Dual status tax year

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chris1976
Posts: 5
Joined: Thu Feb 02, 2012 7:28 pm

Dual status tax year

Post by chris1976 »

Hi, congratulations on the active and excellent forum.
I am a Cdn (not US) citizen who moved back to Canada after residing in the US 2000-2012. I think I have the US part of my taxes figured out (1040NR return with 1040 statement etc.) I didn't bother with the sailing permit.

Two questions about completing my Canadian and Quebec returns for 2012: anything to do there for the period before the move? Guide T4055 doesn't seem to indicate anything but other posts on this forum do...
and secondly, I know I have to pay due taxes by Apr.30, but since I had both self-employment income and regular employee wages, do I get to take advantage of the June 15 filing date?
nelsona
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Location: Nowhere, man

Post by nelsona »

sounds fine. Did you look into filing full year 1040 and exempt your Cdn earned income by form 2555? This is oftne better and easier.
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
chris1976
Posts: 5
Joined: Thu Feb 02, 2012 7:28 pm

Post by chris1976 »

Re:2555: I was in Canada less than 330 days in 2012, so n/a right?

I would love some answers to the 2 Cdn qs :) Thanks!
JGCA
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Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

You can file by June 15th since you have self employed income but the tax has to be paid in full by April 30th to avoid interest.

For the number of days in Canada in 2012 will you meet the requirement by April 15th filing deadline if so you can use 2555, if not you can get an extension to file and see if you meet it that way.
JG
chris1976
Posts: 5
Joined: Thu Feb 02, 2012 7:28 pm

Post by chris1976 »

Re: 2555 - can I include self-employment income (working in CAN, US client)? This is mainly to get me the standard exemption, right? Looks like about $500 in tax savings, sound about right?

Re: Cdn returns, anything special to do?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Just so you understand how 2555 works, you need 330 days in the 365-day period after you left. So, as long as you didin't don't visit US for more that 35 days from the day you left, you can prorate the 2555 exemption for the number of days in the remainder of the tax year. So if you moved back to US on JUNe 1, 2012, you can claim 7/12ths of the yearly 2555 limit as excludable.

But to do this, you cannot file your tax return until you have met the 330 days, which, in the example above could only be by May 1 at the earliest. That is why you would need an extension to file your 2012 1040 using 2555.

As to Canada, you are a newcomer, with an arival date. All your investments held on that day take on a nnew value for cap agains purposes. There is a newcomer guide on CRA website. You do not file a "usual" resident return.
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
chris1976
Posts: 5
Joined: Thu Feb 02, 2012 7:28 pm

Post by chris1976 »

Since I moved around Feb. 15 there is no problem filing right away. Still not sure if my other income (dividends, self-employment) throws a wrench in the 2555.

I will look into what is involved with the newcomer filing.
nelsona
Posts: 18684
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

If you moved on feb 15, then I would think your US income woiuld be pretty low, and the tax calculated on your 1040NR would be sufficient. But, doesn't hurt to try both ways.

As to 2555, only erned income is eligible. For dividends interst, cap gains etc, you must use 1116 to takle a credit. Most people need to use both.
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
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