US and Canada 2010 Income taxes
Moderator: Mark T Serbinski CA CPA
US and Canada 2010 Income taxes
We are both US and Canadian citizens. After receiving my US citizenship in Sept 2010, I moved back to Canada and started working again.But, my husband is still iving and working in US. I really don't know how to file our taxes, Canada first or US? Does my huband need to file Canadain taxe since he is still working in US and is a non-resident to Canada? we have one child by the way. Please help!
You came back to Canada you file a tax return in Canada for the time you came to Canada till Dec 31 10. You are also required to file a US tax return since you are a US Citizen on world income but can claim tax credits for any amount paid to Canada and can exclude earned income for US filings.
Your husband does not have to file a CND tax return unless he has CND source income from Canada he will file a US return either as Married jointly with you or Married single .
Your husband does not have to file a CND tax return unless he has CND source income from Canada he will file a US return either as Married jointly with you or Married single .
JG
Since spouse MUST file 1040, it is almost alawys better to file joint 1040 for entire year, and, as JGCA said, exclude your Cdn wages using 2555 and take credit/deduction for your Cdn taxes on other income using 1116.
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Not so fast.
To use 2555 in your case, you would need to establish that you are present in canada for the required time, which would be 330 days in a 1-year period, so the earliest you will be able to file 2555 for the 2010 tax year is some time in August 2011, and then only if you remain in canada (or at least establish tax residency) for that period.
Only then will you be able to file 255 and exclude your Cdn-sourced wages.
So, you will have to file for an extension, explaining that you cannot file until you meet the tax home or physical presence test.
You might simply want to file 1116 for tax credit instead, which you can do as soon as you determine your Cdn tax.
To use 2555 in your case, you would need to establish that you are present in canada for the required time, which would be 330 days in a 1-year period, so the earliest you will be able to file 2555 for the 2010 tax year is some time in August 2011, and then only if you remain in canada (or at least establish tax residency) for that period.
Only then will you be able to file 255 and exclude your Cdn-sourced wages.
So, you will have to file for an extension, explaining that you cannot file until you meet the tax home or physical presence test.
You might simply want to file 1116 for tax credit instead, which you can do as soon as you determine your Cdn tax.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Typically, because -- as a couple -- you have income from both US and canada, 1116 will NOT reduce your US taxes on the Cdn wage to zero, while 2555 will.
So, I would be filing an extension, and eventually using 2555 when eligible, since that is what you will be doing for 2011 as well (you won't haveto wait in that year).
You will of course be filing a joint return with your spouse, so in essence you will both be extending.
If this is a problem because your spouse is waiting on a big refund, you could separate your filings, allowing him to file right now, but this is an error-prone situation, and not to be handled by amateurs.
So, I would be filing an extension, and eventually using 2555 when eligible, since that is what you will be doing for 2011 as well (you won't haveto wait in that year).
You will of course be filing a joint return with your spouse, so in essence you will both be extending.
If this is a problem because your spouse is waiting on a big refund, you could separate your filings, allowing him to file right now, but this is an error-prone situation, and not to be handled by amateurs.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing