XXC version of 1040NR

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adeboloj
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Joined: Fri Mar 24, 2017 10:50 am

XXC version of 1040NR

Post by adeboloj »

Also, if you are a Cdn resident, and you do think you need to reduce your US tax, you should be looking at filing a XXV version of 1040NR, which you can read about in other posts.

Nelsona, above is one of your comments, please could you refer me to earlier posts on this topic? I am a Cdn resident and might be paying too much tax on my U.S income so i need to know how to go about my tax next year...
nelsona
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Post by nelsona »

You will have to search
Are you married’? It only applies to couples
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
adeboloj
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Post by adeboloj »

I have searched AND HAVENT seen anything but will keep trying...am trying to understand why CRA did not allow all my foreign tax paid to U.S government (just worked 7 months in the U.S in 2016), I am afraid of same thing happening to the foreign tax credit for 2017 since i pretty much worked the whole year and dont want to end up with CRA disallowing a higher portion of the foreign taxes.

To your question, yes I am married (with family in Canada) but I work in U.S. I am thinking of benefits of filing 1040 as against 1040NR and ultimately will have to file resident with CRA since i still have a strong tie in Canada.
nelsona
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Post by nelsona »

Yes, we already went through this discussion last spring.

Wgeb you sat "disallow" your US tax credit, do you mean that they lowered the amount you tried to claim, or that the math resulted in the amount you were allowed to claim was less than your total tax? These are two different issues.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Post by nelsona »

And I'm quite sure, like last spring, if you search for XXV and 1040NR you will find dozens of posts on this topic.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
adeboloj
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Post by adeboloj »

Hello Nelsona,

I read in one of your previous tread which stated "Unlike US, Canada does not allow carry forward of unused non-business foreign tax credits" Does this means I can carry forward my unused non-business foreign tax credits with IRS or this will simply be a tax amendment.

Here is my scenario:
I filed with IRS for 2016 tax but used form 1040NR-EZ, unfortunately I was not able to get all tax benefits i.e. deductions which i wasn't aware until i filed with CRA, CRA only allowed certain portion of my foreign tax paid to the U.S government so after going through so many information on 1040NR using Article XXV, I noticed as married Canadian residents working in the U.S, one could get better tax rate with IRS, with foreign taxes paid (Federal plus FICA), better than what you will get filing with 1040NR.

So my question is, do you recommend i go back and amend my 2016 tax with IRS since they allow unused non-business foreign tax or how do i go about this, or do i just leave my 2016 tax as-is but able to carry forward the un-used portion of my foreign tax next year.

Secondly, when using form 8833 for 1 (b), Articles on residence to override having spent more than 183 days in the U.S and also if one need to use same form for Article on XXV to lower U.S tax rate, can i put these two (2) together on one form or two separate 8833 forms has to be filled out for each treaty am claiming.

Thank you for your response.
nelsona
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Post by nelsona »

You have no claim with IRS for foreign tax credits. Your claim is with CRA.

As I said, you can only claim FTC for 2016 for taxes owed in 2016, you can't carry forward any FTC on your Cdn tax return.

So, again, did
(a)CRA DISALLOW some tax, because they said it was not legitimate, or
(b)did you, when calculating your FTC, find that you could not use all the US taxes.

If it is (a) what reason did they give, and, yes, you should reduce your taxes using XXV for 2016.
If it is (b) then, yes, you should be using XXV to reduce your tax for 2016.

You would amend your 1040NR, and your Cdn tax return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
adeboloj
Posts: 73
Joined: Fri Mar 24, 2017 10:50 am

Post by adeboloj »

Thank you for your quick response, maybe I use the wrong words, what I meant by going to IRS is that, is it logical to back and re-calculate my 2016 tax return starting with IRS using form 1040NR with XXV Article as this wasnt taken into consideration when I filed my U.S taxes? I only used 1040NR-EZ and couldnt take all the exemptions i needed for U.S tax break!

As per your question, (b) is applicable, I found out when calculating FTC am not able to use all the U.S taxes paid on income tax.

So If I understand you clearly, I can still go back and amend my 2016 U.S tax return with IRS (already concluded in April 2017) using Article XXV with 1040NR then will have to amend Cdn tax return too? OR this recommendation is going forward for 2017 taxes due April 2018.

As i discovered now, I will get more refund from IRS if i had use XXV to reduce my 2016 U.S tax rate and if so, do i then go to CRA and inform them i amended my already concluded tax return with IRS so they can amend Cdn tax return as well?

Lastly, you did not respond on my questions on the 8833 form, is one form ok for both Article XXV and Residence or I need two 8833 forms separately.

Thank you
nelsona
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Post by nelsona »

You have my answers. You should have taken care of this when you asked me earlier this year. You can certainly do it now.

Re-read my answers. One 8833 should suffice.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
adeboloj
Posts: 73
Joined: Fri Mar 24, 2017 10:50 am

Post by adeboloj »

Thank you, I appreciate your response!
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