Canadian citizen in USA on work visa?Income Tax??

Question

Here's the dilemma...

I m a Canadian citizen who moved to USA on TN for work in July 2007. My bank accounts and car is still registered in Ontario.

I m totally confused how would I file income tax for this year. From Jan - Jul 2007 I was in Canada working for a Canadian employer. From Aug 2007 onwards I m in US working for a US company. Pl let me know if somebody can help?? Say I made 35K in Canada and 30K in USA..How would I be taxed.What forms etc...

Thanks in advnace for your help...

ds

Just wanna make more clear that I had resigned from this employer in Canad abefore accepting this job in Canada.

I would be filing with "maried filing jointy" Pl throw light on both USA and Canadian taxes....

Answer 1

You are considered a Canadian resident.

US taxes:
You will file a Non-Resident Alien tax return (form 1040NR or 1040NR-EZ) on your US income only.
If taxes were withheld from your paycheck, you will get a partial refund, since the withholding is based on a full-year residency.
If state taxes were withheld in TN, you also need to file a state tax return. There will be a partial refund.
Get and read publication 519 U.S. Tax Guide for Aliens, linked below.

Canadian Taxes:
You will file a standard T1 return, with all income (both US & Canada) and pay Federal and Ontario Tax
You will claim taxes paid to the US and TN as a Foreign Tax Credit. (see p.14 Foreign Income of the Guide linked below)

It's really pretty straightforward once you follow the instructions. It's just a pain to have to file three times the forms! Good luck!

PS. And yes, I would consider it a compliment that the US thinks you're an alien :)

Answer 2

Canadian Working In Us Tax

Answer 3

You need to file both a Canadian and US tax return. In Canada your taxable income is based on your world income, so you need to file your US return first. Don't worry, you will receive a Foreign Tax Credit for your US tax paid. It is pretty easy. Don't worry, hundreds of thousands do this every year.

Answer 4

You will have to file in both countries. You have to do your income taxes in the place where you made the money. So all the money you made in Ontario will have to be filed with Canada. The rest in the US. It's a pain but that's how it has to be done. I have a friend who lives in Quebec and worked for a summer in Ontario and had to file a separate form for provincial taxes... A little frustrating. Plus you don't pay the same taxes in both countries. I think though that all your pension plan money (At least in Canada) will all be kept together, no matter where you made the money.

Answer 5

Good question.

You will be taxed only on the income you earned in the US. Your pay stub tells you what deductions have been made. Your Canadian employer could not have anticipated that you would be working in the US, so they only deducted Canadian taxes.

You will have to file in both countries for this year.

Go to IRS Web site at irs.gov. Do a search on "local offices" or look for a button or link to office locations. Try to visit an office in person. They are actually pretty helpful. The forms for 2007 should be ready - or will be soon. You can also download the forms fro their Web site. If you have a very simple situation, you can file a 1040-EZ.

Your US employer will provide you a "W-2" showing all your earnings and deductions for 2007. By law, it must be given to you by January 31 of the following year.

Answer 6

You file in both countries. I went through this ordeal last year.

In the US its the 1040NR... Don't forget to also file your US taxes with the appropriate state and even municipalities.

If you are going to pay someone to do your US return, hire someone in the US. The tax preparers in Toronto who do returns are few and far between, and charge an arm and a leg for their services.

Also the CRA may audit you to review your foreign tax credits since you're likely due a refund from the IRS. They did to me. Quite painless. I only had to pay them $20, and waste 2 hours of my time that would have billable otherwise.

Answer 7

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You mean, without paying duty. The answer is C$750, as long as you're away for at least a week.