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David,
From your website it looks as though your firm is very
knowledgeable in
Canada/US personal income tax issues.
I have a question regarding my personal income tax filing for
last year.
Briefly. I am a Canadian citizen who worked in Texas from Apr
98 to
Oct 2002 on a TN. I transferred to a sister company in
Vancouver
and my family and I established residency on or about Oct 1
2002.
I completed a US Dual-status statement and return for the year
and a
Canadian return for the time I was in Canada. The dual status
of my US
return required me to file "married-filing singly". This cost
me 3 - 4 K
USD mainly due to the difference in tax rates for filing singly
vs
jointly.
Our company has a relocation policy to prevent financial losses
due to
taxation associated with the relocation (e.g. they gross up
taxable
benefits). I told our HR about my increased US tax burden due
to the
relocation and they felt that fell under the tax protection
policy and
could be reimbursed. They want to ensure that my filing was
appropriate
and resulted in the appropriate tax burden. Our US corporate
lawyer
suggested two possible ways I could have filed jointly but the
consultant
with whom he was working required a substantial fee to work on
this case.
(Side note: I would feel infinitely better getting money from
the US gov
as opposed to from my company.)
Would you be able to help in this analysis? Can you give an
estimate on
your fees? Is it possible to refile at this point? Has my
initial filing
indicating that my US residency terminated in October restricted
my
ability to redo the tax based on alternative approaches?
Thanks,
TXXXXX XXXXXXXXXXX
---------------------------------
david ingram replies:
Without seeing the exact details, I would have likely have filed
your return as a joint return for the year and included your
Canadian income on the return. This allows you to file a Joint
return and claim the lower tax rate.
The taxes paid to Canada would then be a foreign tax credit on
the US return and claimed by filing form 1116.
Our fee for preparing the Canadian and US return in this case
would likely have been on the $700 to $1,000 CDN range with over
half of them being $700.00 (mutual funds, dividends, capital
sales, etc. raise the rate.
You can file a 1040X to change the return now.
You can find a fillable 1040X at:
http://www.irs.gov/pub/irs-fill/f1040x.pdf
I have also attached the file.
If you look at the form you will see that you "CAN" change from
married filing separately to married filing Jointly.
Without seeing the paperwork and knowing "just what" is on your
form, I would guess that our fee to file the 1040X would be no
more than $1,000 CANADIAN and could be less.
david ingram - [email protected] <mailto:[email protected]>
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - (604) 913-9123 www.centa.com
<http://www.centa.com>
Cell is (604) 657-8451 (10 AM to 10 PM seven days a week)
US / CANADA / MEXICO
Working Visa and Income Tax Specialists
Be ALERT, the world needs more "lerts"
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