First tax year in the USA

mikem · Post by **mikem** » Tue Apr 09, 2013 5:37 pm

I moved to the US last March on H1B. My wife and daughter are both H4. We both had income in Canada during the first 3 months of 2012, so I've filed non-resident returns to Canada. I'm now trying to get my US taxes done but am not sure how to handle my Canadian income. I went to a "tax expert" locally and he says I just leave the Canadian income out since I filed in Canada. This doesn't seem correct to me, but he is the expert (supposedly). Can anyone help shed some light on this for me?

Thanks.

nelsona · Post by **nelsona** » Tue Apr 09, 2013 5:50 pm

you file a full year joint 1040, reporting ALL income including Cdn, and then exempt your Cdn wages using 2555.

Your local yokel was wrong, and could have gotten you into big trouble.

Read other threads about foreign reporting and RRSP handling. You've been here over a year you should have found this forum sooner.

mikem · Post by **mikem** » Tue Apr 09, 2013 6:52 pm

Thank you nelsona. One other quick question -- I cleared out my brokerage account in Canada before moving to the US... can I also claim an exemption on the capital gains from that sale?

Thanks.

nelsona · Post by **nelsona** » Tue Apr 09, 2013 6:54 pm

The 2555 exclusion applies only to wages. You will need to report al the gains on your US return, and use foreign tax credits, form, 1116.

mikem · Post by **mikem** » Wed Apr 10, 2013 7:55 pm

Thanks again! So now I'm filling out the W-7 to get ITINs for my wife & kid. The IRS website says they now require "certified" copies of identification from the issuing agency. Is this for real? Do I really need to go to a Canadian consulate and get certified copies from them? It says alternately we can visit an IRS field office and present said identification, or mail it to them, but that would probably mean being without passports for a couple of months!

Am I missing something here??

nelsona · Post by **nelsona** » Wed Apr 10, 2013 11:46 pm

Nope. it has become complicated. Someone else may have advice.

mtnman · Post by **mtnman** » Thu Apr 11, 2013 1:40 am

Or you could use a Certified Acceptance Agent located in Canada.

mikem · Post by **mikem** » Fri Apr 12, 2013 6:44 pm

I ended up taking a trip down to the IRS Taxpayer Assistance Center. They were able to process the ITIN apps for my wife & kid without sending their passports away.

I have to say, it was a rather entertaining experience -- really weird & obnoxious people, vagrants, illegal aliens and mentally ill abound.