Hi Everyone,
My husband and I moved to California from Ontario on July 24th of 2008. We meet the substantial presence test and therefore thought we could file as residents for the entire year to get all tax deductions available to couples filing jointly. However, it seems (according to posts on Canucks abroad) that we still should be filing as dual status. This is confusing. Please consider the following points:
1. my husband works and has a SSN while I do not.
2. Both of us earned wages in Canada until June 24th. (he had some EI income for one month).
3. We both continue to have bank accounts generating interest in Canada.
4. He has investments in Canada including trust funds, Dividents, Capital gains etc.
My questions are:
1. Should we chose the dualstatus or residents for the year option.
2. For interest that we earned in Canada, we were issued T3s but also some NR4s. Do we report the NR4 amounts for the US. As well, on 1040, it asks specifically for interest that is taxable and tax except interest. If we had these issued by a US company it would specify on the 1099. However given that all the forms are Canadian, how do we determine what interest from Canadian banks are reportable and which are not.
3. Divident income. I spent a significant part of this week being bounced around the IRS in regards to how to decide which of my husband's divident income is 'ordinary dividents' or 'qualified dividents'. Again, since our dividents are Canadian they weren't able to say how to report it on the US 1040.
Other than filling out the 1040 and 1116 for tax credits on our wages, Schedules B and D for interests and Dividents, and the TD 99 for declaring foreign bank accounts are there any other options or requirements we're missing?
Thank you!
Cdn Couple 1st year choice to file in Cal. as Residents
Moderator: Mark T Serbinski CA CPA
Re: Cdn Couple 1st year choice to file in Cal. as Residents
[quote="jgoveas"]Hi Everyone,
My husband and I moved to California from Ontario on July 24th of 2008. We meet the substantial presence test and therefore thought we could file as residents for the entire year to get all tax deductions available to couples filing jointly. However, it seems (according to posts on Canucks abroad) that we still should be filing as dual status. This is confusing. Please consider the following points:
1. my husband works and has a SSN while I do not.
2. Both of us earned wages in Canada until June 24th. (he had some EI income for one month).
3. We both continue to have bank accounts generating interest in Canada.
4. He has investments in Canada including trust funds, Dividents, Capital gains etc.
My questions are:
1. Should we chose the dualstatus or residents for the year option.
2. For interest that we earned in Canada, we were issued T3s but also some NR4s. Do we report the NR4 amounts for the US. As well, on 1040, it asks specifically for interest that is taxable and tax except interest. If we had these issued by a US company it would specify on the 1099. However given that all the forms are Canadian, how do we determine what interest from Canadian banks are reportable and which are not.
3. Divident income. I spent a significant part of this week being bounced around the IRS in regards to how to decide which of my husband's divident income is 'ordinary dividents' or 'qualified dividents'. Again, since our dividents are Canadian they weren't able to say how to report it on the US 1040.
Other than filling out the 1040 and 1116 for tax credits on our wages, W7 for an ITIN number, Schedules B and D for interests and Dividents, and the TD 99 for declaring foreign bank accounts are there any other options or requirements we're missing?
Thank you![/quote]
My husband and I moved to California from Ontario on July 24th of 2008. We meet the substantial presence test and therefore thought we could file as residents for the entire year to get all tax deductions available to couples filing jointly. However, it seems (according to posts on Canucks abroad) that we still should be filing as dual status. This is confusing. Please consider the following points:
1. my husband works and has a SSN while I do not.
2. Both of us earned wages in Canada until June 24th. (he had some EI income for one month).
3. We both continue to have bank accounts generating interest in Canada.
4. He has investments in Canada including trust funds, Dividents, Capital gains etc.
My questions are:
1. Should we chose the dualstatus or residents for the year option.
2. For interest that we earned in Canada, we were issued T3s but also some NR4s. Do we report the NR4 amounts for the US. As well, on 1040, it asks specifically for interest that is taxable and tax except interest. If we had these issued by a US company it would specify on the 1099. However given that all the forms are Canadian, how do we determine what interest from Canadian banks are reportable and which are not.
3. Divident income. I spent a significant part of this week being bounced around the IRS in regards to how to decide which of my husband's divident income is 'ordinary dividents' or 'qualified dividents'. Again, since our dividents are Canadian they weren't able to say how to report it on the US 1040.
Other than filling out the 1040 and 1116 for tax credits on our wages, W7 for an ITIN number, Schedules B and D for interests and Dividents, and the TD 99 for declaring foreign bank accounts are there any other options or requirements we're missing?
