Canadian PR commuting to work in MI from ON on H1B

[PC]

I read through a lot of your posts, but still confused as to what to do with my situation.

Before becoming a Canadian PR in 2003, I have lived/worked in USA as a student for 6 years, and was filing 1040 in US (after first 5 years had to stop filing 1040NR and filed 1040). I moved to Canada in 2003 and worked in Canada until September 2006.

In 2006, I worked for the first 9 months in Canada and I have a T4 from my Canadian employer and the last 3 months I worked in USA and I have a W2 from my US employer.

I have an H1B work visa to work and live in USA. But I chose not to move to USA last year and instead to live in Canada and commute to work across the border, since I am waiting to fulfil the 3 year residency requirement to apply for my Canadian citizenship.

I do plan to move to US next year as soon as I get my Canadian citizenship.

My US employer withholds my federal and state tax normally as they wud tax an American, including SocialSecurity and Medicare since I am in H1B work visa. Although I do not physically live in the US at present, I have maintained a US address since 1997 till present.

Should I be filing my US taxes separately and Canadian taxes separately for 2006, since I am moving to US at the end of this year or early next year? Most people I know who moved to US on a TN/H1B, have never claimed US income in Canada and stopped filing Canadian Tax Return, since they became non-residents of Canada for Tax purpose.

I am also not sure if I should claim both US income on Canadian Tax Return and Canadian income on US Tax return.

In any case, once I move to USA later this/early next year, how would I pay file my tax returns in the future?

Any reference or help would be appreciated. In the past I have always completed my taxes on my own, but this time I am really confused. Seems like it would be lot easier to just file exclusively for US/Canada (If there is a way). Please advise.

Thanks for your help.

[nelsona]

You should be filing in both US and Canada, and reporting ALL your icome in BOTH places.

Then you will take foreign tax credits, where eligible.

Please read more on this forum, your case is not complex.

I might answer more specifically --- but only after the filing deadlines have past.