Canadian working in US, need file both US and Canada income tax return

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Fan8899
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Canadian working in US, need file both US and Canada income tax return

Post by Fan8899 » Fri Dec 28, 2018 8:38 pm

Hi. I am Canadian citizen starting working in US in Feb this year at TN, family members are still in Canada. so I should need file both US and Canada income tax return. I have employment income from US. very small rental house income from Canada. I have a few questions and would appreciate any help.

1. I think I need file my US income tax first, do I need include my Canada rental income?
2. I still have some unused Canada RRSP contribution room. If I make contribution to Canada RRSP in Jan. 2019, will it be deductible to my 2018 US
income when filing Canada income tax return? I do not think I need report my RRSP contribution when filing my US income tax return.

Thanks for any help

Fan8899
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Re: Canadian working in US, need file both US and Canada income tax return

Post by Fan8899 » Sat Dec 29, 2018 1:40 pm

To add more details. MY wife and kids are still living in Canada. My wife have very small amount employment income in Canada in 2018. They do not apply TD. Only I have TN working in US. I chose single for US tax election at beginning of work. I am not sure if I can choose married and joint when filing my US tax return, because my wife is not living in US.
I may still file US income tax as single, as my total income tax is determined by Canada tax return anyway, no matter how I file my US tax return.
I would prefer to not report my Canada rental income when I file my US tax return.
My biggest question is Canada RRSP contribution. I am not sure if it will help me to pay less Canada income tax. because I have very little Canada income in 2018, most income are from US employer. I will receive W2. Any help is appreciated.

nelsona
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Re: Canadian working in US, need file both US and Canada income tax return

Post by nelsona » Sat Dec 29, 2018 8:35 pm

You cannot file single, regardless of how you filled out W-4, which is simply an estimate of your withholding. You can either file M filing separately or jointly. Most find jointly to work best, even though you must report word income, because you get better tax rate and deductions, and can exempt spouses Cdn wages, and get credit for Cdn tax.

If you moved, worked and did not return regularly to Canada, you should not have to report US income on your CDn return: you have left Canada and are a deemed non-resident.

We have dealt with first year taxes in many posts, please search.
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Fan8899
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Re: Canadian working in US, need file both US and Canada income tax return

Post by Fan8899 » Sat Dec 29, 2018 10:17 pm

Thank you nelsona, your answer is excellent and quite surprise to me. I always thought because I have Significant residential ties to Canada, i.e my wife and kids in Canada, home in Canada, so I should be treated as resident of Canada when file Canada tax return. Your answer opened my eye.
I have moved, worked in US and did not return regularly to Canada, so I may be tread as a deemed non-resident of Canada. based on below clause from CRA:
"If you established ties in a country that Canada has a tax treaty with and you are considered a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada, you may be considered a deemed non-resident of Canada. The same rules apply to deemed non-residents as non-residents of Canada."

Do you think I would better to confirm it with CRA before I file US/Canada tax return? Because some tax experts in Canada told me I can not be non-resident of Canada since my wife and kids are still in Canada. They suggest me that I should file US tax return as non-resident, file Canada tax return as resident. I personally would prefer to file Canada tax return as a deemed non-resident of Canada. I do not mind to report my global income to US.

nelsona
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Re: Canadian working in US, need file both US and Canada income tax return

Post by nelsona » Sat Dec 29, 2018 11:28 pm

The tax experts are correct IF you are visiting your family in Canada after you left. But if you strictly have stayed in US, you are deemed non-resident. It would not be "wrong" to file a 1040NR and remain Cdn resident. It really is upto you how your total taxes would come out.

But, as a non-resident of Canada you would have issues about how you report your Cdn rental income and such.

Is your family planning to move south, or not. If they are, I would be claiming deemed non-resident status from the day YOU left. But if they are never coming to live with you, then just file as a resident of Canada, non-resident of US.

