Departing US at end of year - filing requirements

JJDD · Post by **JJDD** » Wed Sep 18, 2013 8:30 am

Hi,
I am trying to understand IRS requirements as I plan my departure from the US at the end of the year. My spouse and I have been in the US for 2 years on temporary work visas which expire at the end of the year.

It is clear that I need to obtain a 'Sailing Permit' from IRS within a month of my departure (current plan is to depart on December 15)

The part that I dont understand is which tax returns I will need file for 2013 taxes. These are the points I would appreciate clarification on:
1) will we need to file a 1040 for the part of the year we were residents ?
1a) Can we file a joint 1040 for this period ? or do we have to do separate 1040s ?
1c) Will we be able to claim the same deductions in the 1040 that we were able to claim last year ? Or are deductions not allowed because we are departing the US ?
2) Do we need to also file a 1040NR for the few days we were not residents in 2013 since we are not departing on Dec 31 ?
2a) Do we need to specify DUAL RETURN on 1040NR ?
3) would the filing requirements change if our date of departure were to be Dec 31 ?

Thanks

JJDD

nelsona · Post by **nelsona** » Wed Sep 18, 2013 9:11 am

Cdns do not bother nor need sailing permits (this is not your day is it?)

1. Of course!
1a. You can only do joint 1040 if you file for the entire year, which you will do, since it makes no sense to file for 15 days of non-resdiency
1c. same deductions. It is a normal return. (what happened to 1b?)
2. No, you are filinbg a 1040 for the entire year.
2a. No. You won't be filing 1040NR
3. No. It wouldn't matter if you left today or 6 months ago: IN THE YEAR YOU LEAVE US, YOU FILE A NORMAL RETURN!!

JJDD · Post by **JJDD** » Wed Sep 18, 2013 10:07 am

Thanks Nelsona.

When you say that Canadians do not need a sailing permit, are you referring to Canadian citizens who will become residents of Canada after departing US ? Or does this apply to Canadian citizens in general regardless of where they will reside after leaving the US ?

I have one more question to be able to understand your answers:
- If we leave on Dec 15th and I file a normal Joint 1040 return for the entire year, how do we notify IRS that we are departing the US permanently on that date, and that the 1040 would be our last tax filing ever ? (note that we will not have to file at all in the US in 2014 as we we will not have any US income)

JJDD

nelsona · Post by **nelsona** » Wed Sep 18, 2013 10:28 am

IRS never requires a sailing permit for Cdns. Don't pay any attention to IRS Pub 519. It rarely applies to Cdns.

You don't have to notify IRS, but a good practice would be to file a 1040NR for 2014, with 0 income. When you fill the info on it, it will become clear that you've left.

But you don't have to do this.

JJDD · Post by **JJDD** » Wed Sep 18, 2013 2:53 pm

Thanks, This is simpler than what I thought.
So say that we depart Dec 15 2013, so we simply file a married/joint 1040 next April for 2013 taxes claiming residency for the full 2013 year (assume there is no income for the last 2 weeks of the year). Is this correct ?.
Would the IRS be able to penalize me for not following their process on departure (eg.. sailing permit, 1040NR for just 2 weeks) ?

nelsona · Post by **nelsona** » Wed Sep 18, 2013 2:55 pm

I've given you my answer. Since you correctly conclude that the matter is simple, why complicate things. Ignore Pub 519.

JGCA · Post by **JGCA** » Wed Sep 18, 2013 7:49 pm

I agree with Nelsona this is the best way to notify IRS that you left in the previous yr by filing a 1040NR in the next year, its simple and the IRS has knowlege of your departure. A personal note many taxpayers assume that because in teh year of departure they provide an entry date on their CND T1 that this has to correspond to teh date thay show they left the US on, it does not bear any consquence at all on the US filing you can still file a full yr 1040 and file teh 1040NR next yr as NIL to inform them.