Hello all,
I noticed Private Messaging is disabled here and it might just be because I am new to the boards and so I'd like to start off by thanking everyone here for the great work helping the average joe/jane in navigating taxes for Canada and the US. In particular I'd like to recognize the efforts of nelsona. I cannot thank you all enough for the wealth of knowledge shared here.
I've done some searching here to find out what I ought to do in terms of filing however I would like to request some additional clarity.
Background information:
I am a Canadian Citizen in the US on a 3 year TN Visa working in IT. I crossed the border with my I-94 on September 24th 2013. I am single with no dependencies/kids etc. I do not own a home in either country, I just rent an apartment in the US and my current home in Canada is my father's house.
From what I can see I should file a Canadian Tax Return, an Exit Return for Canada as well as US Federal and State Taxes.
I am using TaxAct to try and fill out my US Taxes and from researching these boards, I understand I require a 1040 (either the base form or the NR form), a 2555 as well as a 1116. Additionally I am trying to fill in the FinCEN forms since I have a TFSA and RRSP (which I will not be collapsing just yet).
What I am struggling with is how both countries view me. My situation is somewhat similar to this post (answered by nelsona): http://forums.serbinski.com/viewtopic.php?t=8161
I know TN is a temporary issuance and my employer wants me indefinitely. Soon they will progress towards the proper status adjustment. Until such I am a TN worker with my primary residence in the US. Lord willing I do not plan to return to Canada prior to the expiration of my TN Visa.
From researching here the objective for most taxpayers is to pay the least amount of taxes although my goal is to file properly more than anything. On the surface I should be getting a refund back from both countries but more than a refund, I'd like the IRS to be content with my reporting the first time.
The Canadian portion is clear enough and I have my forms completed for the CRA.
So here's where I'd like help if you're willing:
1) 1040 or 1040 NR? - Although I have been in the US since September 24th 2013 full time, I do meet the substantial presence test of 183 days according to the IRS formula (from 2011 to 2013)
2) Foreign Earned Income Exclusion - Am I Bona Fide or do I meet the Physical Residence test? (Would I be considered a Resident Alien for Tax purposes because of Question #1)
3) Anything else I am overlooking
I appreciate any tips, criticism, insight etc. I hope to repay the favor one day. Please feel free to ask any questions.
Humbly yours,
Rommsey
1040/1040NR/2555/1116 forms and a Canadian on TN Visa in USA
Moderator: Mark T Serbinski CA CPA
You should check some of my posts. I'm in the same position as you.
If you have substantial Canadian income you'll be better off filing 1040NR, an added bonus is that it takes the foreign accounts off your back for 2013.
The 1040 and 2555 foreign income exclusion although excludes foreign income it ups your marginal tax rates by the same amount excluded.
If you do 1040 NR no need to worry about TFSAs and RRSPs in 2013. If you file 1040 you'll need 3520/3520A and 8891.
Canadian taxes you just prorate some of your deductions, use the tax form of your province for the year you emigrated and realize all capital gains/losses on the day you left. You do not need to report your US income to Canada since you'll be non-resident on the day you left so that saves you some taxes and taxwork.
If you have substantial Canadian income you'll be better off filing 1040NR, an added bonus is that it takes the foreign accounts off your back for 2013.
The 1040 and 2555 foreign income exclusion although excludes foreign income it ups your marginal tax rates by the same amount excluded.
If you do 1040 NR no need to worry about TFSAs and RRSPs in 2013. If you file 1040 you'll need 3520/3520A and 8891.
Canadian taxes you just prorate some of your deductions, use the tax form of your province for the year you emigrated and realize all capital gains/losses on the day you left. You do not need to report your US income to Canada since you'll be non-resident on the day you left so that saves you some taxes and taxwork.
Bona fide only apples to full years, so that can nevder be used by emigrants in their 1st year in US. You need to meet PPT, for the 12-month period before September.
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
I have a new question. I have opted for the 1040 NR and I am filling out the Federal Schedule OI form and am working on Parts B and L.
For Part B I have entered in the United States and for Part L I am referencing http://www.irs.gov/pub/irs-trty/canada.pdf to determine which article(s) apply for my Canadian income. Do I have to declare this? If so, which articles can I claim this as exempt?
For Part B I have entered in the United States and for Part L I am referencing http://www.irs.gov/pub/irs-trty/canada.pdf to determine which article(s) apply for my Canadian income. Do I have to declare this? If so, which articles can I claim this as exempt?