How to avoid double taxation CAD vs USD

PINOTTPRO · Post by **PINOTTPRO** » Thu Feb 22, 2018 11:45 am

This question has probably been answered multiple times and i'm sorry if it's redundant.

I have dual citizenship and I moved from Canada (Quebec) to the US (Texas) in late february. I have no ties to canada and no assets so I am a non-resident in canada.

I have a T4 and releve 1 for employement in Canada between January and february 2017, and I have a W4 for employement in the US between march and december 2017.

As i don't qualify for form 2555 I am very confused as to how i should file my canadian income on form 1040 and not get double taxed.

I will also file as non-resident in canada.

Please help.

nelsona · Post by **nelsona** » Thu Feb 22, 2018 11:54 am

You probably are eligible for 2555, if you lived in Canada throughout 2016. The period of time to meet PPT can extend backwards from late February 2017 to late February 2016.

But, assuming you still don't meet that test, you would use 1116 to take crdit for your Cdn/QC taxes that you determine on your departure returns.

You will not file as a non-resident of Canada, you will file as a departing resident (an emigrant) with a departure date on your Cdn and QC returns.

nelsona · Post by **nelsona** » Thu Feb 22, 2018 11:55 am

I assume you have been correctly filing your US returns previously? Reporting all world income to IRS and abiding by all reporting rules (FBAR,FATCA,PFIC, 3520, etc)?

PINOTTPRO · Post by **PINOTTPRO** » Thu Feb 22, 2018 11:58 am

I have never filed US taxes previoustly as I have never lived or worked in the US prior to 2017.

nelsona · Post by **nelsona** » Thu Feb 22, 2018 12:57 pm

Yikes. You know that US citizens are supposed to file world income with IRS regardless of where they live? You could be in for some nasty surprises now that you will be filing. They could wonder why you never filed before.

PINOTTPRO · Post by **PINOTTPRO** » Thu Feb 22, 2018 1:02 pm

Hopefully there will be no nasty surprises. I was born and raised in Canada. Wasn't even aware I ever needed to file US tax. Prior to 2017 I never used my SSN.

nelsona · Post by **nelsona** » Thu Feb 22, 2018 1:20 pm

Be prepared. IRS has been focused on off-shore citizens for a few years now. Its not so much the taxes, but penalties for the failure to report foreign assets.

Search for OVDI and streamlined for some threads here.

PINOTTPRO · Post by **PINOTTPRO** » Thu Feb 22, 2018 1:26 pm

Thanks for the info. Unfortunatly for the IRS i have no assets

nelsona · Post by **nelsona** » Thu Feb 22, 2018 3:59 pm

Ha. A Cdn bank account is enough for them.