Thank you![/quote]
You need to report the existence of the RRSP on 8891. This is not one of treaty benefits that is referred to in Pub 519. Don't overthink the full-year joint return, it is simple.
On 8891, you should elect to defer income.
On 8891, you should elect to defer income.
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
Thanks nelsona. I think I was overthinking it. I'm used to using software which is like being spoon fed. This year with the reporting of Canadian income I'm not sure how to distinguish the Canadian interest and dividends. If you could help with these two points I think I should be ok. Thanks!
2. For interest that we earned in Canada, we were issued T3s but also some NR4s. Do we report the NR4 amounts for the US.
As well, on 1040, it asks specifically for interest that is taxable and tax except interest. If we had these issued by a US company it would specify on the 1099. However given that all the forms are Canadian, how do we determine what interest from Canadian banks are reportable and which are not.
3. Dividend income. how to decide which of my husband's dividend income is 'ordinary dividends' or 'qualified dividends'. Again, since our dividends are Canadian they weren't able to say how to report it on the US 1040.
2. For interest that we earned in Canada, we were issued T3s but also some NR4s. Do we report the NR4 amounts for the US.
As well, on 1040, it asks specifically for interest that is taxable and tax except interest. If we had these issued by a US company it would specify on the 1099. However given that all the forms are Canadian, how do we determine what interest from Canadian banks are reportable and which are not.
3. Dividend income. how to decide which of my husband's dividend income is 'ordinary dividends' or 'qualified dividends'. Again, since our dividends are Canadian they weren't able to say how to report it on the US 1040.
You report ALL income. All interest, all dividends, all income from eveywhere.
Unless you know for a fact that the dividends are qualified dividends, then tjey are ordinary. Only the payor of the dividend can tell you.
Unless you know for a fact that the dividends are qualified dividends, then tjey are ordinary. Only the payor of the dividend can tell you.
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
None of your interest is tax exempt. Again, unless you are specifically told it is exempt, it is not. No foreign interest is tax exempt.
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
substantial presence test
Hi jgoveas:
If you moved to California from Ontario on July 24th of 2008 that is only 160 days (less then 183). Have you made your election mased on presence to-date? Do you have to indicate this on 1040 form thata you are making this election?
If you moved to California from Ontario on July 24th of 2008 that is only 160 days (less then 183). Have you made your election mased on presence to-date? Do you have to indicate this on 1040 form thata you are making this election?
Hi Peters,
Sorry that was a huge typo on my part. We moved on June 24th which is 191 days I believe. And we have decided to file as full year residents as the 1040NR form is a hassle. We have still to decide whether we want to exclude our income using form 2555 from Canada or whether to fill out 1116 to obtain credits on taxes already paid. I will post here once I figure out which one gives us more money.
Sorry that was a huge typo on my part. We moved on June 24th which is 191 days I believe. And we have decided to file as full year residents as the 1040NR form is a hassle. We have still to decide whether we want to exclude our income using form 2555 from Canada or whether to fill out 1116 to obtain credits on taxes already paid. I will post here once I figure out which one gives us more money.
Ok sorry guys. I searched the forums on RRSPs and I think my question is dumb enough that no one else has asked for it. I'm THIS close to finishing up taxes and just want to double check one thing. Nelsona is off so if anyone can answer this I'd appreciated it (in return you can tell me how dumb I am for asking).
I know you report RRSP earnings on form 8891 but you don't actually report that information as income on the 1040 right?
Second, given that we will be moving back to Canada this year (so would only have been in the US for one year), does it make sense to then defer the income or to pay it for this year and be done with it. If we defer, do we still have to fill out the 8891 each year even though we've permanently moved back to Canada? Again SORRY for the stupidity.
Thanks!
I know you report RRSP earnings on form 8891 but you don't actually report that information as income on the 1040 right?
Second, given that we will be moving back to Canada this year (so would only have been in the US for one year), does it make sense to then defer the income or to pay it for this year and be done with it. If we defer, do we still have to fill out the 8891 each year even though we've permanently moved back to Canada? Again SORRY for the stupidity.
Thanks!
You should absolutly defer. You only need to file as long as you file 1040, which will be 1 or 2 more years at most.
Remember that regardless of what you do federally, you still need to report any internal income to California.
Remember that regardless of what you do federally, you still need to report any internal income to California.
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
Nelsona! You haven't left! Thanks for replying. I just want to follow up on two things before we lose you: when you say internal income do you mean internal to California or internal income of the RRSP. And I still feel stupid, but the undistributed earnings from the RRSP do not go on the 1040 but only on the 8891 right?
THANK YOU!
THANK YOU!