Canadian living in the US and commuting to work in Burnaby, BC, Canada

I moved to Blaine, WA in June 2005 on a PR Visa from
Vancouver, BC. I am a teacher in Delta and still am presently
teaching in Canada. Do I file my taxes in Canada, the US or both?

Your information to this question is greatly appreciated.


david ingram replies:

You file in both.

There are three possibilities:

1. If your only income is from teaching, we would just file you as a
Canadian and claim full exemptions.

2. If you have some investment income after you moved to the US, but the
investment income is less than 10% of the earned income, we would still file
a Canadian return with full exemption amounts but would not include the
investment income earned after leaving Canada.

3. If your investment income after leaving was more than 10% of your earned
income we would file a Canadian return showing you as having left Canada,
report all the Canadian earned income and any investment income received
BEFORE you left Canada and pro-rate your exemption amounts based upon the
number of days you lived in Canada.

You say that you have a US PR card which is not a US term. I presume that
you married an American and have a US green card which has the same
standing. If that is the case, you will likely file a joint return with
your US husband. Your joint return would report ALL your Canadian income
and exempt the part earned up to the day you moved to the USA and claim a
foreign tax credit for the tax paid to Canada after you moved to the US on
form 1116.

If you are not married or choose to file as "married filing separately" -
there are sometimes very good reasons - we have a choice of filing two
returns for you. One would be a 1040NR Dual Status Statement return and
the other would be a dual status 1040.

You should likely have us do these first year returns.
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