Dual status tax returns

nelsona · Post by **nelsona** » Wed Jan 15, 2014 7:13 am

Yes a Cdn can ALWAYS file a 1040, even if he has never set foot in US, but since you had to report your income in Canada and were required to pay tax there, would there have been any point? Canada gave you credit for all your US taxes paid, no?

hom3sl1c9 · Post by **hom3sl1c9** » Wed Jan 15, 2014 9:53 am

I was attending college in the US - my cdn income was de minimus

nelsona · Post by **nelsona** » Wed Jan 15, 2014 10:29 am

You are still required to report world income while a Cdn resident, which you were until you became TN.

Have you not been filing Cdn returns?

hom3sl1c9 · Post by **hom3sl1c9** » Wed Jan 15, 2014 6:40 pm

I filed cdn returns but only for small cdn source income...I see now this is a problem

nelsona · Post by **nelsona** » Wed Jan 15, 2014 8:14 pm

yup. Your tax in Canada is probably small, if at all, after you take all your deductions and credit for US tax, but you need to get this all fixed as you are leaving.

hom3sl1c9 · Post by **hom3sl1c9** » Sat Jan 18, 2014 10:47 am

So I went back and checked - fortunately, my preparer did include my worldwide income on my cdn return. My question remains: In 2012 I was F-1 in the US the whole year. I had cdn income <$1000, and US income ~$35k from a summer internship. Wouldn't it likely make sense to file as a US resident for 2012 to get the standard deduction and the education credits? How hard is it to amend a filing status?

Thanks for all your thoughts thus far.

nelsona · Post by **nelsona** » Sat Jan 18, 2014 5:32 pm

How much US tax did you pay in 2012? How much of it did you claim on your Cdn return?

hom3sl1c9 · Post by **hom3sl1c9** » Sun Jan 19, 2014 10:41 am

Paid ~4200 in US tax net of refund. Did not claim any in Canada as I had ample tuition and textbook credits to reduce my tax payable to 0.

nelsona · Post by **nelsona** » Sun Jan 19, 2014 5:32 pm

You didn't have similar credits in US? So your Cdn credits weren't very valuable, as is often the case for Cdn students who then move to US.

So you need to lower your US tax as much as you can by going back to each year and filing more aggressively.

kikilola · Post by **kikilola** » Sun Feb 23, 2014 4:17 pm

I also have questions about filing dual status. My husband and I lived in the US from Jan 1-June 30 in 2013 (J-visa) and moved back to Canada July 1. We had no Canadian or other foreign income for the period we were tax residents in the US. He is technically self-employed and has not paid taxes yet on the Canadian income (the period we were US non residents). His Canadian income was about $40,000. Since we haven't paid Canadian income tax would it be best to file a joint 1040 for the year or should we file the 1040 for the resident half and 1040-NR for the non-resident half? As I understand we can't file jointly unless we file a 1040 for the year and claim the Canadian income because we were both dual status in 2013?

nelsona · Post by **nelsona** » Mon Feb 24, 2014 3:54 pm

How you file in US has no bearing on Canada. You will owe Cdn tax on all income after you returned.

kikilola · Post by **kikilola** » Thu Mar 06, 2014 2:00 am

I understand that we have to pay CDN tax on the CDN income, my concern is if we filed joint in the US that we would owe the US more in tax than if we filed separate as residents and non-residents because of our CDN income and not paying income tax yet. I assume that you can claim income tax paid in Canada towards CDN income listed on an US return. I would be filing taxes first in the US and then in Canada. (Does that make sense?)

For that reason I'm not sure which way is best to file for our US taxes.

nelsona · Post by **nelsona** » Thu Mar 06, 2014 6:31 am

It is suggested that you run both scenarios. if you filed 1040 (for the better overall taxrate) you would use the foreign earned income exclusion (form 2555) on the post-departure earnings.

angela · Post by **angela** » Thu Mar 06, 2014 2:04 pm

Also confused about if I should file the dual status or US resident for the whole year when filing the 2013 tax return.

I worked in Toronto from Jan to Aug 2013. And moved to California at the end of Aug, obtained my green card in Oct, and didn't work from Sept to Dec 2013.

nakubo.1974 · Post by **nakubo.1974** » Thu Mar 06, 2014 2:12 pm

Hi angela, a lot depends on your circumstances.
Whether you are single or married? If married, is your spouse a US citizen.
What your family income was in both countries.
What your available deductions are in the US.
How many kids you have. Did you pay for their university.
etc...

I think you should use online software (I chose TaxAct but Turbotax also works) and run the numbers in both scenarios.

If filing dual status, you cannot file a joint return. You have to file MFS and you also cannot use the standard deduction.