Possible effects of new tax bill on cross-border taxes.

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nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Possible effects of new tax bill on cross-border taxes.

Post by nelsona »

Like to get some feedback on how you think the Trump tax changes will affect cross-border types.

I'll start you off:

Since the Standard deduction is going to become more common that ever, and the exemptions have disappeared, this has 2 impacts that I can think of right off the bat:

1. Emigrants/Immigrants: Dual status or 1040NR filers may have to look more carefully at filing a full-year 1040 in their year of arrival/departure, since this will get them a $24,000 deduction over itemizing. 1040NR and dual status returns are NOT eligible for Standard Deduction.

2. Cdn residents who Commute to work in US: Those who have been filing 1040NR with exemptions may find that they need to look more closely at filing a XXV(2) 1040 Pro Forma return to benefit from the rates created by the larger Standard deduction available on the 1040.

3. Many of you may be taking RRSP/RRIF withdrawals, using the Cdn tax as a deduction rather than a foreign tax credit. For larger withdrawals this may still be viable, but for smaller periodic withdrawals, you may find that the foreign tax deduction along with your itemized deduction won't add up to $24K, so you may simply have to keep building up difficult-to-use foreign tax credits.8
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nikitapunch
Posts: 24
Joined: Wed Sep 02, 2015 10:21 pm
Location: Canada

Possible effects of new tax bill on cross-border taxes.

Post by nikitapunch »

Ran into this now that I have looked through this message board. I have thought about it as I too am a commuter from Canada filing a 1040NR each year.

Live in Canada. I am Canadian with a Canadian spouse and US born children.

But I am not well informed yet on the potential impact.

I am curious about point 2 where you mentioned filing a XXV(2) 1040 Pro Forma return to benefit from the rates created.

I have not heard of this before. Can you kindly expand on that, what this is and what this would entail?

Thank you.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

I'm afraid I'm going to have to let you look that one up, it has been covered many times. I thought you said in other post you were familiar with the treaty?
Since you've had an account here for over 2 years, I'm sure you can search for information on that here.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

And on this thread I was looking for thoughts, not questions.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nikitapunch
Posts: 24
Joined: Wed Sep 02, 2015 10:21 pm
Location: Canada

Possible effects of new tax bill on cross-border taxes.

Post by nikitapunch »

I know only 3 percentages from the tax treaty that can be applied to not effectively connected income. That is my familiarity. Nothing more.

I'll search again. My first search didn't yield hits.

Hopefully someone else answers. I was the only one.
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