I screwed up big time of my own ignorance and laziness. I have not been able to sleep for the past couple of weeks since I realized my errors and would like to fix this as soon as possible.
Here is my situation and hope someone can advise me:
I got married in 2012 and moved to the United States in April for post graduate studies on a J1 (will be here for 7 years). We are both Canadians but my wife also has a US green card so we have been filing a 1040 jointly for the past 2 years (not a 1040NR).
In 2012 our incomes were:
Me - Canada: No income, US: $20,000 employment income.
Wife - Canada: $12,000 employment income, US: No income.
In 2013 our incomes were:
Me - Only US employment income of $35000.
Wife - No income.
We do not own any property or car in Canada. We do not have any financial investments/retirements anywhere (we are young and just starting off). I had let my OHIP card expire back in 2012. My wife's OHIP card has not yet expired (she has not used the card for several years). We do however still have our Ontario driver's licenses and checking accounts (< $1500). We also occasionally visit our friends and family in Canada as we live near the border (one weekend a month). For the years 2012 and 2013 I have not been reporting my US income on my Canadian returns (for simplicity sake, I realize that this was wrong). My wife did report her Canadian employment income for 2012. We have been received GST and triliium credits in our bank accounts which is wrong, we do not need or use them anyway.
I want to file a voluntary disclosure with CRA but I am not sure which path to take.
1) Do I tell CRA that we made US our tax home since 2012 and refile a departure tax with departure date of 04/2012. And return all GST + Trillium credits + Interest. Cancel our drivers license and bank accounts.
or
2) Do we file as Tax Residents for Canada for both years as well and report my US income to Canada for 2012 and 2013 and pay Taxes - Foreign tax credits + Interests + GST / Trillium credits. (Does tax treaty allow to claim both Canada and US as tax homes?).
Which path do I take? Please help!
Depressed. Need advise!
Moderator: Mark T Serbinski CA CPA
While you filed a 1040 for 2012 and 2013, that was a choice you made, since technically you were not a US resident (it was a good choice, but a choice nonetheless).
You remained a Cdn tax resident up until the 2nd anniversary of your J status (your employer should have begun deducting FICA of your paystub), at that point you became a US tax resident and a Cdn non-resident. Your spouse was a Cdn non-resident the day she left canada.
With those 2 points in mind you should be able to fix your 2012, 2013 tax returns and file 2014 departure return for CRA and return any credits you gaot while non-resident.
You remained a Cdn tax resident up until the 2nd anniversary of your J status (your employer should have begun deducting FICA of your paystub), at that point you became a US tax resident and a Cdn non-resident. Your spouse was a Cdn non-resident the day she left canada.
With those 2 points in mind you should be able to fix your 2012, 2013 tax returns and file 2014 departure return for CRA and return any credits you gaot while non-resident.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Othing in your posts talks of anything requiring any special volunatary disclosure program. You underreported in canada and need to fix it.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best