bill goes toward interest.
What you should have doen was only report the portion of interest earned before you left canada on your Cdn return, since there is no tax for non-residents. It doesn't matter which form the ban k sent you.
2. Correct. Use the TAX payable as the basis towards your foreign tax credit. You should be using the better 2555 to exempt the Cdn wages instead, but that is your choice I guess.
3. Yes. But it merely becomes part of your TOTAL Cdn income, which you then prorate the tax towards that income. If you reported $1000 of income of which $10 was interest, then only 1% of your total tax bill goes toward interest.
What you should have doen was only report the portion of interest earned before you left canada on your Cdn return, since there is no tax for non-residents. It doesn't matter which form the ban k sent you.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thank you Nelsona!!
I have more question for you -
1) Going back to the first point - should I use an approximate amount to come up with the base cost of my RRSP since I do not have the accurate information from the time I moved to the US even though I may defer the taxation for now?
2) I am married to a US citizen, so should be filled "Married Jointly" and can this be done online or I have to mail in the forms because this is my first US tax filling? Also for Tax purposes does that make me have a dual status given that part of the year I lived in Canada and thus require me to send some type of a letter with my tax forms
3) If I use form 2555, the "foreign earned income exclusion" for the period before I moved to the US happens to be less that the total wages I earned, so can I claim the tax credit for the difference on form 1116 and if so, how do I come up with the tax credit for the same, do I prorate?
4) Besides filling out 1040, 8891, 2555, 1116 & TDF 90.22.1 do I need to fill out any other forms, I don't have any other investments in Canada but do own a house there.
Thanks!
I have more question for you -
1) Going back to the first point - should I use an approximate amount to come up with the base cost of my RRSP since I do not have the accurate information from the time I moved to the US even though I may defer the taxation for now?
2) I am married to a US citizen, so should be filled "Married Jointly" and can this be done online or I have to mail in the forms because this is my first US tax filling? Also for Tax purposes does that make me have a dual status given that part of the year I lived in Canada and thus require me to send some type of a letter with my tax forms
3) If I use form 2555, the "foreign earned income exclusion" for the period before I moved to the US happens to be less that the total wages I earned, so can I claim the tax credit for the difference on form 1116 and if so, how do I come up with the tax credit for the same, do I prorate?
4) Besides filling out 1040, 8891, 2555, 1116 & TDF 90.22.1 do I need to fill out any other forms, I don't have any other investments in Canada but do own a house there.
Thanks!
I'm surprised you don't have accurate information -- you are required even in canada to keep accurate records of your RRSP. The book value of your RRSP should be at your fingertips from less than a year ago.
Besides, nowhere on 8891 does it ask for your arrival value. It asks for year-end value. Their is no good reason to NOT make the election deferral, especially if you have such trouble keeping track of your investements.
2. You will file married joint. You may or may not be able to file online, but that would onlly be for thsi year, given you were not in the system last year. Not important.
3. Of course. Your software will figure this out.
4. Only if you rent out your house will you have other forms.
Besides, nowhere on 8891 does it ask for your arrival value. It asks for year-end value. Their is no good reason to NOT make the election deferral, especially if you have such trouble keeping track of your investements.
2. You will file married joint. You may or may not be able to file online, but that would onlly be for thsi year, given you were not in the system last year. Not important.
3. Of course. Your software will figure this out.
4. Only if you rent out your house will you have other forms.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Nelsona,
Please help confirm the following with regards to reporting foreign tax credit -
Say I earned $40,000 for the 5 months i lived in Canada, I paid $10,000 tax and I am getting a refund of $2000 from CRA.
Form 2555 would let me report $35,000 only (prorated for the period based on limit of $91,500).
For the rest 5000, I would like to take foreign tax credit, so I will report
Total tax for 2010 = 10000-2000 = 8000
Tax credit I can claim in US = (5000/40,000) * 8000 = $1000 * (Exchange Rate on Dec 31)
Thanks again!
Please help confirm the following with regards to reporting foreign tax credit -
Say I earned $40,000 for the 5 months i lived in Canada, I paid $10,000 tax and I am getting a refund of $2000 from CRA.
Form 2555 would let me report $35,000 only (prorated for the period based on limit of $91,500).
For the rest 5000, I would like to take foreign tax credit, so I will report
Total tax for 2010 = 10000-2000 = 8000
Tax credit I can claim in US = (5000/40,000) * 8000 = $1000 * (Exchange Rate on Dec 31)
Thanks again!
Thanks Nelsona,
One more question -
I am trying to claim the foreign tax credit for myself, but because I am filling jointly with my wife, the form 1116 generated by turbo tax has both our names and her social security number, I guess cause she had an online turbo tax account from previous years which we are now using to file jointly for the first time.
Would this be acceptable, or should the form just have my name & SSN?
Basically except for form 1040, the other forms that are relevant to me only such as the 8891 or tdf 90-22.1 should be filled using my name & SSN only?
Thanks again!
One more question -
I am trying to claim the foreign tax credit for myself, but because I am filling jointly with my wife, the form 1116 generated by turbo tax has both our names and her social security number, I guess cause she had an online turbo tax account from previous years which we are now using to file jointly for the first time.
Would this be acceptable, or should the form just have my name & SSN?
Basically except for form 1040, the other forms that are relevant to me only such as the 8891 or tdf 90-22.1 should be filled using my name & SSN only?
Thanks again!
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montesjesse
- Posts: 6
- Joined: Wed Aug 24, 2011 9:56 am
rental income
Nelsona,
If I do have a house in Canada that I rent out, what form do I need to file when completing my US taxes?
I am a dual citizen in Canada, and I am trying to complete a quiet disclosure for the past 6 years.
If I do have a house in Canada that I rent out, what form do I need to file when completing my US taxes?
I am a dual citizen in Canada, and I am trying to complete a quiet disclosure for the past 6 years.
-
montesjesse
- Posts: 6
- Joined: Wed Aug 24, 2011 9:56 am