Canadian returning to Canada - single filing

chrissy1013 · Post by **chrissy1013** » Tue Apr 17, 2012 10:46 am

Hi,

I read through the forum and still unclear or some of the items, wishing some of you experts can help

- moved to US on TN since 2008 and returned to Canada in Aug 2011.
- 1 W-2 and 1 T-4 with some minor misc. items.

for US filing:
1) I think I am supposed to file as a dual status (attached 1040 as statement, but filed 1040NR?)
2) By doing so - i would only include my US income up until august but not the cdn income afterwards. would I need to pro-rate exemption applied ($3700?)
3) the standard deduction would not be applied (so my only deduction would be donations and state tax withheld)
4) I just realized my other former EE has put in the match contribution in the 401k account during 2011 for 2010 - do I need to include this anywhere for my 2011 return?

for Cdn filing:
1) the typical T-1, include the US as foriegn income/tax credit?

Your help is greatly appreciated.

nelsona · Post by **nelsona** » Tue Apr 17, 2012 11:02 am

1-2-3) Given your late return to canada, you are likely better off filing a full year 1040, and then excluding any Cdn wages after the move by form 2555.

This would get you the standard deduction.

Or you can doi as you say file dual status.

You can choose either way.

4). No

1) IN canada you have no choice: you are a returning resident, meaning you file a "normal" T1 for your province, BUT you write an arrival date, and you only report income from AFTER your arrival date.

chrissy1013 · Post by **chrissy1013** » Tue Apr 17, 2012 12:10 pm

oh this is so helpful! Thanks!

I would get probably >$ 500 more refund if i can file 1040 for the full year with the US with the deduction!

I just looked into F2555 - am i qualified though? Seems like i wouldn't pass the bona fide residence test / phsyical presence test / home tax test given the time requirement in the foreign country?

I cannot express how thankful I am. Tax with dual countries = nightmares.

nelsona · Post by **nelsona** » Tue Apr 17, 2012 1:14 pm

The way you do 2555 in the year you leave is you file an extension, stating that you need time to meet PPT, which for you should be in August. then you file 1040 as you now qualify for PPT You prorate the maximum yearly exclusion for the period ending Dec 31, 2011.

tukee · Post by **tukee** » Fri Apr 20, 2012 10:29 pm

I am in a similar boat to chrissy1013, except that I moved back to Canada on July 3rd. (And was also present in Canada for a total of approx 2-3 weeks prior to July 3rd.)

Does this change any of the advice given to chrissy1013 regarding US tax filing? Do I file for the full year? Include/exclude Canadian income?

Thank you.

nelsona · Post by **nelsona** » Fri Apr 20, 2012 11:25 pm

It is always a choice. the earlier n the year you left, the less you save by filing full-year 1040, but it almost always is better.

chrissy1013 · Post by **chrissy1013** » Tue Sep 11, 2012 12:57 pm

Finally reached my 1 year and ready to file my tax before the extension ends.

However, i just realized, even though i can exclude my CAN income, the tax bracket applies on my US income does need to reflect ALL my income - which is significantly higher. This got me into the tax owed boat given i got a hefty signing bonus in Canada during the year.

I am exploring to see if filing dual status might help the case. I was wondering if you can help with my original question - would I need to pro-rata the exemption ($3700) applied if i file a 1040NR?

Thank you again!!!

nelsona · Post by **nelsona** » Tue Sep 11, 2012 1:24 pm

If you file dual for 2011, you get your exemption only, but no standard deduction.

As I said 4 months ago, its your choice. Choose the return that gives you the lowest US tax owed (or biggest refund).

Remeber, you are only excluding the portion of Cdn wages from 2011.

What amounts are we talking about. ie. what was yor US income for 2011, and what was your Cdn wages for 2011,

chrissy1013 · Post by **chrissy1013** » Tue Sep 11, 2012 1:31 pm

so quick with your response!

i have about 47k in US and 36k in Canada.

nelsona · Post by **nelsona** » Tue Sep 11, 2012 2:22 pm

Yeah, that prooably stretches you into the higher brackets. In the 'olden days' the calculation would take the Cdn wages off the top.

You still have the 3 ways;
1040 + 1040NR dual status reporting no Cdn wages
1040 using 2555 for Cdn wages
1040 using 1116 for Cdn wages

At least for 2012 you won't have to file in US at all.

chrissy1013 · Post by **chrissy1013** » Tue Sep 11, 2012 2:30 pm

Its a shock that i cannot easily locate a professional in canada to do a US filing.

I think my best bet is to exclude my canadian income and simply file my US.

You know...I just realized, during my employment in US (pre-July), I was sent to India for two months. So, in 2011, I don't even have 183 days in US!!!! I think I can just file 1040NR! right? I will report my income related to the two months since it's paid through US, but i wasn't pyschially there...so. 1000 years later, I think my return doesn't have to be complicated after all! (please let me know if i still need to include the two months for the presence test b/c its via us employment).

nelsona · Post by **nelsona** » Tue Sep 11, 2012 3:04 pm

No, you cannot simply file 1040NR, because you were resident on Jan 1 2011. Since you met SPT the previous year, and filed a 1040, you only stop being a US tax resident either at the end of 2011, or at the date you took up residence elsewhere, which would be august when you moved to Canada.

Once you are considered US resident, like in 2010, You need to leave US and establish residence elsewhere before you can file a 1040NR.

You know you could have calculated all these methods in the last 8 months, you didn't have to wait until you met PPT to do the calculations.

The income you earned in India is still aprt of your world income, which you need to report on the 1040 portion of your dual return, and cannot be excluded by 2555 either.