How to file? TN+F1

Nicko · Post by **Nicko** » Mon Oct 30, 2006 11:00 pm

Dear colleagues, please advise. I am Canadian citizen on TN in US, I am non-resident of Canada for tax purposes, my fiancee is a university student, she is on F-1 visa and so considered to be non-resident of US for tax purposes.
I pay her education and other expenses, certainly we live at the same address, and I would like to report her educational fees as my expenses. How can I do it?
Can we file jointly somehow similar to Canadian "common law"? If not then can she transfer (similar to the procedure in Canada) her educational expenses to the next year when we marry?
Thank you!!

nelsona · Post by **nelsona** » Tue Oct 31, 2006 10:35 am

Until you marry, she is nothing to you tax-wise in the US.

Once you marry, she can be treated as any other US resident spouse, and you will likely want to file jointly at that point.

Given this, you may wish to marry before Jan 01, 2007, to take advantage of tax breaks -- if any -- this year.

Nicko · Post by **Nicko** » Tue Oct 31, 2006 5:30 pm

Thank you very much Nelson for so quick reply. Can you tell me please, can she transfer her education expenses to the next year in US , like in Canada where a student has such an option.
And one more question, last year she filed as 'single' in Canada. What is the best option for her to file in Canada this year, 'single' or 'common law'?
Again thanks a lot!!

nelsona · Post by **nelsona** » Tue Oct 31, 2006 6:18 pm

Since you will file jointly, her expenses will be the couple's expenses.

For canada, it makes no difference to her, although if you are common law, then she cannot file without at least reporting your income. Also, her being in canada and filing 'married' could make you taxable there too, so be careful.

Nicko · Post by **Nicko** » Wed Nov 01, 2006 2:57 pm

nelsona wrote:For canada, it makes no difference to her, although if you are common law, then she cannot file without at least reporting your income.

Hmm, when we are in common law or married , does she have to report my All income or Canadian-only which is zero in my case??

nelsona wrote: Also, her being in canada and filing 'married' could make you taxable there too, so be careful.

Nelson, I've scrolled your messages on this forum where you say that marriage with Canadian resident does not affect your non-resident status if ties with US are stronger (let me know if I understood incorrectly). Is there anything else in my case to be careful??
Thanks,
N.

nelsona · Post by **nelsona** » Wed Nov 01, 2006 4:34 pm

when we are in common law or married , does she have to report my All income or Canadian-only which is zero in my case??

She must report your world income, but only if she is trying to claim spousal crdits or GST or CCTB rebates.

If she doesn't lcim any of these then she doesn't have to report your income (it's just that most tax s/w will automatically assume that if no income is reported for you, then you had no income, which may incorrectly get her some benefit to which she is not entitled).

marriage with Canadian resident does not affect your non-resident status if ties with US are stronger (let me know if I understood incorrectly).

That is correct. That is why I say 'could'. I have no idea what your other ties in Canada are, nor do I wish to know. The fact that she also is physically in US helps your case.

Nicko · Post by **Nicko** » Thu Nov 02, 2006 12:18 pm

Nelson, do you know if educational expenses could be carried over to the next year? In Canada a student can carryover them from year to year until he starts getting income. or transfer them to his parents or grandparents. Are there any rules in states? I understand she will be filing 1040NR.
Thanks
N.

nelsona · Post by **nelsona** » Thu Nov 02, 2006 12:25 pm

No. Expenses cannot be carried forward in US.

Even in canada, they can only be carried forward by the individual not the parents, etc.

Looks like you will have to tie the knot in 2006 for these to be of benefit to you in 2006.

Nicko · Post by **Nicko** » Thu Nov 09, 2006 11:19 am

Nelson, she moved to US from Canada in early September as F-1 student , and before moving she had summer job in Canada and will be paying taxes in Canada.
What is better for us to file if we marry this year?
One more questino, Nelson, she has only student number, doesn't have tax number and not eligible for SSN. Does she have to apply for ITIN filing W7 some time before filing income tax?

nelsona · Post by **nelsona** » Thu Nov 09, 2006 1:51 pm

What is better for us to file if we marry this year?

If you marry this year , then filing jointly in US becomes a possibility (she would still have to file in Canada), and her expenses become your expenses, and your overall taxrate will likely go down.

As to ITIN, she will submit the W-7 withher first US return (or with your joint one if you marry this year), and they will issue her ITIN at that time.