I left Canada mid 2003 to work in the US on a TN visa. My wife kept working in Canada until the first week of January 2005, but I was supporting her to pay the mortgage and other expenses.
The US accountant did file married/joint return for myself. The accountant in Canada prepared our returns, but included only my income received in the first half of 2003.
In California, the DMV did not recognize my Canadian D.L, so I had to get a new one, and kept the Can D.L which I cancelled in 2005. I have a feeling I did not do the right thing! Comments?
leaving Canada
Moderator: Mark T Serbinski CA CPA
On your 2003 Cdn return, did the accountant put a departure date?
If not, you filed a completely false return. I would nbe hammering the acct until he fixes it.
If he did put a departure date on your return, you are 'probably' OK, although the correct way of doing this would have been t report the US income, and then deduct it on line 256, as by CRA rulesm, you were not completely non-resident until Jan 2004.
It is nearly impossible for two separate accountants in Canada and US to correctly file all the reurns in a departure year.
I guarantee mistakes were made on the US one as well, since how did he handle all you foreign tax credits, foreign exclusion etc, without doing you Cdn tax as well?
<i>nelsona non grata... and non pro</i>
If not, you filed a completely false return. I would nbe hammering the acct until he fixes it.
If he did put a departure date on your return, you are 'probably' OK, although the correct way of doing this would have been t report the US income, and then deduct it on line 256, as by CRA rulesm, you were not completely non-resident until Jan 2004.
It is nearly impossible for two separate accountants in Canada and US to correctly file all the reurns in a departure year.
I guarantee mistakes were made on the US one as well, since how did he handle all you foreign tax credits, foreign exclusion etc, without doing you Cdn tax as well?
<i>nelsona non grata... and non pro</i>
I am sure he did not put the depatrture date since he did not ask me for it. In te US, the accountant told me he does not do Canadian taxes and I should contact my accountant in Canada, that's why I thought it's safe to file 2 returns for 2003.
By the way, my wife took 4 months leave without pay in addition to 4 weeks vacation and took all her sick days to join me in 2003. I think that's why, in the Us the filing was done married filing jointly. At the end of 2004, my wife resigned her job, but her last day was Jan. 5th, 2005. We own our home and a rental property that we are trying to sell right now, but can we keep our principal home for our son? He is 25 yrs of age!
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by nelsona</i>
On your 2003 Cdn return, did the accountant put a departure date?
If not, you filed a completely false return. I would nbe hammering the acct until he fixes it.
If he did put a departure date on your return, you are 'probably' OK, although the correct way of doing this would have been t report the US income, and then deduct it on line 256, as by CRA rulesm, you were not completely non-resident until Jan 2004.
It is nearly impossible for two separate accountants in Canada and US to correctly file all the reurns in a departure year.
I guarantee mistakes were made on the US one as well, since how did he handle all you foreign tax credits, foreign exclusion etc, without doing you Cdn tax as well?
<i>nelsona non grata... and non pro</i>
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
By the way, my wife took 4 months leave without pay in addition to 4 weeks vacation and took all her sick days to join me in 2003. I think that's why, in the Us the filing was done married filing jointly. At the end of 2004, my wife resigned her job, but her last day was Jan. 5th, 2005. We own our home and a rental property that we are trying to sell right now, but can we keep our principal home for our son? He is 25 yrs of age!
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by nelsona</i>
On your 2003 Cdn return, did the accountant put a departure date?
If not, you filed a completely false return. I would nbe hammering the acct until he fixes it.
If he did put a departure date on your return, you are 'probably' OK, although the correct way of doing this would have been t report the US income, and then deduct it on line 256, as by CRA rulesm, you were not completely non-resident until Jan 2004.
It is nearly impossible for two separate accountants in Canada and US to correctly file all the reurns in a departure year.
I guarantee mistakes were made on the US one as well, since how did he handle all you foreign tax credits, foreign exclusion etc, without doing you Cdn tax as well?
