Double Taxation if Filing Jointly

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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adw
Posts: 7
Joined: Wed Feb 06, 2019 12:04 am

Double Taxation if Filing Jointly

Post by adw » Wed Feb 06, 2019 12:14 am

Thank you for such an informative forum/website.

I am a Canadian citizen and married my US-citizen wife in November 2018. We both earn money in our respective countries with no income in the other. I am self-employed and she works for an employer.

When she files her tax returns for 2018, we have to decide whether to file separately or jointly. As I understand it, if we file jointly, then I am being treated as a US resident for tax purposes in 2018. On your website re: Double Taxation, it reads "Under certain circumstances, such as where a part year resident of the U.S. elects to be taxed as a U.S. resident for the entire year, Treaty protection is not available." Does this mean that I will not be protected against double taxation if we elect to file jointly?

If we file separately, and with the recent change in personal exemption, is there any need to obtain an ITIN?

Thank you again for such a great forum!

adw
Posts: 7
Joined: Wed Feb 06, 2019 12:04 am

Re: Double Taxation if Filing Jointly

Post by adw » Wed Feb 06, 2019 1:50 am

Actually, I just read this and I think this answers my question. Thanks!

viewtopic.php?f=2&t=9497

nelsona
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Location: Nowhere, man

Re: Double Taxation if Filing Jointly

Post by nelsona » Wed Feb 06, 2019 12:08 pm

Your income would be protected from double taxation, either by using tax credits, and/or, more likely, excluding the wages by form 2555.

She will benefit from the lower MFJ taxrate, and your Cdn income will not be taxed.

Be careful though, by filing jointly, you become liable for the reporting of all your foreign assets, TFSA income trusts, PFICs, etc. Which can be such a headache that many avoid at all costs filing with their US-spouse.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

adw
Posts: 7
Joined: Wed Feb 06, 2019 12:04 am

Re: Double Taxation if Filing Jointly

Post by adw » Wed Feb 06, 2019 2:05 pm

Before 2018, anticipating this, I put all my money in a savings account and various checking accounts. I never incorporated.

When you mean foreign assets, do you mean just reporting the savings/checking accounts? Does life insurance have to be reported?

Thanks again!

nelsona
Posts: 15948
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Double Taxation if Filing Jointly

Post by nelsona » Wed Feb 06, 2019 5:19 pm

Any foreign assets are subject to foreign reporting rules. Your financials don't appear to be too complicated, so I don't anticipate a problem. Just wanted you to know that US income taxation is often the least of one's worries when involving oneself with IRS as a foreigner..
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

adw
Posts: 7
Joined: Wed Feb 06, 2019 12:04 am

Re: Double Taxation if Filing Jointly

Post by adw » Wed Feb 06, 2019 9:07 pm

Thanks! Appreciate the heads up!

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