Canadian Permanent Resident working in the US on H1B

[lyingstone]

Hi everyone

I am a Canadian permanent resident (Chinese citizen) working in the US on a H1B visa. I started working in the US in March 2012. I am married and have 2 kids. However, my wife and my kids live in Canada due to some concerns about keeping their permanent resident status, while I live in Indiana. Right now, my employer withholds about 30% of my pay as tax deduction. I wonder if I should claim my wife (not working, housewife) and my kids as dependents to change the withholding amount.

I also wonder how I should file my tax next year. In Canada, I have a lot of tuition and textbook credits from previous years, which probably reduces the amount of tax I should pay in Canada to zero for a couple of years. I want to take advantage of these credits. I want to reduce the amount of tax I pay in the US as much as possible. Can you please point out some possible solutions?

Thanks very much!

[nelsona]

By working in US you are actually llosing all those credits, sicne your foreign tax credit (which would wipe oy Cdn tax anyways) won't be used until your tuition credits are used first.

There is no need to live in Canada to keep Cdn PR status (you can leave for 3 years).
If you are really intent on using these credits wisely, you should move to US, and then only use them when you are workking in Canada in the future.

[lyingstone]

Thanks a lor for the reply! But can I claim my two daughters (1 and 3 year old) as dependents? I hope I can reduce the amount of tax I pay in the US by doing that, if allowed at all.

[nelsona]

You can claim whatever you want on W-4, all ot does is determine withholding. Your taxes are determined later, which you should be more intersted in minimizing.

[lyingstone]

Any suggestions on how I should reduce the taxes? Should I file as resident alien or non-resident alien? Thanks a lot!

[nelsona]

Obviously you should be living in US, and thus would be a resident filer.