PR of Canada on H1 and Taxes

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.

Moderator: Mark T Serbinski CA CPA

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Comb
Posts: 4
Joined: Wed Mar 02, 2005 9:52 am

PR of Canada on H1 and Taxes

Post by Comb »

Hi
My wife is a PR but for last 6 months she is in states on H1 she had worked in canada for first two months in year 2004 and then July- Dec in states ,I am living in canada with kids. So what and how she should go for her taxes..?
Her income in canada for 2004 was 4000
Her us income is 20400.
Any suggestions
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Because YOU live in Canada, she lives in Canada.

So she has to report ALL income to Canada.

She ALSO has to report all US income to IRS. She can choose to do this as a non-resident (for 1040NR) or can choose to file a 1040, but would need to include all her income for the year.

She can file a 1040NR even if she meets the Substantial presence test, because by treaty she is a Cdn resident.


Her goal in US taxes is only to reduce it below her Cdn tax rate, so that she can calim all the US tax (including any SS or Medicare tax) as a FULL credit on her Cdn tax.


There are other posts here which describe the various options available in the 'first year' of US taxes.


<i>nelsona non grata</i>
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