Unclear how to file in US/CAN and how canada will deem us

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nelsona
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Post by nelsona »

Indeed. Filing for an extension is optional, if you don't owe anything -- and doesn't help if you do owe unless accompanied by a check, but correct.

That is what was meant by "have to wait to file until that period is up, sometime this summer"
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gordito
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Joined: Thu Apr 09, 2015 2:37 pm

Re: Unclear how to file in US/CAN and how canada will deem us

Post by gordito »

Thank you so much for your help. The 330 days are not upon us so I went back to taxact to file things. I started by entering US income for both of us and then added the 2555 for my spouse and entered the same amount (~25k USD converted from CAD) into the 1040FEC. We claimed 225 days out of the country in 2017 but that made the taxes go from us getting money back to having to pay. Is this expected?

Regarding my side, do I need a 2555 ? I moved to Canada Aug 2017 but I was actually paid as if I was living in the US until the end of 2017. Maybe that was not fully legal? Company said it should be ok for a few months which we did until the end of 2017.
gordito
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Re: Unclear how to file in US/CAN and how canada will deem us

Post by gordito »

I meant to say are upon us, we are now over 330 days :)
nelsona
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Re: Unclear how to file in US/CAN and how canada will deem us

Post by nelsona »

I can’t answer about how you are entering info.
However even if you werepaid by US firm as if you lived in US, you still can use 2555 if you otherwise qualify.
You might run into issues for the state tax though if your employer continued to withhold for the state you were living in before
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gordito
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Joined: Thu Apr 09, 2015 2:37 pm

Re: Unclear how to file in US/CAN and how canada will deem us

Post by gordito »

nelsona wrote:
> I can’t answer about how you are entering info.
> However even if you werepaid by US firm as if you lived in US, you still
> can use 2555 if you otherwise qualify.
> You might run into issues for the state tax though if your employer
> continued to withhold for the state you were living in before

hi, yes, they continued to withhold this as if I was living in the state is why I sort think I should not pursue this path. I also wondered how I should split my W2 income that I would add to the form 2555. Would I split by 12 to get a monthly income and multiply that by the # months after I left the country? Then I would add this exclusion to the 1040? Doesn't seem right :(
nelsona
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Re: Unclear how to file in US/CAN and how canada will deem us

Post by nelsona »

That would be correct
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gordito
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Re:

Post by gordito »

nelsona wrote:
> Indeed. Filing for an extension is optional, if you don't owe anything --
> and doesn't help if you do owe unless accompanied by a check, but correct.
>
> That is what was meant by "have to wait to file until that period is
> up, sometime this summer"

So I did not file for an extension as I thought it was optional and now I was assessed a late charge fee, entitled. "Failure-to-file penalty", "Failure-to-pay proper estimated tax penalty", "Failure-to-pay penalty" and some interest charges. The hilarious part is that it arrived at my house on Sept 28 and it was due on the 17th. Do I have a fighting change of this getting waived if I give them a call? It took them a month to get to me by letter as the notice date on aug 27th.
nelsona
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Re: Unclear how to file in US/CAN and how canada will deem us

Post by nelsona »

It is optional if you owe no taxes, if you owe taxes, filing an extension doesn't help you avoid late fees and penalties.
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nelsona
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Re: Unclear how to file in US/CAN and how canada will deem us

Post by nelsona »

Just to clarify, filing extension is unnecessary if you do not owe money.
and it doesn't help you if you do owe money (unless you send money with the extension),

Question: How does IRS know you owe money if you haven't filed yet?
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gordito
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Re: Unclear how to file in US/CAN and how canada will deem us

Post by gordito »

nelsona wrote:
> Just to clarify, filing extension is unnecessary if you do not owe money.
> and it doesn't help you if you do owe money (unless you send money with the
> extension),
>
> Question: How does IRS know you owe money if you haven't filed yet?

I have filed! And I got money back from both federal and state into my bank account. The "table" they sent me shows that I overpaid $10? It's strange. I got money back, so I definitely did not owe IRS any money, this is why I was not worried about filing late. But now this shows up.. I will give them a call but I just wanted to make sure it was ok to file late if I waited for the time to pass for the 2555.
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