How to make both CRA and IRS happy?

calvin_g · Post by **calvin_g** » Fri Dec 02, 2005 12:43 am

Hi there,

This has been a great forum. I've learned a lot from other contributors. Thanks to all. I'm still not clear how to file 2005 tax return for my case.

In 2005, I worked for a Canadian employer from Jan/05 to Apr/05. I then moved to US and work for my current US employer for the rest of the year. My wife and kids moved to the US in November 2005. She worked for her Canadian employer before moving south.

CRA will consider me a tax resident because my family was in Canada for almost the entire year, and we own a house in Ontario. IRS will consider me a resident allien since I work and live in the US for more than 183 days.

Questions:
1) Would IRS collect tax on my Canadian income in 2005?
2) Would CRA collect tax on my US income in 2005?
3) If my family live in US in 2006 for the entire year, are we deemed non-resident regardless we have home, bank accounts, credit cards in Canada? Do we still pay tax for non-Canadian income?

Thanks again,
Calvin

nelsona · Post by **nelsona** » Fri Dec 02, 2005 8:07 am

Unless and untlil you sell or rent out you Cdn house, CRA will consider you a tax resident.

Until November, at the least, you must report world income to CRA. It is spossible that from Novemeber you could be 'deemed non-resident' by virtue of having established tax residency in US and meeting treaty stanmdard of centre of vital interests in US. This is a decision that CRA must make, not one made by you unilaterally.

When you sell/rent your home you will be factual non-resident, pure and simple.

So,
1. yes or no, if you decide to file a full year 1040, rather than a dual-status return, you would have to report your Cdn wages. Your wife may have to report hers too. You will of course have to report any Cdn income you made after your US residency start date. I will deal with how to file first year taxes somethime in the new year, and there are previous threads on this.

2. Yes, up until November at least. You should be filing a departure return with a Novemebr departure date, following the guidelines of the Emigrants guide from CRA. If you are going for DNR status (by keeping your home) then you will need to file an NR73 to prove it.

3. You will be DNR form November as indicated above, and then will be treated like a non-resident thereafter, not having to report US income, and paying NR tax on Cdn income.

nelsona non grata... and non pro

calvin_g · Post by **calvin_g** » Fri Dec 02, 2005 4:47 pm

Great answers, Nelson. thanks.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Originally posted by nelsona
I will deal with how to file first year taxes somethime in the new year, and there are previous threads on this.
<hr height="1" noshade id="quote"></blockquote id="quote">

Are you an accountant? I'm down in California. How do I seek your service if I needed?

nelsona · Post by **nelsona** » Sat Dec 03, 2005 12:11 am

nelsona non grata... and non pro

The non-pro means exactly that.

Besides what profession did you think the sponsor of this forum toils in[}:)]