Do I need to pay tax to Canada?

dempseyedgewater · Post by **dempseyedgewater** » Tue Jan 23, 2007 1:06 pm

I am new to this forum. If there is already an answer to my question, my apologies. I am a canadian living/working in US. I have a house in canada and a girlfriend living in canada. last year, my accountant told me if i just have a house in canada but without any other ties, I don't have to pay income tax to canada. This year i plan to get married. but probably will be stuck in the states for the rest of the year (my wife will then continue to live in canada). My question is: do i need to pay both US and Canadian tax? thx in advance.

nelsona · Post by **nelsona** » Tue Jan 23, 2007 1:39 pm

The fact that you have already 'broken' ties to canada (although a house to which you have access is generally a sufficient tie to at least keep CRA 'intersted' in you), you are probably fine not having to pay taxes in Canad on your US income.

Thta said, I would be making sure that I hvae STRONG ties in US (p[referably a house), and very little other ties in canada (one bank account, no credit cards, no other memberships) in order to butress any claim that your center of vital intersts is in the US.

Your wife will of course continue to file in canada (and can join you in a joint 1040 even if she lives in Canada t oreduce your taxrate). This will raise questions about whay a married woman's husband is not filing a tax return. Of course, CRA may already view you two as 'common law' depending on how you have reported in the past, in which case your accountants previous assessmnet may have been faulty.

But, unless you then wife is making concrete plans to join you in US, CRA would likely take the position that you are merely commuting to work in US, and thus remain (or in your case, resume) being taxable in Canada on your world income.

dempseyedgewater · Post by **dempseyedgewater** » Tue Jan 23, 2007 3:15 pm

many thanks, nelsona. may i ask a few followup questions?

(1) Once my girlfirend and i get married and she does move down to join me in the states, does she need to cut her tie to canada as well, i.e. close bank account, credit cards, health card, etc. Do we need to sell my house as well?

(2) could you recommend a good accountant/ accounting firm in toronto area who would be able to handle/advise my case? Thanks

nelsona · Post by **nelsona** » Tue Jan 23, 2007 3:37 pm

(1) As I (and your accountant) said, having only a house and many other minor ties is not a problem, having a house and a spouse in canada is the problem. When she joins you in US, even if she does not sell the house, you will not be taxable in Canada on your US income. You may have to report it, but will not pay tax.