Canadian filing on TN Visa status with wife on TD

[HyeHustle]

Hi nelsona, your forum is great!

I was on a F-1 OPT until January of 2010, when I changed to a TN Visa and at the same time, my wife got a TD Visa.

I worked in the US on my TN until July 2010, when I moved back to Canada. I had $0 canadian-sourced income in 2010. My only US income in the US in 2010 was as an employee of a US company.

(For the 2009 tax year, I filed a 1040NR, and claimed deductions for my spouse.)

I do meet the SPT for 2010. Do I file a 1040, a 1040NR, or both (as dual-status)? Also, can I claim any deductions or obtain any tax benefits using my spouse?

Also, I understand that I will have to file a Canadian return for 2010 as well, reporting my US income, but for which I will get a foreign tax credit on my Canadian return. Is this correct?

Thanks, and I look forward to your response.

[nelsona]

The real question is if you were wever resident in US.

As you proabably know, your time on F-1 does not count towards SPT, and given the fact that you continued to be tax resident of canada from beginning to end of 2010, I would be merely filling out a 1040NR to figure my US tax -- and state NR tax return as well.

Then I would fill my Cdn tax return. If I was using up all my US tax (IRS, stste and fica) on my Cdn return (by foreign tax credit), then I would file the 1004NR and be done with it.

Only if I had US tax left over on my Cdn return would I think about filinga a full year joint 1040 (you can always choose to do this -- it cahnges nothing for Cdn tax) and lower my US tax, proabably to level that would make you owe some in canada

[HyeHustle]

Thanks, but what would be the advantage of lowering my US tax liability by filing a joint 1040 if I would still have to pay the difference to Canada?

Also, am I able to file a 1040NR-EZ, given that my onlyu income is from one source of wages?

The filing state has no state income tax. I would only be filing a federal return. I read somewhere that there are some deductions you can claim on your federal return for state sales taxes paid during the tax year?

[nelsona]

Re-read my post.

I said I would only try to lower my US tax rate by filing a 1040 instead, if I were NOT "using up all my US tax (IRS, stste and fica) on my Cdn return".

That would mean my Cdn taxrate was lower than the one from 1040NR. 1040NR is always taxed at the highest possible rate, especailly for mariied people.

You want to at least come out with some tax liability in Canada as proof that you have lowered your US taxrate sufficiently.

[HyeHustle]

Thanks. So, is it advisable to use the 1040NR-EZ?

[nelsona]

I'll let you figure that out. That's mechanics.

The more important thing is to do your cdn taxes so you can figure out what your US tax target is.