USC college student, internship in Canada

jmv55555 · Post by **jmv55555** » Mon Mar 26, 2012 2:51 am

I'm a 4th year college student in the US, and last summer I worked in Canada. By using a tax deduction for tuition, books, etc, I can make my Canadian tax bill $0.

Do you think it would be beneficial to elect not to use the tuition deduction this year, but to pay Canadian taxes and use a tax credit for these on my US tax return? I am going to work full-time in Canada after graduation in a couple months, and therefore in future years I will be a resident of Canada. According to the IRS website, "[Treaty benefits] generally are not available to U.S. citizens who do not reside in the United States." So I'm thinking that I should roll over and use the tuition deductions in future years when the tax treaty does not apply to me.

Does this make sense? Any comments or suggestions about what to do would be greatly appreciated.

JGCA · Post by **JGCA** » Mon Mar 26, 2012 4:16 pm

You are a US citizen so even if you defer tax on future CND income by holding back tuition fees you will be paying tax on all future income to the US, however you can claim the foreign income inclusion 2555 when you earn salary in Canada in the future the amount will be excluded from US tax so in this case it makes sence to book tuition credits for the future CND tax reduction since the 2555 will exclude the salary in US. So this yr if you pay tax to Canada and book the credits = 15% of the amount booked for future as long as the credit on form 1166 is equal to this amount it seems ok to do so pay the tax and get the cr in Us. You need to do teh return to see how much cr you get vs the tax you paid in CND.

jmv55555 · Post by **jmv55555** » Mon Mar 26, 2012 6:04 pm

Thanks. But is it actually possible to book tuition tax credits for the future? Upon reading this thread it seems like I would have to use up the tuition tax credits before I can claim foreign tax credits:
http://forums.serbinski.com/viewtopic.php?t=6444

JGCA · Post by **JGCA** » Mon Mar 26, 2012 7:38 pm

Yes you have to use them up to reduce tax to zero it seems.

barrymcDonald · Post by **barrymcDonald** » Mon May 07, 2012 8:21 am

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