Husband and wife working in the US as NR

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nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You are correct.

Its just that, without this proforma, there would be many instances where the US tax burden would be more than Cdn.

For example, if you had pursued more agressively your Cdn deductions,. like RRSP etc, you could see yourself unable to use all the US tax.

Also, your situation, where you both work, and both work in US, makes the discrepancy between married filing separate (like 1040NR) and MFJ (like 1040) less obvious.
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
dorins
Posts: 49
Joined: Sat Feb 21, 2009 2:56 pm

Post by dorins »

Nelsona:

This is a thank you note :-)
I just spoke with an IRS rep (I had a typo on my daughter's ITIN), after he corrected, he said that the refund was xxx, much lower than I indicated.
I then pointed to him the 1010 pro-forma and 8833 (they didn't look at them yet), walked him through Article XXV etc.. At the end of the conversation he said the refund will be as I indicated.

Thanks again, I'll see if there is an opportunity to go retro, only if the RRSPs I contributed in didn't materialize their full effect, Otherwise I am just shifting money from one pocket to another (not my personal pockets).

Many thanx again!!
Cheers
dorins
Posts: 49
Joined: Sat Feb 21, 2009 2:56 pm

Canadian owed taxes on 1040 proforma

Post by dorins »

Nelsona:

I posed this in a different thread, but I think it belongs here.

I thought I understood the 1040 proforma to 1040NR adjusted tax rate process, but it seems I am doing something wrong, based on your comments elsewhere:

On the 1040 proforma, I itemized deductions on Schedule A.
In the "Taxes you paid" section, under "other taxes", I included taxes owed to Canada in the tax year. I calculated this on a simple Canadian tax return, where I used the US job income and Cdn interest, without any deductions from US taxes already paid through wages (SS, medical etc).

This lowers my effective rate to 17%, which I then use on the 1040NR


Is this correct?
Cheers
nelsona
Posts: 18678
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

For your pro forma you cannot use 1116, thus you should use schedule a, but it MUST be actual tax sebt to CRA in that calendar year, which is not subsequently returned to you.

You cannot use taxes that you owe on that schedule.
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
dorins
Posts: 49
Joined: Sat Feb 21, 2009 2:56 pm

1040 proforma Schedule A taxes paid

Post by dorins »

Nelsona

I DID get it wrong ....I had to go back in this board and the old board to try to make sense of it.

What I realized now is that in Schedule A, I can only enter the tax I actually PAID in 2009 - this would (in my case) be taxes I paid to CRA for the 2008 tax year.

Is this correct? ... for the last time, I promise :-)




What I did last year though, was to use in Schedule A taxes I OWED to CRA for 2008. So I have to make some adjustments for last year's taxes - and do them properly this time.
Cheers
nelsona
Posts: 18678
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Correct
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
dorins
Posts: 49
Joined: Sat Feb 21, 2009 2:56 pm

Post by dorins »

Nelsona:

This is where I misread how to use the Canadian taxes in Schedule A of 1040 (below quote). I understood I can calculate a 1) Cdn return using only the income with no taxes - this would indicate what taxes I OWE in Canada for this income, 2) then use the tax OWED (calculated this way) in the Schedule A.
3) Then once I calculate the 1040NR taxes (based on proforma rate), 4) I go back to the Cdn return and finish it.

However, what I read in today's response is that I cannot do this, the only taxes I can use on Schedule A are taxes actually PAID in 2009. Since I didn't actually paid the 2009 related taxes yet, they would have to be what I paid in 2009 for the 2008 tax year.

Sorry if I come across thick-headed, obstinate (fill in the blanks), I just want to make sure I file correctly.



[quote="nelsona"]

.............................
You only do the back-and-forth ONCE for the tax credit calculation. [color=darkred]You calculate your Cdn return with no regard for foreign tax credi[/color]t, then apply it to your US return, and that's it for US. You finish your 1040NR completely at this point. Then you return to your Cdn return with the final numbers from your US return[/quote]
Cheers
nelsona
Posts: 18678
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Asked and answered.
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
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