What is the best way to file our 2008 us tax return?
We are Canadian citizens, US residents now. My husband arrived in US and started to work on Feb. 25 2008. I lived in US for 5 month (Mar~June,Dec.) and lived in Canada for 7 month (Jan.~Feb, July~Nov.). I left Canada and arrived in US in Dec. 8th 2008. My daughter lived in US most of the 2008. We have a house in Canada in 2008.
My husband had Canadian wages about US$15k in Jan. and had US wages about US$100k in Mar.~Dec. I had employment insurance income $10k in Jan.~June and had Canadian wages US$50k in July~Dec. We don’t have any above line deduction in 2008.
We bought a house in Sept. 2009 in US. Our 2009 AGI is $155k. I try to reduce the total AGI to below $150k for 2008, so we can qualify the first home buy credit in 2008.
How should we file the 2008 return? If we file 1040 jointly as resident in 2008, do we have to report the Canada income? If we file dual status jointly in 2008, do we have to report the Canada income?
Currently, we filed 1040 jointly as resident in 2008 and only reported US income in 2008. And we both filed Canadian return as resident with world income in 2008. However I think we may need to report the Canadian income in US return. If it is true, should we amend the 2008 return?
Thanks,
Springflower
2008 us return
Moderator: Mark T Serbinski CA CPA
If you file jointly you have to report world income for the entire year.
If you file dual status, you can't file jointly.
I would recommend filing jointly, reporting world income, and excluding Cdn wages by 2555.
You would need to file 8891 for that year too.
If you file dual status, you can't file jointly.
I would recommend filing jointly, reporting world income, and excluding Cdn wages by 2555.
You would need to file 8891 for that year too.
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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springflower
- Posts: 15
- Joined: Sat Oct 30, 2010 8:49 pm
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springflower
- Posts: 15
- Joined: Sat Oct 30, 2010 8:49 pm
Hi Nelsona,
I have another question regarding my husband’s residence status in 2008 in Canada.
As mentioned (see more detail information above), my husband left the Canada in Feb. 2nd 2008, I left Canada in Dec. 8th 2008. My daughter and my parents lived with my husband in a rental home most of time in 2008. We have a house in Canada in 2008 and put it for sale on Nov. 2008. In 2008, I planned to quit my job in Canada asap and move to US finally.
I sent a form to IRS to decide our residency status in 2008. They decided that both my husband and my departure date is Dec. 8th 2008. So both of us filed Canadian return as a resident and filed US return jointly as resident.
1. However, I am not very convinced that my husband is a Canadian resident in 2008. I think he has stronger tie in US and is a deemed resident in US, so he should be a non-resident in Canada in 2008.
2. If he amends his Canadian return without world income as non-resident, he can get most of Canadian tax back. Does Canada have similar Foreign earned income exclusion like 2555?
I have another question regarding my husband’s residence status in 2008 in Canada.
As mentioned (see more detail information above), my husband left the Canada in Feb. 2nd 2008, I left Canada in Dec. 8th 2008. My daughter and my parents lived with my husband in a rental home most of time in 2008. We have a house in Canada in 2008 and put it for sale on Nov. 2008. In 2008, I planned to quit my job in Canada asap and move to US finally.
I sent a form to IRS to decide our residency status in 2008. They decided that both my husband and my departure date is Dec. 8th 2008. So both of us filed Canadian return as a resident and filed US return jointly as resident.
1. However, I am not very convinced that my husband is a Canadian resident in 2008. I think he has stronger tie in US and is a deemed resident in US, so he should be a non-resident in Canada in 2008.
2. If he amends his Canadian return without world income as non-resident, he can get most of Canadian tax back. Does Canada have similar Foreign earned income exclusion like 2555?
For 1040, a Cdn can always file a 1040 even if he doesn't live in US. BUT he must report world income on it. You filed a joint 1040 but you apparently did not report world income for both of you. Filing a 1040 doesn't make you non-resdient of canada
For Canada, there is little question that your husband became US tax resident by treaty the day he moved dowen to work in Feb 2008. That overrides the house and even the fact that you were still siometimes in canada. The problem is that you both chose to file as full year resident. It will probably cost you to change now. What di dyou do for 2009 filing.
For Canada, there is little question that your husband became US tax resident by treaty the day he moved dowen to work in Feb 2008. That overrides the house and even the fact that you were still siometimes in canada. The problem is that you both chose to file as full year resident. It will probably cost you to change now. What di dyou do for 2009 filing.
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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springflower
- Posts: 15
- Joined: Sat Oct 30, 2010 8:49 pm
Hi Nelsona,
We both chose to file as full year Canadian resident in 2008 because we thought we had no other choice. I should come to this forum earlier.
In 2009, we live in US all year. My husband has no income from Canada and worked in US. I have $20k employment income, most of it is vacation pay. I have $10k EI income from Canada and and no employment income from US. We have $5k dividend income from Canada and US. I am working on our 2009 Canadian return and US return now and almost done. I know it is late. No Canadian return for my husband. I will file 2009 Canadian return to include my employment income and choose the residency as Ontario. No need to report the EI income in Canadian return as the EI income has right withholding. We will file 2009 US return jointly as resident with world income.
1. For me, do I have other choice to file other than full year resident in 2008?
2. They will be skeptical if my husband amends his 2008 Canadian return. Then what should we do? Should we amend the 2008 US return to include the world income? Should we amend my husband 2008 Canadian return to non-resident? Or we’d better leave them as is?
Springflower
We both chose to file as full year Canadian resident in 2008 because we thought we had no other choice. I should come to this forum earlier.