<i>nelsona non grata... and non pro</i>
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
How you filed in US (which was fine, as long as your wife reported all her Cdn income on the 2003 1040 that you jointly filed -- <i>please tell me he reported your wifes income or used 2555 and 8833</i>) has nothing to do with how you filed in Canada, or how many days she spent in US that year.
In fact, given that your wife lived in Canada a whole 18 months after you left, there is no way that you were a 'pure' non-resident and thus were absolutely obligated to report your US income, both in 2003 and 2004.
You could then have chosen to deduct it on line 256, but you could NOT simply fail to report it.
Even now, unless you actually sell your home to your son, you have an irrefutable residential tie, and are most definitely a 'DEEMED NON-RESIDENT", since 'renting' to your son is viewed as a non-arm's length transaction, which means you have to file all your world income in Canada -- except for Cdn rent (which will be on a 216 return) and some other Cdn incomes, like interest (which now should have NR tax withheld) -- and then deduct your US wages on line 256.
Once your US accountant refused to do your Cdn return, it was time to find another accountant. Anyone can incorrectly do an IRS and california tax return, by buying TurboTax.
Did he even look at your Cdn tax return? Did Canuck look at your US return?
I hope you have some guarantees with these guys, as they ahve really put you in jeopardy.
Yikes!?
<i>nelsona non grata... and non pro</i>
In fact, given that your wife lived in Canada a whole 18 months after you left, there is no way that you were a 'pure' non-resident and thus were absolutely obligated to report your US income, both in 2003 and 2004.
You could then have chosen to deduct it on line 256, but you could NOT simply fail to report it.
Even now, unless you actually sell your home to your son, you have an irrefutable residential tie, and are most definitely a 'DEEMED NON-RESIDENT", since 'renting' to your son is viewed as a non-arm's length transaction, which means you have to file all your world income in Canada -- except for Cdn rent (which will be on a 216 return) and some other Cdn incomes, like interest (which now should have NR tax withheld) -- and then deduct your US wages on line 256.
Once your US accountant refused to do your Cdn return, it was time to find another accountant. Anyone can incorrectly do an IRS and california tax return, by buying TurboTax.
Did he even look at your Cdn tax return? Did Canuck look at your US return?
I hope you have some guarantees with these guys, as they ahve really put you in jeopardy.
Yikes!?
<i>nelsona non grata... and non pro</i>
It's a disaster! He did not include her Cdn income on the 2003 1040, so she filed in Canada and reported her income and paid taxes in Canada. I need a good accountant, and probably an excellent lawyer to fix this mess! Both of us filed 2 returns in Ca & US for 2003. In 2004, I got my H1B visa, so I am hoping this type of visa would help establishing a NR status in Canada. We have a home and a rental property, I could not break the lease agreement with the tenants. Now the tenants are moving out, the TH is on the market.
To summerize, I need to revise our tax returns for 2003, and probably pay taxes in both countries, right?
I need also to build a strong case of NR with CRA for 2004 to avoid paying taxes to both countries. I need to sell the TH ASAP, and rent out my house to other than my son, right? You help is greatly appreciated.
I will sell my Th, and rent the house out, and have my wife
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by nelsona</i>
How you filed in US (which was fine, as long as your wife reported all her Cdn income on the 2003 1040 that you jointly filed -- <i>please tell me he reported your wifes income or used 2555 and 8833</i>) has nothing to do with how you filed in Canada, or how many days she spent in US that year.
In fact, given that your wife lived in Canada a whole 18 months after you left, there is no way that you were a 'pure' non-resident and thus were absolutely obligated to report your US income, both in 2003 and 2004.
You could then have chosen to deduct it on line 256, but you could NOT simply fail to report it.
Even now, unless you actually sell your home to your son, you have an irrefutable residential tie, and are most definitely a 'DEEMED NON-RESIDENT", since 'renting' to your son is viewed as a non-arm's length transaction, which means you have to file all your world income in Canada -- except for Cdn rent (which will be on a 216 return) and some other Cdn incomes, like interest (which now should have NR tax withheld) -- and then deduct your US wages on line 256.
