Hi All,
I'm a Canadian working in the US (PA) on a TN Visa and struggling with a few issues on my income tax return. Based on some web research and a phone converstation that I had with the IRS, I was told to file a dual-status return for 2009, since I spent the first 2.5 months living and working in Canada. The 1040 form for my US residency seems pretty straight forward, as I fill in my US income and applicable deductions as per their instructions. However, I'm unsure how to fill in the 1040NR for the first portion of the year that I was living in Canada.
It says on the IRS website that I need NOT declare my worldwide (ie Canadian income) on the 1040NR. In that case, what do I declare and deduct on this form, or do I just file it as a formalilty (ie with 0's)? Also, do I need to file a form 8833? (my gross income was less than 100K if that helps at all) Finally, how does the tax agreement come into play if I file a dual tax return?
One more impoortant thing that might be important: I likely shall return to Canada before the end of the year, so I don't think that I can an emigrant tax return on the Canadian side, correct?
TIA
Filing Form 1040NR for a Dual-Status Return
Moderator: Mark T Serbinski CA CPA
You should file FULL-YEAR ion US, using form 2555 to exclude your Cdn wages friom befiore your move.
Do not bother with IRS telephlunkies.
Filing "dual-status" is not required for Cdns. File as any other amrican returning from abroad would file: full 1040, and 2555 of foreign wages.
On Cdn side, if your intent was to live ansd work when in US when you left, and you have no PRIMARY residential ties in canada (house or spouse), you can file a emigrant return, to avoid Cdn tax on your US-sourced income, but this would mean respecting all other aspects of emigrant rules.
If, on the other hand you did maintain Cdn ties, then I would just file a normal Cdn return, report US income on it and take tax credits. There used to be a way to simply write the US incoem off on line 256 of your Cdn return, but the rules have tightened on that, so ido not suggest this.
If this was the case though, I would then file a 1040NR for the full year, and not bother with 1040. I would use the treaty form 8833 to say that I am Cdn resident despite meeting SPT, by treaty.
Do not bother with IRS telephlunkies.
Filing "dual-status" is not required for Cdns. File as any other amrican returning from abroad would file: full 1040, and 2555 of foreign wages.
On Cdn side, if your intent was to live ansd work when in US when you left, and you have no PRIMARY residential ties in canada (house or spouse), you can file a emigrant return, to avoid Cdn tax on your US-sourced income, but this would mean respecting all other aspects of emigrant rules.
If, on the other hand you did maintain Cdn ties, then I would just file a normal Cdn return, report US income on it and take tax credits. There used to be a way to simply write the US incoem off on line 256 of your Cdn return, but the rules have tightened on that, so ido not suggest this.
If this was the case though, I would then file a 1040NR for the full year, and not bother with 1040. I would use the treaty form 8833 to say that I am Cdn resident despite meeting SPT, by treaty.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
There is no majic amount of time that you need to be out of canada for you to file departure return. It doe snot have to be a full 2 years (it used to).
But practically, it should at extend from one calendar year to the next, like your situation.
But practically, it should at extend from one calendar year to the next, like your situation.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best