USC/Cdn PR with income from both US & Canada
Moderator: Mark T Serbinski CA CPA
ok gotcha, and thus won't our taxes be just as complicated for 2012 given that we are moving to the states later this year and we will file MFJ. Someone will have to do the exact same complicated paperwork for rrsp, tfsa, etc for the first months of 2012 during which i was resident in Canada correct? Or is it easier?
One other note - I was partially basing my strategy for 2009 and 2010 based on what you said in this thread http://forums.serbinski.com/viewtopic.php?t=6275, which seems to be a similar scenario. She was going to file MFJ in order to reduce her us taxes and he would use FEIE and FTC's to eliminate his us tax. Not entirely sure what the difference is ... but I most certainly do appreciate your input.
That thread has someine moving TO US, making them taxable in US only.
Your wife moved TO canada, making her taxable in canada and US.
Your wife moved TO canada, making her taxable in canada and US.
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
And your taxes will simplify in US because you won't have FTC, you won;t have Cdn mutual funds or ETFs (because you need t oclose any investement accounts) RESPs TFSA.
And you will be living in US, so have no choice but to report your income to IRS, which you now have a choice.
And you will be living in US, so have no choice but to report your income to IRS, which you now have a choice.
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
.. and when you move to US, like the person in the other thread, 2555 goes away, and thus the need to find other methods of reducing US tax.
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
<i>That thread has someine moving TO US, making them taxable in US only.
Your wife moved TO canada, making her taxable in canada and US.</i>
Ok, I guess I am not quote getting something here. Before my wife moved to Canada in late 2010 she only had income taxable in the US and we were married during 2009. That income was not taxable in Canada (and she had no income for the remainder of 2010 after moving here). So similar to that thread, I don't see why my wife couldn't file MFJ and get the benefit of the increased tax brackets and standard exemptions. In both cases, the husband, is remaining in Canada. Like I said, I must be missing something! (though I understand that re-filing and doing all of the reporting for RSP, TFSA, Mutual Funds. etc, etc would be painful - but same thing in that thread too no?)
<i>And your taxes will simplify in US because you won't have FTC, you won;t have Cdn mutual funds or ETFs (because you need t oclose any investement accounts) RESPs TFSA.
And you will be living in US, so have no choice but to report your income to IRS, which you now have a choice.</i>
Yes I understand that once I wind down my TFSA (no RESP, property, Cdn Mutual Funds or ETF's outside of my RRSP) and move stateside the reporting will be much simpler - basically only an 8891 is the goal. But for this transition year, if we file MFJ, will I not have to report my TFSA and other cdn holdings for the time period in Canada before moving stateside? i.e. 2012 US taxes will be as complicated as those that i would have to file if we amended 2009, 2010 and filed 2011 MFJ???
<i>.. and when you move to US, like the person in the other thread, 2555 goes away, and thus the need to find other methods of reducing US tax.</i>
Ah so if we move on Sep 1, 2012, I can't use FEIE for the 8 months in Canada? I have to use FTC's?
Thanks again Nelson!
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Your wife moved TO canada, making her taxable in canada and US.</i>
Ok, I guess I am not quote getting something here. Before my wife moved to Canada in late 2010 she only had income taxable in the US and we were married during 2009. That income was not taxable in Canada (and she had no income for the remainder of 2010 after moving here). So similar to that thread, I don't see why my wife couldn't file MFJ and get the benefit of the increased tax brackets and standard exemptions. In both cases, the husband, is remaining in Canada. Like I said, I must be missing something! (though I understand that re-filing and doing all of the reporting for RSP, TFSA, Mutual Funds. etc, etc would be painful - but same thing in that thread too no?)
<i>And your taxes will simplify in US because you won't have FTC, you won;t have Cdn mutual funds or ETFs (because you need t oclose any investement accounts) RESPs TFSA.
