Deducting Moving Expenses Canada vs US

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KenD
Posts: 12
Joined: Sun Mar 13, 2005 7:02 pm

Post by KenD » Mon Apr 04, 2005 11:37 am

I was only in Canada for ~90 days last year, so I fall well short of the 330. However I'll be using the 2555 forever more (since I don't intend to move back to the US for at least another 15 years).

The 1166 did a good job of wiping out US taxes on my Canadian taxes. So I was able to get my "usual" refund from the IRS. This was helped by having moving expenses this year, and no pesky capital gains.

Ends up I did mess up my Massachusetts return - I misread a Turbo Tax question.

So refunds are exactly what they were last year, so I'm pretty sure I have them both filled out completely.


nelsona
Posts: 16456
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona » Mon Apr 04, 2005 12:17 pm

you are missing the point of 2555.

It does not require that you be out of US for the entire calendar year. It simply requires that you be out if US for A YEAR (330 days of 365). This period can start in december if you wish.

You would PRO-RATE the days of the year to determine how much you would exempt (ie. 90/365 x $80K). You would also have to 'wait' to file 2555 until you meet the 330 day requirement, which would mean filing your 2004 1040 sometime in September -- which <u>is quite alright and done ALL THE TIME by US citizens the year afterleaving US.</u>
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">The 1166 did a good job of wiping out US taxes on my Canadian taxes. So I was able to get my "usual" refund from the IRS. This was helped by having moving expenses this year, and no pesky capital gains.<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

I would really question this as it is mathematically impossible for this to happen.

If you added say $25K of Cdn income to your 1040 (which would have been added at 20+%), there is no way that 1116 will give you much more than 8-10% credit on that income, so you re paying an extra 10%.

You should seriously review how you are inputting 1116, as I fear you are not doing it correctly.

<i>nelsona non grata... and non pro</i>

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