Article XXV NOT be better than 1040NR?

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telly1
Posts: 98
Joined: Tue Aug 22, 2006 3:42 pm

Article XXV NOT be better than 1040NR?

Post by telly1 »

Several years ago I filed my own taxes using a pro forma 1040 MFJ as a Canadian commuter working in the US. Fast forward 5 years & a couple of young kids (= no time ;)) & for the past few years I've used a tax preparer. This year, a new preparer tells me our situation does not benefit the use of Article XXV so I filed 1040NR.

There's nothing terribly unique about our situation. Married, 2 children. I commute to the US, husband works in Canada. Our salaries are almost identical at ~$100k & we both contribute ~5% (+ match) to our RRSPs / 401k. At a quick glance, does it make sense that we (I) would not benefit from using a Pro Forma 1040? just trying to get a feel for if I should run through the calculations myself (despite that I've already submitted). I do have some carry forward RRSP contributions that I'd like to use as I've been carrying them forward for a couple years now. The preparer said my husband's income is too high for us to benefit.

Thanks in advance!
nelsona
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Post by nelsona »

Are you fairly confident that this preparer actually ran the numbers, or is he just unfamiliar with how the pro forma works? A good preparer would have run it both ways for you and show you.
I find it hard to believe that, using the tax payments your husband made throughout the year as a deduction on schedule A would not lower the taxrate below your 1040NR rate.

Did he at least get you the $2000 child tax credit?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Post by nelsona »

If it worked for you in 2012, why would it not in 2013.

Sounds like guy was blowing smoke.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
telly1
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Joined: Tue Aug 22, 2006 3:42 pm

Post by telly1 »

[quote="nelsona"]If it worked for you in 2012, why would it not in 2013.

Sounds like guy was blowing smoke.[/quote]

Both my husband & had lower incomes as we both took maternity / paternity leave in 2012. Also, the exchange rate difference?

She said she ran them both ways but could not get the 1040 to work for us but she did not show me. I've not received the Canadian returns yet.
telly1
Posts: 98
Joined: Tue Aug 22, 2006 3:42 pm

Post by telly1 »

[quote="nelsona"]Are you fairly confident that this preparer actually ran the numbers, or is he just unfamiliar with how the pro forma works? A good preparer would have run it both ways for you and show you.
I find it hard to believe that, using the tax payments your husband made throughout the year as a deduction on schedule A would not lower the taxrate below your 1040NR rate.

Did he at least get you the $2000 child tax credit?[/quote]

Is the $2000 child tax credit on the 1040NR? I'll have to take a look. She did not include the credit for child care expenses so I filled out form 2441 for her & she then included it. She didn't think it could be used with 1040NR until I showed her that Form 2441 shows at the very top to attach to form 1040 OR form 1040NR.

Sigh...yes, I'm doubting late (already submitted my 1040NR) & she already screwed up our Canadian returns....

I'll have a look into the $2000 child tax credit as I'm just getting back into tax prep & am unsure what it is. It might be worth filing a 1040X to fix this stuff...
telly1
Posts: 98
Joined: Tue Aug 22, 2006 3:42 pm

Post by telly1 »

Just looking at it...

She did not get me the $2000 child tax credit...
telly1
Posts: 98
Joined: Tue Aug 22, 2006 3:42 pm

Post by telly1 »

By my calculations, the child tax credit (line 48) amounted to $100. Not significant, but something.
nanic
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Joined: Mon Nov 21, 2011 2:26 pm

Use a tax software

Post by nanic »

I recommend you buy Turbotax or Taxact to do your US taxes. The software is very easy to use and I trust it more than some tax preparer. The advantage of Taxact is that you can file your FinCEN forms with it. You can also buy the canadian version to Turbo tax to do your Canadian taxes.
nelsona
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Post by nelsona »

It is significant that he lost you the $1900.

I am convinced you are dealing with the worst case in your "preparer": too little knowledge and too much laziness.

You have used proforma in the past. Use nanic's suggestion and do your own. You can fix this.
And then request a full refund from the idiot you dealt with.

I'd ask you to put his name here, but this is not my website.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
telly1
Posts: 98
Joined: Tue Aug 22, 2006 3:42 pm

Post by telly1 »

[quote="nelsona"]It is significant that he lost you the $1900.

I am convinced you are dealing with the worst case in your "preparer": too little knowledge and too much laziness.

You have used proforma in the past. Use nanic's suggestion and do your own. You can fix this.
And then request a full refund from the idiot you dealt with.

I'd ask you to put his name here, but this is not my website.[/quote]

Ha! I won't name names but the "he" is a "she".

I'm not sure what you mean by the $1900? I calculated my child tax credit to only be worth $100. She did not include a tax credit (or child care expense credit) at all.

I've already sent in my US taxes. Do I have to wait for a response from the IRS before I can send in an amendment?

Thanks for the software suggestions. I may still do the Canadian taxes this year & not pay the tax preparer.
nelsona
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Post by nelsona »

IRS never sends a response, so don't wait for that. Wait for either your check to clear or your refund to be deposited.

Why would you only be entitled to $100 for your kids. Its $1000/per. you would have had to make a very low wage to only be entitled to $100.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
telly1
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Joined: Tue Aug 22, 2006 3:42 pm

Post by telly1 »

Yes sorry, I meant wait for my cheque to clear. :)

I used the child tax credit worksheet - line 48 on 1040NR instructions & came up with $100. My income (line 37) was around $93k. I'll double check it tonight? Are you saying it's a straight $1000 per child, even when filing NR?
nelsona
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Location: Nowhere, man

Post by nelsona »

You *should* be able to get whatever you don't get from child tax credit, by claiming the additional child tax credit.

In any event, even if she forgot "only $100" that probably means that your taxes weren't done correctly.

Now, she may have felt that saving money on 104NR would only increase your Cdn taxes. But thts is not always the case, especially if your spouse doesn't work or is low income.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Post by nelsona »

Of course, if she filed a 1040NR on which she only put your US wages, then I hope she would have just thrown that in for free for doing your Cdn taxes.

That was a no-brainer.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
telly1
Posts: 98
Joined: Tue Aug 22, 2006 3:42 pm

Post by telly1 »

[quote="nelsona"]You *should* be able to get whatever you don't get from child tax credit, by claiming the additional child tax credit.

In any event, even if she forgot "only $100" that probably means that your taxes weren't done correctly.

Now, she may have felt that saving money on 104NR would only increase your Cdn taxes. But thts is not always the case, especially if your spouse doesn't work or is low income.[/quote]

Well...I had originally gone to her in early February to determine how much I (we) needed to contribute to our RRSP's and explained that we had money set aside to make contributions so that shouldn't have been a concern to her. I won't go into too much detail but she even messed that up.

I had roughly calculated what my husband would need to contribute & she gave me a figure about $1500 less. Turns out my rough calculation was about right. We needed my husband to be the lower income earner (we're very close) to deduct child care expenses from his income ($14k) as I generally have too much foreign tax credit to make it work for me. AFTER the RRSP deadline, she showed me the returns which gave me the $14k deduction (pointless) even though I had unused foreign tax credit. So yeah, that's why I'm back here trying to re-learn this stuff. I got hosed. Big time.
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