Back and forth US to Canada to US. How to file tax?

jennie · Post by **jennie** » Fri Feb 15, 2008 12:38 am

Can anyone advise me how I must file my taxes this year. I am a Canadian and had been working on TNs in the US for 3 years. This year I moved back to Canada in June, including importing my car, giving up my apartment, taking all my stuff, and establishing an apartment and job in Canada. After 4 months however I had a great new job offer in the US so moved back to US on a new TN. So I was a resident of the US for 8 months, the beginning and end, and Canada 4 months in the middle.

How do I file my taxes this year?
Can I make RRSP contributions in Canada to decrease my tax for 2007?

nelsona · Post by **nelsona** » Fri Feb 15, 2008 8:00 am

You will file taxes in US like you never left.

In canada you will file as a returnng resident and departing in the same year. You will report any world income you made while in canada, plus any growth in any investements (non-RRSP) over the 4 months.

You will then take your Cdn tax and use it as a foreign credit on your US tax return.

It's unlikely that RRSP dedcution would be much benefit to you unless you made about $30,000 in your 3 months. Save it for when you return to canada next time.

jennie · Post by **jennie** » Fri Feb 15, 2008 11:19 am

thanks nelsona
people mention a form called Rev Procs in this forum. I have a small RRSP in Canada. the interest it generates goes back into the RRSP. do I have to report that to US or Canada at tax time?

nelsona · Post by **nelsona** » Fri Feb 15, 2008 12:56 pm

The Rev Procs have beeen replaced by foprm 8891 since 2005. You should havebeen filing these, regardlerss of the size of your RRSP.

Look for 8891 threads on this site. ALL answers on this are there, including how to back file.

jennie · Post by **jennie** » Sat Mar 15, 2008 12:12 pm

thanks nelsona
I realize I still dont get it. You said file US tax like I never left.
Do I report on my US Tax Form my Canadian income from July to October while back in Canada?

nelsona · Post by **nelsona** » Sat Mar 15, 2008 1:57 pm

Yes, you file a full year 1040, reporting everything, including your Cdn income. This will get you a better tax RATE, trust me.

Then, you take credit for the Cdn taxes you paid on your Cdn income using 1116.

nelsona · Post by **nelsona** » Sat Mar 15, 2008 1:58 pm

Your Cdn return will be quite unusual in that it will have BOTH a return date and a departure date.