Once your US accountant refused to do your Cdn return, it was time to find another accountant. Anyone can incorrectly do an IRS and california tax return, by buying TurboTax.
Did he even look at your Cdn tax return? Did Canuck look at your US return?
I hope you have some guarantees with these guys, as they ahve really put you in jeopardy.
Yikes!?
<i>nelsona non grata... and non pro</i>
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
To summerize, I need to revise our tax returns for 2003, and probably pay taxes in both countries, right?
I need also to build a strong case of NR with CRA for 2004 to avoid paying taxes to both countries. I need to sell the TH ASAP, and rent out my house to other than my son, right? You help is greatly appreciated.
I will sell my Th, and rent the house out, and have my wife
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by nelsona</i>
How you filed in US (which was fine, as long as your wife reported all her Cdn income on the 2003 1040 that you jointly filed -- <i>please tell me he reported your wifes income or used 2555 and 8833</i>) has nothing to do with how you filed in Canada, or how many days she spent in US that year.
In fact, given that your wife lived in Canada a whole 18 months after you left, there is no way that you were a 'pure' non-resident and thus were absolutely obligated to report your US income, both in 2003 and 2004.
You could then have chosen to deduct it on line 256, but you could NOT simply fail to report it.
Even now, unless you actually sell your home to your son, you have an irrefutable residential tie, and are most definitely a 'DEEMED NON-RESIDENT", since 'renting' to your son is viewed as a non-arm's length transaction, which means you have to file all your world income in Canada -- except for Cdn rent (which will be on a 216 return) and some other Cdn incomes, like interest (which now should have NR tax withheld) -- and then deduct your US wages on line 256.
Once your US accountant refused to do your Cdn return, it was time to find another accountant. Anyone can incorrectly do an IRS and california tax return, by buying TurboTax.
Did he even look at your Cdn tax return? Did Canuck look at your US return?
I hope you have some guarantees with these guys, as they ahve really put you in jeopardy.
Yikes!?
<i>nelsona non grata... and non pro</i>
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Many people, including your accountants, incorrectly think that reporting income in one place means that they don't need to report it elsewhere. This is incorrect.
Whether or not her income was or was not included somewhere doesn't change her reporting responsibilities in BOTH countries.
Having H1 does no more to establish US intent than TN did. US only cares about physical presence, and Canada really cares about ties, not presence. The two don't always mesh.
The best way to indicate non-residence is to (a) indicate a departure date on your return (you didn't) and then (B) <b>ACT LIKE A NON-RESIDENT</b>, which means having NR tax withheld on your bank interest, telling your RRSP manager that you are non-resident, monthly tax withheld on your rental income and forwarded each month to CRA (you didn't do this either), deemed disposition on your holdings when you left. The fact that you did NONE of these means that CRA will very likel ydeny any claim taht you make than you were non-resident (even deemed non-resident) until jan 2005.
Just to recap:
You have filed an incorrectly 1040 for 2003, since to file jointly you HAD TO include her WORLD income for 2003 and your Cdn income from 2003. Period. You could then exclude both yours and her Cdn wages by 2555, and/or use Foreign tax credits.
I would be seeking legal counsel here, because it is clear that your US accountant knew that you were from canada, since he refused to do your Cdn taxes, and thus knew of the requirement to report WORLD income in 2003 for both you and your wife, even if there was no W-2 for the CDn stuff.
For 2004, you need to file exactly the same way.
You have no choice now for 2003 and 2004 US taxes.
<i>nelsona non grata... and non pro</i>
Whether or not her income was or was not included somewhere doesn't change her reporting responsibilities in BOTH countries.
Having H1 does no more to establish US intent than TN did. US only cares about physical presence, and Canada really cares about ties, not presence. The two don't always mesh.
The best way to indicate non-residence is to (a) indicate a departure date on your return (you didn't) and then (B) <b>ACT LIKE A NON-RESIDENT</b>, which means having NR tax withheld on your bank interest, telling your RRSP manager that you are non-resident, monthly tax withheld on your rental income and forwarded each month to CRA (you didn't do this either), deemed disposition on your holdings when you left. The fact that you did NONE of these means that CRA will very likel ydeny any claim taht you make than you were non-resident (even deemed non-resident) until jan 2005.