I would not bother confirming with CRA. They will ALWAYS say over the phone that you are resident of Canada. It is better if YOU make the decision, and then they can try to prove otherwise if they wish (they won't).
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

Fan8899
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Re: Canadian working in US, need file both US and Canada income tax return

Post by Fan8899 » Sun Dec 30, 2018 12:25 am

I visit my family in Canada occasionally, not regularly. My wife plan to come to US in 2021, after all my kids turns 18 and above and can take care themselves.
I agree with you that do not confirm it with CRA. I read CRA web site, it is grey area if I can be considered as deemed Non-resident of Canada for 2018.
I do not quite worry about my Canada rental income when file US tax as US resident, because this year mortgage rate is much higher in Canada. I may only have negative rental income. Can I not report my Canada rental income to US if that income is negative?
Thanks, It is very good conversation.

Fan8899
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Re: Canadian working in US, need file both US and Canada income tax return

Post by Fan8899 » Sun Dec 30, 2018 1:00 pm

A few more questions. My wife and kids do not have ITIN. Do they need apply ITIN before I file US tax return as resident alien? They all carry Canada passports, no TD. I have SSN and TN.
If I file Canada tax return as a deemed non-resident, should I file Canada tax return first, then file US tax return?

nelsona
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Re: Canadian working in US, need file both US and Canada income tax return

Post by nelsona » Mon Dec 31, 2018 12:07 pm

You would apply for ITIN at the time you file your return, with your return. Form W-7.

Your rental income MUST be reported. Then it is also upto you to report rental expenses, to reduce your income. In US you also have to depreciate rental property

Non-residents of Canada have special reporting requirements for rental income. Section 216 for example.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

nelsona
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Re: Canadian working in US, need file both US and Canada income tax return

Post by nelsona » Mon Dec 31, 2018 12:08 pm

Please do a little more research on the requirements of non-residency and emigration, then come back and ask more specific questions.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

Fan8899
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Re: Canadian working in US, need file both US and Canada income tax return

Post by Fan8899 » Tue Jan 01, 2019 11:29 am

First, Happy New year to everybody! I am trying to do more research by myself, but find it very difficult to do a search from this web site, no matter what key words I am using, I can not get the result. Can anybody help me on any suggestion of searching this forum? Thanks

Bubba Gums
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Re: Canadian working in US, need file both US and Canada income tax return

Post by Bubba Gums » Tue Jan 01, 2019 1:31 pm

I recommend using google to search the site. The search function doesn't work near as well. Just add

site:forums.serbinski.com

After your search terms at google.

nelsona
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Re: Canadian working in US, need file both US and Canada income tax return

Post by nelsona » Tue Jan 01, 2019 2:22 pm

and I was referring more to the CRA site, which has a good set of requirements for emigrants and non-residents.
Thanks for the search tip Bubba, this site's search feature has never been great,
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

Fan8899
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Re: Canadian working in US, need file both US and Canada income tax return

Post by Fan8899 » Thu Jan 17, 2019 9:09 pm

Thanks above, I did many research after new year. Now I am not sure if I should apply ITIN for my wife and kids right now, or wait until I file my US income tax, together with W7. I have heard it takes 7 weeks to get ITIN. If wait until March to do US tax file and ITIN application on the same time. I may not get IRS tax file processed by the end of April, then it will delay my Canada tax file, which has end of April deadline.
This may relate to another question, do I have to wait to get IRS response to my US tax file before I file my Canada income tax?
Thanks for any help.

nelsona
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Re: Canadian working in US, need file both US and Canada income tax return

Post by nelsona » Fri Jan 18, 2019 6:16 am

One can only apply for ITIN when filing the tax return. The W-7 is sent wit the return.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

nelsona
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Re: Canadian working in US, need file both US and Canada income tax return

Post by nelsona » Fri Jan 18, 2019 6:19 am

You file both returns when they are complete. not waiting for any answer from Govt. If there is changes later due to errors or assessments, that affect the other returns, you simply amend the return(s).
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

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