Hi all,
Did anybody go through the canadian quicktaxweb software dealing with this.
I am runing a test on it and I am reporting only the $43900 income from us employer and reported the toal of $8760 taxes paid according to my w-2 slip. My total balance owing as of this minute shows ~$9500 CAD!!!
Now in the deduction session there are two categories Business Income & Non-Business Income & I assume my emplyement in US is non-business income. I have the follwoing places to enter the tax:
Overseas empl. tax credit amt.
Capital gains exemption amt.
Tax treaty exempt amt.
Excess tax paid (Sec.20(11)) 0.00 0.00 0.00
Deduction 20(12)
Other related deductions
Again I assume going for Tax treaty exempt amout so I enter the 8760 in that field. After going through now I still have to pay $3000Cad owing to Canada. Does this make sense?! Am I doing something wrong? I hope I am
Forein Income Tax Credit in Canada
Moderator: Mark T Serbinski CA CPA
Let's make a deal, you help me with the US portion and I'll help with the Canadian portion! ;) Seriously though, I can't seem to make sense of the US taxes / software.
Here's where I think you went wrong on the Canadian side of things. It should actually pretty simple. In the Income section under "T-4 slip profile" you'll see a subheading called "foreign income". Click on that and then just enter the "foreign employment income" (in US dollars) and "the foreign tax paid" (your portion of line 63 "total tax" from your 1040 + ss tax + medicare tax) again in US dollars. I entered the exchange rate 1.1341 that I got from the Bank of Canada website for the average exchange for all of 2006. I hope this helps...
I ran your numbers but didn't take out my $3600 income from rentals (didn't want to screw mine up too much!) and I show $1700 owing so you should probably only owe $700 or so if that is your only source of income in Canada.
So now my question, have you tried using form 2555 (foreign earned income exlusion) in TurboTax? The numbers look right when I do it but all of a sudden we go from a $2200 return to owing $600. The foreign earned income was $20,511 in US dollars. If I add it to income but then exclude it (-20,511) in the "Other Income" category I would think it would cancel itself out and result in no change to my return but that wasn't the case. Any feedback would be appreciated if you went through this.
Here's where I think you went wrong on the Canadian side of things. It should actually pretty simple. In the Income section under "T-4 slip profile" you'll see a subheading called "foreign income". Click on that and then just enter the "foreign employment income" (in US dollars) and "the foreign tax paid" (your portion of line 63 "total tax" from your 1040 + ss tax + medicare tax) again in US dollars. I entered the exchange rate 1.1341 that I got from the Bank of Canada website for the average exchange for all of 2006. I hope this helps...
I ran your numbers but didn't take out my $3600 income from rentals (didn't want to screw mine up too much!) and I show $1700 owing so you should probably only owe $700 or so if that is your only source of income in Canada.
So now my question, have you tried using form 2555 (foreign earned income exlusion) in TurboTax? The numbers look right when I do it but all of a sudden we go from a $2200 return to owing $600. The foreign earned income was $20,511 in US dollars. If I add it to income but then exclude it (-20,511) in the "Other Income" category I would think it would cancel itself out and result in no change to my return but that wasn't the case. Any feedback would be appreciated if you went through this.
You are filing incorrectly:
You have LEFT Canada, thus you do not report any US incomecfrom after your departure.
Ant US income you do report (from before the move) if any, is NOT treaty exempt.
Get out the emigrants guide before you get in over your head,
You have LEFT Canada, thus you do not report any US incomecfrom after your departure.
Ant US income you do report (from before the move) if any, is NOT treaty exempt.
Get out the emigrants guide before you get in over your head,
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Be careful telly: you and he do NOT have the same situation, as he has LEFT Canada. He should not be reporting any US income from after departure, and should be filing a departure return.
You are still resident.
You are still resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
oh sorry to you both! I ASSumed. :(
Nelsona, can you help me with this:
So now my question, have you tried using form 2555 (foreign earned income exlusion) in TurboTax? The numbers look right when I do it but all of a sudden we go from a $2200 return to owing $600. The foreign earned income was $20,511 in US dollars. If I add it to income but then exclude it (-20,511) in the "Other Income" category I would think it would cancel itself out and result in no change to my return but that wasn't the case. Any feedback would be appreciated.
Nelsona, can you help me with this:
So now my question, have you tried using form 2555 (foreign earned income exlusion) in TurboTax? The numbers look right when I do it but all of a sudden we go from a $2200 return to owing $600. The foreign earned income was $20,511 in US dollars. If I add it to income but then exclude it (-20,511) in the "Other Income" category I would think it would cancel itself out and result in no change to my return but that wasn't the case. Any feedback would be appreciated.
Sorry, you DO have the same situation (almaost).
Hoom *could* try to have himself declared Deemed non-resident, in which case he could get his US income exempt from Cdn taxation. Hwe is not eligible foe OETC, since his employer is not Cdn.
Buut, in my opinion, he is still resident in Canada because of 'spouse and house'
He could then avail himself to all the options telly has, including the XXV(4) filing.
Hoom *could* try to have himself declared Deemed non-resident, in which case he could get his US income exempt from Cdn taxation. Hwe is not eligible foe OETC, since his employer is not Cdn.
Buut, in my opinion, he is still resident in Canada because of 'spouse and house'
He could then avail himself to all the options telly has, including the XXV(4) filing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
I have not filed for non-residency in Canada, since my wife still flys back & forth frequently to Canada and we have 2 condos (both rented) and my wife living staying at her parent's house which she has a share in the house as well! Sounds like a good super strong tie to Canada to me!!! Most importantly I can not be Non-Resident since I sponsored for my parents to Canada. I will check the quicktax again to apply your recommendation telly and see what will I get.
Now for the Turbo Tax I ran some good results with entering both my half year income from US and half a year from Canada and my wife's full year income from Canada, we will have about 600$ tax return from US, and the goof is I totally forgot about the rent income we had in Canada. that just felt like a hammer in my head when I noticed!
I will go over my turbo tax inputs and will get back to you, since I am under a firewall now and cant go through it.
Now for the Turbo Tax I ran some good results with entering both my half year income from US and half a year from Canada and my wife's full year income from Canada, we will have about 600$ tax return from US, and the goof is I totally forgot about the rent income we had in Canada. that just felt like a hammer in my head when I noticed!
I will go over my turbo tax inputs and will get back to you, since I am under a firewall now and cant go through it.
still cant get the canadian tax right!
Hi telly or Nelson,
I am entering the US income in quicktaxweb -- on the income session it asks the foreign income and foreign taxes paid, and it gives me around $7000 balance owing. 48000$ is my total income and ~9000$ is my taxes paid.
Do I still have to put any numbers in the deductiosn session under Foreign Tax Credit? This software is pissing me off...!! lol
I am entering the US income in quicktaxweb -- on the income session it asks the foreign income and foreign taxes paid, and it gives me around $7000 balance owing. 48000$ is my total income and ~9000$ is my taxes paid.
Do I still have to put any numbers in the deductiosn session under Foreign Tax Credit? This software is pissing me off...!! lol