Tax Return - CDN living in the US with a green card

[carlym]

Hello, hopefully someone can help me out. I have called the IRS and Revenue Canada and am so confused by everything! Here is our situation:

My husband was transferred from Alberta to Texas in July 2009 with his employer. We entered the US on an L1A visa and then applied for permanent residency and obtained our green cards in Nov 2009. We sold our house, withdrew all of our RRSP's prior to leaving Canada in July. We have a CDN bank account and a credit card left in Canada. We purchased a home right away in the US, opened bank and credit card accounts. Revenue Canada is telling me to complete a standard return and prorate the credits for the time we lived in Canada (Jan - July) and that is all I need to do. The IRS has told me many different things and I can't even begin to explain those conversations. My understanding is that because we received our green cards we can file a standard US return like a US citizen but after reading through the internet I am not so sure of this anymore.

We have no plans on moving back to Canada in the near future.

Can someone please try and help me with this. Thank you so much!

[nelsona]

You should have waited until AFTER leaving canada to collapse RRSP as you would have only paid 25% tax .Now it must be included as income on your Final Cdn return. Follw the rules of the Emigrants guide from CRA

IRS: You can file a standard 1040, because you are Cdn. You need to report all income on your return for the year. Your RRSP income is ZERO for US purposes (as it would have been if you had waited until after move.

Don't bother calling IRS telephlunkies. They are notoriously wrong and inconsistent in their answers on any subject, let alone international issues.

[carlym]

[quote="nelsona"]You should have waited until AFTER leaving canada to collapse RRSP as you would have only paid 25% tax .Now it must be included as income on your Final Cdn return. Follw the rules of the Emigrants guide from CRA

IRS: You can file a standard 1040, because you are Cdn. You need to report all income on your return for the year. Your RRSP income is ZERO for US purposes (as it would have been if you had waited until after move.

Don't bother calling IRS telephlunkies. They are notoriously wrong and inconsistent in their answers on any subject, let alone international issues.[/quote]

Thank you!

Just to confirm all we need to put as "world income" on the 1040 is the income that is reported on our T4'S? We can then claim the income tax paid as well?

[nelsona]

Your world incoem is your wages interest rent etc tha tyou made in 2009.

You can take credit for the tax you fianlly calculate on your rturn.

A better way though uis the EXCLUDE your CDn wagesm by using form 2555. This will almost surely yeild lowest US tax.