Canadian working in US, living in Canada - IRS Filing Status

fit4lyf · Post by **fit4lyf** » Thu Mar 25, 2010 2:13 pm

I work in the US but live in Canada with my wife and 2 young daughters. My wife does work in Canada. What status should I be filing on my 1040? Married filing seperately and claim 3 dependants? I can file jointly right (since my wife does not earn money in the US)? Any advice would be appreciated. Thanks.

nelsona · Post by **nelsona** » Thu Mar 25, 2010 2:34 pm

As a married Cdn resident working in US, you would be most benefitted by filing an Article XXV non-discrimination return, whereby you report only your US-sourced income on a 1040, but get all the preferential tax benefits (and rate) of filing an married joint return.

I have described this in great detail in other posts.

You prepare a pro forma 1040, and use the rate you determine on that to come up with your 1040NR taxrate.

Otherwise, filing 1040 MFS, or filing regular 1040NR (which is also MFS), will usually yield a taxrate tha tis even higher than your Cdn one.

fit4lyf · Post by **fit4lyf** » Thu Mar 25, 2010 2:52 pm

Thanks for the quick reply. Let me do some searching on that in the forums here. I am very interested and was not aware of such a process before.

nelsona · Post by **nelsona** » Thu Mar 25, 2010 4:01 pm

In my above response I meant to say "you report only your US-sourced income on a 1040NR" NR is the key.