Questions on income earned both US & Canada

santijs · Post by **santijs** » Tue Mar 01, 2005 1:34 am

Hey folks,

My work timeline (I'm a US Citizen-fulltime student residing & studying in GA)

01/2004-05/2004 C$10k (US$7.7k) Worked in BC on a Traineeship
06/2004-12/2004 $10k Worked in Atlanta

Q's about Canadian Taxes:

1. For my Canadian filing, would I only have to report my canadian wages, for a total income of C$10k, since I did not earn any foreign income during my residency in BC (as stated in the emigrant guide)?

2. When can I expect my W4's from BC - Mid-March (i realize that they are supposed to be mailed out end of Feb)?

3. For my Canadian filing, can I recieve the GST/HST Credit? Any other deductions y'all could recommend to me?

Q's about American Taxes:
1. What would be the best way to go about reporting my canadian income to the us, and what forms should I use?

2. Are there any deductions which I could tag on to this, like for example FEIE (am I bona fide?) or deductions?

3. Any final tips for this whole process, possibly specific to my situation?

Thanks,
Santi

nelsona · Post by **nelsona** » Tue Mar 01, 2005 10:26 am

Since you only were in Canada less than six months, and you continued to maintain your residence in US, you *may* be entitled to avoid Cdn tax on your Cdn wages altogether IF the wage total was less than $10K canadian.

Otherwise, you will file a non-resident return for the wages, paying federal and BC tax on that income.

You are not entitled to gst credit obviously: this is for Cdn residents.

(Forget the emigrant guide, that is forpeople who lived in Canada and then left, you should be focussing on the non-resident guide).

Your US tax return will be the same as in other years, the BC job will be no different than your GA job.

You will be able to take credit for any EI premiums you paid in Canada as a foreign tax, as well as anty Fed/BC tax you eventually pay. This would be done on a 1116 form included with your return.

You are not entitled to FEIE.

So the important thing will be to see what your T4 wages are.

As to when you will get this form, it should be about no. Does your BC employer know where you live now?

nelsona non grata

nelsona · Post by **nelsona** » Tue Mar 01, 2005 10:29 am

... and just an aside on your 'traineeship'.

If your traineeship was paid by a US entity, it is exempt from Cdn tax altogether regardless if it was more or less than $10K.

This is due to you being classified a student.

nelsona non grata

santijs · Post by **santijs** » Wed Mar 02, 2005 1:25 pm

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Originally posted by nelsona

Since you only were in Canada less than six months, and you continued to maintain your residence in US, you *may* be entitled to avoid Cdn tax on your Cdn wages altogether IF the wage total was less than $10K canadian.

Otherwise, you will file a non-resident return for the wages, paying federal and BC tax on that income. <hr height="1" noshade id="quote"></blockquote id="quote">

I finally found my figures: I earned approximately $11.1k, and payed 15% tax. Does this mean I actually OWE taxes to Canada?

<blockquote id="quote">quote:<hr height="1" noshade id="quote">(Forget the emigrant guide, that is forpeople who lived in Canada and then left, you should be focussing on the non-resident guide).

Your US tax return will be the same as in other years, the BC job will be no different than your GA job.

You will be able to take credit for any EI premiums you paid in Canada as a foreign tax, as well as anty Fed/BC tax you eventually pay. This would be done on a 1116 form included with your return.

You are not entitled to FEIE.

So the important thing will be to see what your T4 wages are.<hr height="1" noshade id="quote"></blockquote id="quote">

I think I found a copy of my forms, a T4A-NR. This is rather confusing, because I called the International Tax Services office, who was telling me that I didn't earn employment income, but rather self employment income...

Any help with this? I'm getting rather overwhelmed looking at all the different T1 and schedule forms...

nelsona · Post by **nelsona** » Wed Mar 02, 2005 5:40 pm

You will have to file a Cdn tax return. Since your only income is from employement in BC, you will file a BC residents T1. However you will have special rules to calculate your personal credits. See T4058 Non-Residents and Income Tax for these special rules.

Your withholding should be about right for your income. Who knows, you may get a refund.

You are not self-employed. Your T4 proves this. CRA swizzle servants are no more proficient than IRS or USCIS flunkies at handling phone calls.

Once you determine your final Cdn tax, you will reporet this income on your 1040 be able to claim that tax as well as any EI premiums you paid as a foreign tax credit on your 1116 form (general limitation).

nelsona non grata

santijs · Post by **santijs** » Fri Apr 08, 2005 10:43 pm

Nelsona,

Final questions, I swear [:D]

I followed these steps, as you stated.

1. Started filling out my t1 form for BC
2. Looking over T4058, I found my only deduction was on line 437 (total income tax deducted from all slips)
3. I filled out the BC Schedule 1 of my form, where I found my total payable (16% of my gross income minus my only credit, the basic personal amount).
4. All said and done, it seems that I am being refunded approximately 65% back of the original 15% total tax withheld (ie C$1100 from C$1675)

Three questions:
1. the bc T1 form doesn't seem made for ppl living outside of Canada; should I proceed all the same, and just affix a new address label and such?
2. in BC's Schedule 1, am I allowed to claim $8,102 as my basic personal amount (federal tax credit), even as a non-resident?
3. Does such a large return seem odd, granted my situation?

Thanks for all your help - I couldn't have done it without you!
Santi