Serbinski Accounting Firms

Should have included a third option
(c) CA FTC of $150 (US tax on US source) leaves CA tax (after credits) of $400 - $150 = $250, for US FTC carry forward of $250 - $150 = $100

US citizen in Canada. On Form 1116 Part II "Foreign Taxes Paid or Accrued", can I include the entire CA tax liability, or only that which is in respect of CA source income? Example: - $1000 US source, $1000 CA source income, all general category and taxable to both countries - CA taxes bot...

The withholding is correct. Form 8959 is not 0, it computes the tax and withholding separately and adds them to 1040 lines 15 and 16 as I previously explained. The final result (refund / balance due) is the same as if 8959 were not filed, but the line 15 total tax is different.

That's not what the instructions say.

"You must file Form 8959 if one or more of the following applies to you.
• Your Medicare wages and tips on any single Form W-2 (box 5) are greater than $200,000
• ..."

8959 is filed even if the withholding is correct. The tax is added to 1040 line 15 total tax and the withholding (usually the same) is included in line 16 along with the regular W2 withholding. There is also 8960 which is the NIIT. This is only on investment income and not wages. I believe both of t...

The regular US federal tax is assessed on both US and CA source wages, but SS and medicare (base + 8959) are only on US source wages. I'm not sure it makes sense to treat SS/medicare amounts as if they were paid evenly over all wages.

So would you subtract it out from the W2 medicare withholding and have a separate allocation of only the 1.45% base?

... plus California :)

Makes sense. All the US-source earned income is subject to SS/medicare withholding. 8959 is included in 1040 line 15 total tax but my proposal is to account separately for medicare and SS with proportional allocations for each type of tax, thus: Fed tax rate = (QDCG wks line 24) / (AGI minus QDCG wk...

US citizen, moved to Canada, claiming FTC on CA return for US tax on US-source CA-taxable earned income (stock vesting from pre-move grants). I understand that for T2209 line 431 foreign tax paid I report US tax allocable to the line 433 income at an effective rate. Do I need to compute this effecti...

Would US citizen in Canada with eligible dividends report actual amount (T5 box 24) as US taxable, or the gross-up amount (T5 box 25)?

Actual amount seems more likely to me but wanted to make sure. And I assume the dividend tax credit in box 26 just reduces Canadian tax creditable on 1116.

Does a designated Roth account in a 401k plan require a one-time election under article XVIII paragraph 7 to defer taxation on earnings accrued but not distributed? US citizen, first year residing in Canada. If I understand correctly, showing that the Roth 401k is a "pension" under XVIII(3...

Ok makes sense. Thanks a lot :)

Thanks. I just found the guidance in publication 514 that supports this. But it has an interesting exception: "U.S. citizens and resident aliens with a foreign tax home will be treated as nonresidents for a sale of personal property only if an income tax of at least 10% of the gain on the sale ...

For a US citizen living in Canada, what determines the country source of capital gains for the purpose of foreign tax credits? If I sell shares of a US company through a Canadian brokerage, is that US-source gain or Canada-source gain? (Is the answer the same for US taxes and Canadian taxes?) Thanks!