TN Visa Non-Resident Taxes

[needhelpTN]

Thanks. I think you posted about this before throughout the forum. I will look into it. Right now there is a significant difference in the return as a resident vs non-resident. Even if I am taxed fully as a resident in Canada, I probably have a lot of carryover tuition credits from previous years and this year that could in theory cover the estimate tax I owe in Canada as a resident as well.

For the US side, I am not sure if its because of just the standard deduction from the 1040 (~12000) vs itemized deduction of the 1040NR (just state taxes). I will look into it again.

[nelsona]

AS I said, the goal of the XXV return is to pay 1040MFJ rates on only your US income. Since the MFJ rate includes the highest possible deduction (standard or itemized), it provides the lowest rate. You then use that rate on your 1040NR.

The only time it wouldn't is if your foreign income (or spouses income) was so great as to move you into a much higher tax bracket. In thatcase the1040NR would be least tax. There is no way that it can be higher than 1040, if done correctly.

Just looking at 2019 return, here is what lines need to be looked at:
1040: take tax, (line 12b) and divide by AGI (line 8b). This gives you your tax rate. You are done with 1040 at this point.

1040Nr: take AGI (line 35) and multiply by rate above. Write this in line 42. (Compare this with what the 1040NR tax table would give you using lines 37 thru 42 and use the smaller value).
Then proceed with remainder of 1040NR.

[nelsona]

Don't forget that you can use the Cdn taxes that you paid during 2019 as part of the deduction you calculate on 1040. This may get you into the itemized deduction greater than the 24000.

Remember, the fake 1040 you are preparing is MFJ, so the standard deduction is $24K not 12K. Singles or MFS can't use this method.

[needhelpTN]

Thanks again. the joint rate was worse. Had a quick question. I am completing the NY IT-203 which asks if there are any foreign bank accounts (Item D1). The instructions state that people should mark Yes if they also filed a federal schedule B.

Because I didn't do a Schedule B since I am a non-resident alien, would I mark No on the NY State Tax Form or would you mark Yes because I do have a Canadian bank account.

It doesn't seem to impact the filing forms either way.

[needhelpTN]

[quote=nelsona post_id=268313 time=1586902187 user_id=30]
Don't forget that you can use the Cdn taxes that you paid during 2019 as part of the deduction you calculate on 1040. This may get you into the itemized deduction greater than the 24000.

Remember, the fake 1040 you are preparing is MFJ, so the standard deduction is $24K not 12K. Singles or MFS can't use this method.
[/quote]

I forgot to ask but do you recommend completing the 1040-NR or the EZ version.

At this moment the only tax document I have is the 1095-C and 1 W-2.

[nelsona]

I never recommend the EZ version of anything. Your software handles the regular versions.

[needhelpTN]

Which software do you recommend?

I am currently doing everything manually (on the PDFs available from the IRS and NY State Tax) and will be mailing in the tax forms. This includes federal tax (just 1040-NR-EZ) and the NY State (IT-203, and applicable documents like IT-2).

[nelsona]

never do taxes by hand. Taxact and ufile work fine.