In 2009, we live in US all year. My husband has no income from Canada and worked in US. I have $20k employment income, most of it is vacation pay. I have $10k EI income from Canada and and no employment income from US. We have $5k dividend income from Canada and US. I am working on our 2009 Canadian return and US return now and almost done. I know it is late. No Canadian return for my husband. I will file 2009 Canadian return to include my employment income and choose the residency as Ontario. No need to report the EI income in Canadian return as the EI income has right withholding. We will file 2009 US return jointly as resident with world income.
1. For me, do I have other choice to file other than full year resident in 2008?
2. They will be skeptical if my husband amends his 2008 Canadian return. Then what should we do? Should we amend the 2008 US return to include the world income? Should we amend my husband 2008 Canadian return to non-resident? Or we’d better leave them as is?
Springflower
You left in 2008, you should file a departure return for 2008. You should not file at all in canada for 2009, unless you earned employemnt income in canada.
The principla is if you file a Cdn return as a residnt, you report ALL WORLD INCOME. Period. You have misfiled every single return to every jurisdiction since 2008.
The withholding on UI is meaningless unless it was NR tax, which means you were non-resident.
The principla is if you file a Cdn return as a residnt, you report ALL WORLD INCOME. Period. You have misfiled every single return to every jurisdiction since 2008.
The withholding on UI is meaningless unless it was NR tax, which means you were non-resident.
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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springflower
- Posts: 15
- Joined: Sat Oct 30, 2010 8:49 pm
I feel sad when you said that our tax returns are in awful shape. I am trying to fix them.
We both did put the departure date Dec. 8th 2008 on our 2008 Canadian return. Since it was almost the end of the year, I didn’t pay attention to it. I think the quicktax software should take care of the deduction and credit, etc. We didn’t have other things to report on the departure return. We have RRSP account and a house, which are exemption from the report. Besides that, I had some investment loss, which I totally forgot about them at that time. I had a RESP account ~$10k with loss and an employer sponsored stock purchase plan ~$10k~20k, which became almost $0. Besides that, we don’t have any other non-retirement account in 2008. The house was sold in 2009 and all the money goes to the joint non-retirement account, which I mentioned above.
As you suggested, to fix our 2008 US return, I need to add world income and use 2555 to claim part of them as exclusion and the rest of Canadian income goes to 1116. To fix 2008 Canadian departure tax, I can amend and add the investment loss to my departure return. If I can claim the loss in 2009 Canadian return (can I ??), then I don’t need to amend my 2008 return. If we want to amend my husband’s departure date as Feb. 2nd 2008, then he only report the Canadian employment income and don’t need to report his US income after he departed.
As to the 2009, I received Canadian employment income while I was in US. This employment income will be reported in US return. According to T4058, I don’t have to file the 2009 Canadian return. However I want to file the 2009 Canadian return if I can, because I can get most of Canadian tax back if I do so, while I can only get small amount FTC in US return. Do I have the choice to file the 2009 Canadian return? If I can, according to T4058, I should put the residency as Ontario. The EI has NR withholding tax, I am not sure if I need to report EI income in the return. I called IRS 3 times, they gave me three different answers. ;(
Please confirm if my above plan are doable. I plan to do some consultation on my 2008 and 2009 tax, fix them by my self, then have a cross border tax professional to review them.
Thanks,
Springflower
We both did put the departure date Dec. 8th 2008 on our 2008 Canadian return. Since it was almost the end of the year, I didn’t pay attention to it. I think the quicktax software should take care of the deduction and credit, etc. We didn’t have other things to report on the departure return. We have RRSP account and a house, which are exemption from the report. Besides that, I had some investment loss, which I totally forgot about them at that time. I had a RESP account ~$10k with loss and an employer sponsored stock purchase plan ~$10k~20k, which became almost $0. Besides that, we don’t have any other non-retirement account in 2008. The house was sold in 2009 and all the money goes to the joint non-retirement account, which I mentioned above.
As you suggested, to fix our 2008 US return, I need to add world income and use 2555 to claim part of them as exclusion and the rest of Canadian income goes to 1116. To fix 2008 Canadian departure tax, I can amend and add the investment loss to my departure return. If I can claim the loss in 2009 Canadian return (can I ??), then I don’t need to amend my 2008 return. If we want to amend my husband’s departure date as Feb. 2nd 2008, then he only report the Canadian employment income and don’t need to report his US income after he departed.
As to the 2009, I received Canadian employment income while I was in US. This employment income will be reported in US return. According to T4058, I don’t have to file the 2009 Canadian return. However I want to file the 2009 Canadian return if I can, because I can get most of Canadian tax back if I do so, while I can only get small amount FTC in US return. Do I have the choice to file the 2009 Canadian return? If I can, according to T4058, I should put the residency as Ontario. The EI has NR withholding tax, I am not sure if I need to report EI income in the return. I called IRS 3 times, they gave me three different answers. ;(
Please confirm if my above plan are doable. I plan to do some consultation on my 2008 and 2009 tax, fix them by my self, then have a cross border tax professional to review them.
Thanks,
Springflower
If you filed a departure return in 2008 for canada, you both had to report world income until that date.
Your are probably not allowed to file 2555 for 2008, because you were in US most of the year.
For your 2009 employment income, wheter you need to report depends on how your Cdn employer reported the income to you. It could be considerd Cdn-sourced.
I'm not answering any more Q's on this.
Your are probably not allowed to file 2555 for 2008, because you were in US most of the year.
For your 2009 employment income, wheter you need to report depends on how your Cdn employer reported the income to you. It could be considerd Cdn-sourced.
I'm not answering any more Q's on this.
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