RRSP contribution

[raajen]

Hi,

I am a Permanent Resident of Canada and worked in Canada only for 2 weeks in 2008. After that, I am working in US on L1 visa and travels between US and Canada frequently. My family lives and works in Canada.

I had contributed for 401k.

1. Do I have to pay taxes in Canada?
2. If so, Can my contribution of 401k be counted towards the RRSP limit?
3. Do I have to show my spouse's income in US taxes?
4. What are the deductions be applied towards Canadian tax?

Thanks.

[nelsona]

You are taxable in Canada, unless you can show significantly more ties in US than canada. Your Cdn wages are taxable in Canada anyways.

Your contributions made in 2008 and before cannot be deducted on your Cdn return.

How you file in US depends on your income and your spouse's.

[raajen]

Hi nelsona,

Thanks for the info.

I have a house in Canada. Hence, I need to file Canadian taxes showing US income as worldwide income.

1.My spouse doesn't have income in US but has income in Canada. Do I have file US taxes as married filing jointly? Do I have to declare her Canadian income in US?
2. While filing US taxes, do I have to show my interest income in Canada and RRSP contributions?

Thanks.

[nelsona]

1. You can file jointly, but this means you MUST file all her income.
2. Yes.

You should look into the XXV option for filing a 1040NR, it will save you lots of US tax.

I have described it sufficiently elsewhere as to not go into it here.