Canada/US treaty: PR of Canada on H1B visa

comet00 · Post by **comet00** » Sun May 29, 2011 1:09 pm

Hi,

I will be moving to the US soon on an H1B Visa. I am PR of Canada and I have ties in Canada (house and husband). My husband will have a H4 Visa just to visit me from time to time (and to have a ITIN number for the US taxes) but he will be staying most of his time in Canada.

Since my husband is not working, my US Salary will cover the expenses in Canada and US and my Canadian Mortgage.

I am eligible to the Canada/US tax treaty?

thanks for your answers

nelsona · Post by **nelsona** » Mon May 30, 2011 7:59 am

Too vague.

comet00 · Post by **comet00** » Mon May 30, 2011 5:44 pm

Hi Nelsona,

Sorry for being too vague but all this is new for me. I will be more than happy to give more details about the part you want me to develop.

I will be moving to the US on a H1B visa and all this is new for me and I don't know where to begin with income tax.

I know that there is a tax treaty between US and Canada and I wonder whether I will be eligible to declare my tax in Canada since I have a house and my husband will be staying here, at least for the first year. If so, how should I proceed?

Thanks a lot.

nelsona · Post by **nelsona** » Mon May 30, 2011 7:17 pm

By keeping house and spouse in canada, you will continue to eport all world income in canada.

But you will have to also report your US erned income in US, on a 1040NR.

Not really a tax treaty issue at this point.

comet00 · Post by **comet00** » Tue May 31, 2011 12:06 am

Thanks Nelsona,

I see. My US employer sent me a w-4 form to fill. Should I fill the 1040NR at the same time?

What kind of deductions could I get? Could I include my Canadian Mortgage.

How many allowance could I put on w-4. My husband will have a h4 visa. It doesn't allow him to work or have a social security number but he will have a ITIN to be able to fill the Income tax together.

Sorry too many questions. Hope you can help me to understand the process.

nelsona · Post by **nelsona** » Tue May 31, 2011 8:57 am

You should simply file W-2 as married, no exemptions. You will get tax back at year end. W-2 is not important.

1040NR is only filled out at year end. It is a tax return. You don't fill in tax returns until year-end, when you get your W-4.

comet00 · Post by **comet00** » Tue May 31, 2011 12:55 pm

Hi Nelsona,

I am still in Canada right now and my US position will start on mid-August 2011.

My employer sent me the w-4 for salary withholding. Could I fill "married filled jointly" since I will be on H1B and my husband on H4 with a ITIN?

There is an option where I can apparently claim itemize deductions to decrease my withholdings? I also read on publication 936 that mortgage interest can be reduced for first and second home.

Also, if I understood correctly, the w2 along with 1040NR will be filled on December 2011, right?

Finally, is 1040NR accompanied with Schedule A?

Thank you so much

comet00 · Post by **comet00** » Tue May 31, 2011 1:25 pm

Hi Nelsona,

I think I understood now. All the matter is related to the residency tax status. Wether I will ba considered as a nonresident alien or a resident alien.

I will be on H1B temporary and once in the US my employer will apply for my green card (EB1). I will probably met the 183 presence test when I have to fill the income tax in April 2012. The question is related to w4 and how should I consider myself.

If I consider myself as nonresident alien, I will be eligible to claim only one witholding allowance on Item 5, but since I am a resident of Canada, I can claim an additional exemption for my spouse if the spouse has no gross income for US tax purposes (I found this on IRS.gov).

If I met the 183 presence test, it will be a different story I guess

Sorry, all this seems very complicated. Hope you can help me again

nelsona · Post by **nelsona** » Tue May 31, 2011 2:23 pm

You are overcomplicating. I said file your W-4 married, with no exemptions.

The matter of your taxes will be discussed next spring.

comet00 · Post by **comet00** » Tue May 31, 2011 5:10 pm

Oh Thanks a lot.

Comet

comet00 · Post by **comet00** » Wed Jun 01, 2011 12:43 pm

Hi Nelsona,

Sorry to bother you again. I told to my accountant that we need to fill married with no exemptions but he said: "That is correct. However, you would have to use single rates. What you could do is complete the w4 form as single and claim 2 exemptions in item 5. That way they will withhold at the higher single rates."

Why I have to do this? Please help me

nelsona · Post by **nelsona** » Wed Jun 01, 2011 1:29 pm

Your paying your accountant. he said "that is correct".

Your withholding is not really important, especailly since you are starting work mid-year.

I've told you twice what to do.

I suspect your acct is not a cross-border expert.