Returning to Canada, Dual-Status and TFSA questions

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flyingmonkey
Posts: 28
Joined: Tue Mar 07, 2017 11:51 am

Returning to Canada, Dual-Status and TFSA questions

Post by flyingmonkey »

I just moved back to Canada after residing in the US for over a year on a TN visa. I was a resident of the US for Jan.-Mar. 2018 getting US sourced income, and now I am a resident of Canada getting CAN sourced income.

I know that when I file for 2018 in the US I have the choice of filing a full year 1040, or as a dual status: 1040 up until day I left and 1040NR for the remainder of the year. I was originally intending on filing a full year 1040 as filing dual-status means you lose the standard deduction.

Since I've returned I've opened up several new Canadian accounts and they have all asked me whether I am a US person for tax purposes. So far I have told them no, but I realized that maybe I should be saying yes. My questions are:

1) If I plan on filing a full year 1040 next year, should I be telling the banks/brokerage I am still a US person for tax purposes? (I think the answer is yes) On the contrary, if I file as dual status, do I tell them I am not a US person? (again, I think the answer is yes)
2) If I file a full year 1040, will I have to go through the pain of reporting my TFSA to the US and have them tax it? (I think the answer is yes)
3) Are there any other advantages to filing a full year 1040 beyond keeping the standard deduction?

If my assumptions are correct, it seems like filing a full year 1040 is a huge pain in the ***, a full year 1040NR would be much "cleaner". My concern is that the extra complexities involved in filing a full year 1040 may necessitate hiring an accountant, negating the financial benefits of being able to claim the standard deduction.
flyingmonkey
Posts: 28
Joined: Tue Mar 07, 2017 11:51 am

Post by flyingmonkey »

I had edited my post and left something out: one of the accounts I opened since returning is a TFSA.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

If you are single it is not much of an advantage. Of course now that the standard deduction os so lagre, dual status is a worse than usual choice. you will have to decide at year-end.

I always advise those returning to Canada to avoid doing IRS-contrary things until the end of that transition year, like opening TFSA, and selling gaining positions, so that the full-year option remains a viable choice.

You are not a US person, since you are neither a Green card holder, nor a citizen, and do not live in US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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