And you will be living in US, so have no choice but to report your income to IRS, which you now have a choice.</i>
Yes I understand that once I wind down my TFSA (no RESP, property, Cdn Mutual Funds or ETF's outside of my RRSP) and move stateside the reporting will be much simpler - basically only an 8891 is the goal. But for this transition year, if we file MFJ, will I not have to report my TFSA and other cdn holdings for the time period in Canada before moving stateside? i.e. 2012 US taxes will be as complicated as those that i would have to file if we amended 2009, 2010 and filed 2011 MFJ???
<i>.. and when you move to US, like the person in the other thread, 2555 goes away, and thus the need to find other methods of reducing US tax.</i>
Ah so if we move on Sep 1, 2012, I can't use FEIE for the 8 months in Canada? I have to use FTC's?
Thanks again Nelson!
[/i]
The point in the other thread was that the US taxpayer was earning income in US, thus did not have available any method to exclude income of use FTC. in such case, it is certainly worth it to file MFJ,
But if the US spouse is working in canada, as in your case, they already have 2555 and FTC at their disposal, so MFJ is of little value at this point. That takes care of 2010 and 2011.
When one is moving TO US, they and their spouse are already in the process of divesting themeselves of troublesome Cdn investments, etc, not taking more on, as your wife was doing in 2009.
And someone moving TO US, and who's spouse will follow, will likely be filing MFJ for a long period of time, so the costs/efforts involve with getting the Cdn spouse compliant with US tax will not be sunk all in the one year. There may never be a need for you to file MFJ, so why do it for one year -- retroactively when we do not know the consequences of what you did back then US tax-wise.
That's my advice. It's your choice.
But if the US spouse is working in canada, as in your case, they already have 2555 and FTC at their disposal, so MFJ is of little value at this point. That takes care of 2010 and 2011.
When one is moving TO US, they and their spouse are already in the process of divesting themeselves of troublesome Cdn investments, etc, not taking more on, as your wife was doing in 2009.
And someone moving TO US, and who's spouse will follow, will likely be filing MFJ for a long period of time, so the costs/efforts involve with getting the Cdn spouse compliant with US tax will not be sunk all in the one year. There may never be a need for you to file MFJ, so why do it for one year -- retroactively when we do not know the consequences of what you did back then US tax-wise.
That's my advice. It's your choice.
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
Hi,
ok, I get the thrust of what you are saying and yes if it was true that she could use 2555 or FTC for 2010 and 2011 then it's not worth it just for 2009. I don't want to beat a dead horse but something seems amiss re. 2010:
You seem to be suggesting that my US spouse could use 2555 and FTC for 2010 and thus MFJ is of little value. She lived in and had income in the US for the first 8 months of 2010 and then immigrated to canada as a PR in Sep, 2010 and did not work for the rest of that year. I didn't think she could use 2555 or FTC for the first part of of 2010 because she a) wouldn't satisfy any 2555 residency requirements and b) she paid no canadian tax (because no income after becoming a resident) and thus there is no FTC she could use ...
so how could she use use 2555 or FTC in 2010??
Cheers!
ok, I get the thrust of what you are saying and yes if it was true that she could use 2555 or FTC for 2010 and 2011 then it's not worth it just for 2009. I don't want to beat a dead horse but something seems amiss re. 2010:
You seem to be suggesting that my US spouse could use 2555 and FTC for 2010 and thus MFJ is of little value. She lived in and had income in the US for the first 8 months of 2010 and then immigrated to canada as a PR in Sep, 2010 and did not work for the rest of that year. I didn't think she could use 2555 or FTC for the first part of of 2010 because she a) wouldn't satisfy any 2555 residency requirements and b) she paid no canadian tax (because no income after becoming a resident) and thus there is no FTC she could use ...
so how could she use use 2555 or FTC in 2010??
Cheers!
Look . I don't memorize everyone's tax situation; you asked me why I recommended one thing to one person. If it doesn't sit well with you, then don't take my advice.
Horse is dead.
All the best.
Horse is dead.
All the best.
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