Just to recap:
You have filed an incorrectly 1040 for 2003, since to file jointly you HAD TO include her WORLD income for 2003 and your Cdn income from 2003. Period. You could then exclude both yours and her Cdn wages by 2555, and/or use Foreign tax credits.
I would be seeking legal counsel here, because it is clear that your US accountant knew that you were from canada, since he refused to do your Cdn taxes, and thus knew of the requirement to report WORLD income in 2003 for both you and your wife, even if there was no W-2 for the CDn stuff.
For 2004, you need to file exactly the same way.
You have no choice now for 2003 and 2004 US taxes.
<i>nelsona non grata... and non pro</i>
Many thanks, now I understand it but unable to fix it myself! Are you suggesting I hire a lawyer or an accountant?
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by nelsona</i>
Many people, including your accountants, incorrectly think that reporting income in one place means that they don't need to report it elsewhere. This is incorrect.
Whether or not her income was or was not included somewhere doesn't change her reporting responsibilities in BOTH countries.
Having H1 does no more to establish US intent than TN did. US only cares about physical presence, and Canada really cares about ties, not presence. The two don't always mesh.
The best way to indicate non-residence is to (a) indicate a departure date on your return (you didn't) and then (B) <b>ACT LIKE A NON-RESIDENT</b>, which means having NR tax withheld on your bank interest, telling your RRSP manager that you are non-resident, monthly tax withheld on your rental income and forwarded each month to CRA (you didn't do this either), deemed disposition on your holdings when you left. The fact that you did NONE of these means that CRA will very likel ydeny any claim taht you make than you were non-resident (even deemed non-resident) until jan 2005.
Just to recap:
You have filed an incorrectly 1040 for 2003, since to file jointly you HAD TO include her WORLD income for 2003 and your Cdn income from 2003. Period. You could then exclude both yours and her Cdn wages by 2555, and/or use Foreign tax credits.
I would be seeking legal counsel here, because it is clear that your US accountant knew that you were from canada, since he refused to do your Cdn taxes, and thus knew of the requirement to report WORLD income in 2003 for both you and your wife, even if there was no W-2 for the CDn stuff.
For 2004, you need to file exactly the same way.
You have no choice now for 2003 and 2004 US taxes.
<i>nelsona non grata... and non pro</i>
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by nelsona</i>
Many people, including your accountants, incorrectly think that reporting income in one place means that they don't need to report it elsewhere. This is incorrect.
Whether or not her income was or was not included somewhere doesn't change her reporting responsibilities in BOTH countries.
Having H1 does no more to establish US intent than TN did. US only cares about physical presence, and Canada really cares about ties, not presence. The two don't always mesh.
The best way to indicate non-residence is to (a) indicate a departure date on your return (you didn't) and then (B) <b>ACT LIKE A NON-RESIDENT</b>, which means having NR tax withheld on your bank interest, telling your RRSP manager that you are non-resident, monthly tax withheld on your rental income and forwarded each month to CRA (you didn't do this either), deemed disposition on your holdings when you left. The fact that you did NONE of these means that CRA will very likel ydeny any claim taht you make than you were non-resident (even deemed non-resident) until jan 2005.
Just to recap:
You have filed an incorrectly 1040 for 2003, since to file jointly you HAD TO include her WORLD income for 2003 and your Cdn income from 2003. Period. You could then exclude both yours and her Cdn wages by 2555, and/or use Foreign tax credits.
I would be seeking legal counsel here, because it is clear that your US accountant knew that you were from canada, since he refused to do your Cdn taxes, and thus knew of the requirement to report WORLD income in 2003 for both you and your wife, even if there was no W-2 for the CDn stuff.
For 2004, you need to file exactly the same way.
You have no choice now for 2003 and 2004 US taxes.
<i>nelsona non grata... and non pro</i>
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">