Canadian commuter greencard - filing strategy for US Tax

jhuang1213 · Post by **jhuang1213** » Thu Apr 14, 2011 9:15 am

Hi, there,
I have been the commuter for 10yr. This year I got green card with commuter status (still living in Canada and commute to US). I'd like to know the options I have to file US tax with commuter green card status. I have employment income and My wife has business and employeement income in Canada and we have 2 young kids. My questions are:

1. Can I still use 1040NR by claiming tax-treaty benefit - what clause to use?

2. If using 1040, do I have choice to select MFJ or MFS status?

3. If I can choose 1040 MFS to avoid reporting my wife's canadian income, can I still claim my kids as dependants?

4. If I use 1040 MFJ, what kind of my wife's canadian tax/pension withholdings can be used as credit on 1040?

Thanks
Jin

nelsona · Post by **nelsona** » Thu Apr 14, 2011 12:10 pm

How have you been filing in US up til now?

1. Yes. The residence clause.
2. Yes. MFS will likely result in higher taxes than you can use in Canada.
3. Proabaly
4. Her final taxes can be used, not her withheld tax,, on forms 1116. Her business income can probabaly be excluded using 2555, which would be better than using 1116 on this income.

jhuang1213 · Post by **jhuang1213** » Thu Apr 14, 2011 1:14 pm

Thank you. Nelsona. Can I shoot some follow-up on your answer :) ?

1. Do you know which article of treaty is dealing with "residence"? Do I still need 8833 to declare of using "residence clause"?

3. what's requirement for me to claim kids as my dependants?

Thanks again.
Jin

nelsona · Post by **nelsona** » Thu Apr 14, 2011 1:47 pm

You do need 8833, I'm sure you can find the article you need.

I'm also sure your software can figure out dependents. They will need ITINs.