Should be an easy tax declaration

maminej · Post by **maminej** » Thu Mar 26, 2015 10:18 am

Hello everyone,

I moved to US with all my family in september 2014 on TN-visa ( TD for wife and kid).
I returned my canadian driver license, health card, closed my credit cards and bank accounts, do not have investment or house in Canada. Am I considered as Non resident for tax purposes ( canada ) ?
Looking at the US side now, I do not satisfy the 183 days presence rule, is there an exception to this rule that will allow me to file US taxes as US resident ?

Thanks in advance

JGCA · Post by **JGCA** » Mon Mar 30, 2015 2:01 pm

Under the treaty you can file a full 1040 in the US but you must declare your world income not just the prtion while you were in the US this is allowed to CND und the US Canada treaty.

nelsona · Post by **nelsona** » Mon Mar 30, 2015 2:18 pm

and you may find it sompler to just file 1040NR for this year.

Since you don't satify SPT, you have 3 choices:
1. 1040NR
2. Dual-status, filing separately
3. full year 1040, exempting Cdn wages.

I have never seen a case where #2 is better.

3 works better than 1 if you arrive any time before september. You will need to try both. the problem with #3 (and #2) is that you need to file many additional forms for the foreign accounts you may have had at beginning of 2014 but got rid of later in the year.

maminej · Post by **maminej** » Mon Mar 30, 2015 8:12 pm

HEllo

Thanks a lot for your recommendation.
Can you please tell me which way is better for the canadian declaration ?
Also, I read that TurboTax does not support 1040NR. what software do you guys recommend ?

Best regards,
AJ

nelsona · Post by **nelsona** » Mon Mar 30, 2015 10:20 pm

You don't have any choice for the Cdn declaration. You left on a certain day, which is afact, and must file with that departure date.

nelsona · Post by **nelsona** » Mon Mar 30, 2015 10:21 pm

Taxact.

maminej · Post by **maminej** » Tue Mar 31, 2015 11:25 pm

[quote="nelsona"]You don't have any choice for the Cdn declaration. You left on a certain day, which is afact, and must file with that departure date.[/quote]

Hi,

Thanks again for the reply.
Just to confirm the proper way of filing Canadian declaration. I should file as resident and declare my US revenue as foreign revenu and claim a foreign tax credit, is that correct ?

Best regards,
AJ

nelsona · Post by **nelsona** » Wed Apr 01, 2015 12:11 am

No. You LEFT Canada. You are an emigrant for tax purposes, with a departure date Please read the CRA emigrants guide.

maminej · Post by **maminej** » Sat Apr 04, 2015 9:49 pm

Hello,

Another question..

I am filing dual status, currently working on the 1040NR for the non resident period.
Should I report my Canadian income in this form ? ( as foreign income ). I have a T4 for wages I earned in 2014 up to Aug. 31st.

maminej · Post by **maminej** » Sat Apr 04, 2015 10:07 pm

I was reading the 1040NR instructions and found the answer to my previous question:

"Income that is not effectively connected with a trade or business in the United States for the period of nonresidence is subject to the flat 30% rate or lower treaty rate. No deductions are allowed against this income."

Should I report my candian wages under section L "Income Exempt from Tax" of the schedule OI ?

maminej · Post by **maminej** » Sat Apr 04, 2015 10:14 pm

I think I got confused on this...
I think the "Income that is not effectively connected with a trade or business" is the income that's earned while one lives in the US but not connected with US trade to business.

In this case, my T4 should not go there...

I still can't figure where or if I should report my canadian wages I earned before moving to US.

I would appreciate your help !!

Thanks

nelsona · Post by **nelsona** » Sun Apr 05, 2015 9:56 am

You don't report ANY foreign income on a 1040NR.

maminej · Post by **maminej** » Sun Apr 05, 2015 12:04 pm

Thanks a lot Nelson,
Your comments were very helpful. I think I am done with my federal declaration.

I prepared a 1040NR with zero income as I don't have any us connected income during my non resident period. I will use this form as as the dual-status statement.

I prepared a 1040 reprting my US wages.
Please find below the federal tax summary as I need your input on one more thing:

[IMG]http://i61.tinypic.com/x6n8cp.png[/IMG]
a- I am married but filing separately as per the "Restrictions for Filing Dual-Status Tax Returns"
b- My wife and daughter don't have SSN or ITINs. I am filing W-7s for both of them with my return.
c- I did not add my wife and daughter as dependent in taxact
d- My son was born in US after we moved in 2014, he does have a SSN. I added him as dependent therefore the program added his exemption portion
e- the program added a 1000$ child tax credit for my son.

I read somewhere that exemptions are not prorated per the number of days of residency.
Please take a loot at the attached summary and let me know what do you think about the assumptions I listed ( a to e )

Thanks