Filing a 1040 for the whole of a renunciation year

416 · Post by **416** » Wed Apr 03, 2013 10:59 am

Is there any down side to filing a 1040 for the whole of a renunciation year, as opposed to a 1040 and 1040NR labelled 'dual-status year'?

The main appeal is that 1) there are fewer forms to deal with and 2) I have professionally prepared 1040s for previous years to template off.

JGCA · Post by **JGCA** » Wed Apr 03, 2013 1:31 pm

You can file a 1040 full year in fact it may be better off than filing the 1040 up to date of renouncing then the 1040NR after for the income while not a USC. File the 8854 form in either case, I imagine you are better off with teh 1040.

Taxpoor · Post by **Taxpoor** » Thu Apr 04, 2013 8:05 pm

This is a very good question ....and let me ask this from a different perspective,,,

I relinquished (not renoucnced) my US citizenship on Dec 12th. So for this tax filing I would RATHER file only one 1040 as opposed to filing both the 1040 and 1040NR.

BUT...if i file a 1040 for the entire year...especially including the days leading to December 31st that I was no longer a US citizen...could the state department throw this back in my face and deny my CLN because I was filing an income tax return (straight 1040) after I had relinquished my citizenship...and in doing so are now acting like a citizen again?

nelsona · Post by **nelsona** » Thu Apr 04, 2013 11:02 pm

No, because you are then using the traty as a Cdn resident, who is always allowed to file a 1040. You would merely attach an 8833 explining use of atriccle xxv(1)

Taxpoor · Post by **Taxpoor** » Thu Apr 04, 2013 11:18 pm

So basically not using form 1040NR forces me into another form 8833?

Is this form mandatory if one decides (in my case) to just file a 1040 for the entire year?

nelsona · Post by **nelsona** » Fri Apr 05, 2013 12:13 am

You asked if you have the right to file 1040. You do, by treaty, 8833 takes 2 minutes.

Taxpoor · Post by **Taxpoor** » Fri Apr 05, 2013 8:40 am

Thanks Nelsona. I suppose this form is quite simple.

The original poster also described avoiding the filing of "1040 and 1040NR labelled 'dual-status year'.

With regards to 'dual status year' I have heard many say that if you file the 1040NR and 1040 in the same year ensure you right "dual-status year" on the top of both forms? Why is this?

I did not see a check box on either form to allow me to indicate a 'dual status year' so is this a necessary step, as I have not seen it addressedd in any IRS form information.

Taxpoor · Post by **Taxpoor** » Fri Apr 05, 2013 8:52 am

Nelsona...i looked up that treaty article and it specifies:

This Convention is generally applicable to persons who are residents of one or both of the Contracting States.

If I have never resided in the United States, would this article still apply to me?

nelsona · Post by **nelsona** » Fri Apr 05, 2013 9:06 am

Every IRS publication that describes dual status ALWAYS states that you write this on the top of the forms. That has always been the rule. That is how they know you are dual status.

For someone who went to the trouble of relinquishing citizenship, you seem pretty off-put to have to do minimal extra steps. What gives?

As to the treaty, I don't know what version of the treaty you are looking at, but the term used in "national" of either country, being a "resident" is no longer requirement . But, regardless, I assume you are a Cdn national and resident, or you wouldn't be on this site. Being a citizen of EITHER US or Canada can apply this part of the treaty.

Taxpoor · Post by **Taxpoor** » Fri Apr 05, 2013 9:30 am

I am unaware of my reluctance to do minimal extra steps, other than form 8833, which, after reviewing it seems pretty straight forward.

I think if you look at my previous post, I was questioning the reasoning behind it for my own peace of mind.

Another issue is that I want to be well informed on this final tax filing as I am in the process of hiring an Accountant firm and want to ensure it is done correctly.

As you know, I have found in the past that a lot of these individuals who claim to be professionals do not know these items as well as yourself, or anyone else on this forum (a fact that baffles me to this day).

The most recent example was during the 8854 form discussion with a large Firm in Toronto, who interpreted the past 5 years of 'US Income Tax Liability" to mean Canadian tax liability.

Maybe I am wrong...but according to my sources (this forum) I would not have any US income tax liability as i did not pay tax in the states.

Regardless, I am trying to educate myself so as to have some working knowlege and a frame of reference when reviewing or questioning work done on my behalf by a 'professional'.

This Firm seems to know what they are doing, so I will most likely turn my direction here.

Again, thanks Nelsona, you are definitley the go-to person to clarify these cloudy bits of information.

nelsona · Post by **nelsona** » Fri Apr 05, 2013 11:03 am

"So basically not using form 1040NR forces me into another form 8833? Is this form mandatory if one decides (in my case) to just file a 1040 for the entire year?"

This sound an awful lot like whining about being "forced" to do something simple.

"I did not see a check box on either form to allow me to indicate a 'dual status year' so is [wiriting dual-status on top of forms] a necessary step"

This also sounded like a reticence to do something quite simple.

That's what puzzled me: your were willing to go thru (or pay for going thru) all the hoops related to relinquishing, but felt "forced" and questioned if other trivial steps were really "necessary.

Just my take.

JJDD · Post by **JJDD** » Tue Sep 17, 2013 9:17 pm

I would appreciate a clarification to the thread above for my specific/similar situation.

We plan to depart the US at the end of December; we will invalidate my L1 visa (and my spouse's L2 visa) at the time of departure.
From the thread above, as Canadian citizens we would be allowed to do a 1040 joint filing for the entire 2013, we would write 'DUAL STATUS' at the top of the 1040, and we also file a 8833. A 1040NR would not be required at all.
Is this the correct interpretation ?

What if we do not become Canadian residents after we depart the US, are we still allowed to file a joint 1040 (DUAL STATUS with a 8833) for the entire 2013 ?

Thanks,

JJDD

nelsona · Post by **nelsona** » Tue Sep 17, 2013 9:55 pm

This is NOT correct.
First, you would be allowed to file a full year return because you lived in US the previous year, not because you are a Cdn citizen, everyone has this right in the year they live. it is not a treaty issue, so no 8833 is filed.

Second, if you file a joint return, you are NOT filing dual status, you are filing full year resident, so you write nothing on the top of 1040.

Third, If you wish to file dual status, then it cannot be joint. And no 8833 is needed.

I think you need to start over your idea, perhaps on a new thread, since your situation has nothing to do with this thread.

JJDD · Post by **JJDD** » Wed Sep 18, 2013 8:15 am

ok thanks.
I will start a new thread to try to fully understand the requirements for this case.