Hello,
I have been recently working in the US under a TN visa. I had spent 2 months volunteering for a non-profit organization and was subsequently offered a job (different position). I left Canada on August 29th 09, then returned to Canada on Nov 1st. I then returned to the US a week later where I applied (successfully) at the border for my TN. I have several questions regarding both tax law and residency.
1- Am I able to make a first year choice? I have been in the US for four non-continuous months, two as a visitor and two as a non-resident alien.
2- Should I make a first year choice? The Canadian/US tax rates (at my level anyway, as I only worked the last 2 months of the year) are very similar. Are there other advantages to filing in the US vs Canada?
3- It gets more complicated; I worked on a ship which was foreign owned at the beginning of 2009 but ported out of Miami. While the 'residency' requirements specifically forbid counting this time as residency, it was income earned in the US, but NOT taxed. I was planning on reporting it as foreign earned income to Canada (as I did for 2008) but now...
4- Can I file as a Canadian without any issues? I was only in Canada for 4 months of the year. As mentioned above, there were four months where I wasn't in Canada OR the US(for residency purposes) and another 4 month of me being legally in the US.
5- I have gone through the trouble of setting up a US bank account, getting a SSN, PO Box, library card etc. Because I am using my SSN for the first time, I have no credit history and was thus denied a $300 limit credit card. In Canada I have several cards which I regularly pay off, and thus have acquired a respectable credit history. I read an earlier post about someone having to close their bank accounts because some banks do not offer "non-resident" accounts. Is there a way for me to keep my finances intact in Canada?
6- On the above note: While I plan on returning to live in Canada within the next year, I am wondering how important it would be to start building a credit history here. As mentioned above, I don't even qualify for a credit card. Should I decide to buy a house or a car in the future, my credit history will most certainly be stronger in Canada. Would I be able to get a mortgage/car loan from a Canadian bank for a house within the US? Or is it worth it for me to prepay (and pay an annual fee) for a 'secured' card.
7- Are there other consequences to declaring US residency for tax purposes? How about my Canadian health insurance? I own a car in Canada and will not be bringing it to the US. My job requires that I soon get a state drivers license but the state requires that I surrender my Canadian one first. Will this affect the ownership/registration of my vehicle?
I think that's enough for today. There are a few more cogs to this wheel of tax terror but I will save them for another post. Is anybody willing to take on this challenge?
Thank you in advance!
Canadian living in US under TN visa Temporarily
Moderator: Mark T Serbinski CA CPA
How you file in US and how you file in canada re not rewally related, so you need to look at each independently.
Since you don't seem to have the intention of leaving canada permanently -- or even medium term -- you should continue to file a full Cdn tax return/
For US, since you don't meet SPT, I would, for simplicity, file 1040NR for 2009,reporting US-sourced income only. We can look at your boat income later. Filing dual-status doesn't help you much. You could file 1040 full year if you want, but we are not talking much income, so why bother.
How you file in US doesn't change how you file in canada. Your goal would be to reduce your US raxes just below your Cdn taxes.
With a new SSN, your credit history in US is nil. Keep your Cdn cards. You aren't moving to US for any time, so who cares.
Cdn health insurance requires that you be in canada for 183 days in any 365 day period. have you been? Woll you be? If not, your card is going to lapse, regardless of your tax residemce.
You need to get DL,plates, and insuarnce where you live, again, reghardless of tax residence.
I would think of myself as being o na working vacation in US. Nothing changes for Canada.
Since you don't seem to have the intention of leaving canada permanently -- or even medium term -- you should continue to file a full Cdn tax return/
For US, since you don't meet SPT, I would, for simplicity, file 1040NR for 2009,reporting US-sourced income only. We can look at your boat income later. Filing dual-status doesn't help you much. You could file 1040 full year if you want, but we are not talking much income, so why bother.
How you file in US doesn't change how you file in canada. Your goal would be to reduce your US raxes just below your Cdn taxes.
With a new SSN, your credit history in US is nil. Keep your Cdn cards. You aren't moving to US for any time, so who cares.
Cdn health insurance requires that you be in canada for 183 days in any 365 day period. have you been? Woll you be? If not, your card is going to lapse, regardless of your tax residemce.
You need to get DL,plates, and insuarnce where you live, again, reghardless of tax residence.
I would think of myself as being o na working vacation in US. Nothing changes for Canada.
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
(5) I've read some posts about using "ameritrade" and "TD waterhouse". If you do a search for those terms you should come up with posts that deal with this question. If you find a good solution to this, I'd like to hear what you come up with.
(6) A couple things that I can think of to note:
- The cost of an annual fee for a secured credit card is not very high (mine is $18)
- You might be able to get a non-secured card if you try the right places. I have a friend that had no issues getting one via Wells Fargo (I think) - but that was about 2 years ago. I had a really hard time getting one. I eventually managed to get one via my Insurance company. Basically you have to try and find someone that is willing to look at your canadian credit history. I kept the same insurance company when I moved, so I think that helped.
- I think I read somewhere that Royal Bank was good to someone about checking their canadian credit history for credit cards and car loans. I get the feeling it really depends on who you are dealing with, how experienced they are with this stuff, and how much they are willing to try and help you.
- Another thing I've learned is that (big) banks are probably less willing to do such a thing compared to other places like stores (Macy's, etc). Although, Macy's screwed up and put my wrong address and thus I was denied. But anyway...
- Be careful where you apply, if you apply with too many places or get denied, it might cause other places to deny you because you previously were denied by someone else or because you've applied to too many places in too short a period
- You can avoid it altogether by just using your canadian card, however, you will pay a premium on exchange rates
I really doubt that you could get a loan in Canada to buy a house/car in the USA, but that's just my instinct. It probably would depend on the details - like if you already own a house in Canada, where you are a resident, etc. (If you are buying a secondary house in the US for vacation purposes, that would probably be ok, but a primary residence probably would not be). Again, I'm no expert, those are just my thoughts. Anyone that knows better, feel free to correct me :)
(6) A couple things that I can think of to note:
- The cost of an annual fee for a secured credit card is not very high (mine is $18)
- You might be able to get a non-secured card if you try the right places. I have a friend that had no issues getting one via Wells Fargo (I think) - but that was about 2 years ago. I had a really hard time getting one. I eventually managed to get one via my Insurance company. Basically you have to try and find someone that is willing to look at your canadian credit history. I kept the same insurance company when I moved, so I think that helped.
- I think I read somewhere that Royal Bank was good to someone about checking their canadian credit history for credit cards and car loans. I get the feeling it really depends on who you are dealing with, how experienced they are with this stuff, and how much they are willing to try and help you.
- Another thing I've learned is that (big) banks are probably less willing to do such a thing compared to other places like stores (Macy's, etc). Although, Macy's screwed up and put my wrong address and thus I was denied. But anyway...
- Be careful where you apply, if you apply with too many places or get denied, it might cause other places to deny you because you previously were denied by someone else or because you've applied to too many places in too short a period
- You can avoid it altogether by just using your canadian card, however, you will pay a premium on exchange rates
I really doubt that you could get a loan in Canada to buy a house/car in the USA, but that's just my instinct. It probably would depend on the details - like if you already own a house in Canada, where you are a resident, etc. (If you are buying a secondary house in the US for vacation purposes, that would probably be ok, but a primary residence probably would not be). Again, I'm no expert, those are just my thoughts. Anyone that knows better, feel free to correct me :)
Just a warning that a secured card does little to help your credit record/score. Better to develop a personal relationship with a banker that will override all the automatic denial triggers, by seeing your paycheck going into his bank.
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