QUESTION:
I am a Canadian citizen married to a US citizen, living in Chicago, and I am
able to be here because I have a TN visa. I haven’t applied for Perm. Res.
in the US because we want to move back to Canada and we have started the
process for my husband to get Perm. Res. in Canada instead. My husband (the
US citizen) is self-employed, and gets 1099’s when he gets paid. We just got
married in August 2004. Should we file a joint return since we are married,
or should we do it separate since he works on his own? Also, he is lazy and
never pays quarterly taxes so he’ll have to pay in a ton. In addition, I
have about $600 in RRSP’s from Canada that I have never claimed on any of my
US taxes (maybe the first year I was here because someone did my taxes), but
every year after that I’ve done them myself and didn’t include them, should
I have? Or should I now? If so, I’ll probably have you do my (our) taxes
because no one down here seems to know anything about this kind of stuff. I
bought $500 of those RRSP’s after I moved to the US upon advice from my
father – shouldn’t have listened! Any advice would be great – thank you!
====================================
david ingram replies:
You are in danger if you cross the border and attempt to go back to the USA.
This is more likely if you go to Cancun or the Bahamas or Jamaica then from
a trip to Canada but if you are travelling with an American citizen spouse
and Homeland Security officer spots a TN married to a US citizen, he or she
will likely pull your TN because the assumption is that you intend to stay
in the US and the rules for a TN are that you cannot be planning to stay in
the USA.
Therefore, if you do leave make sure that you have ALL the paperwork for
your sponsoring him to Canada to prove that you do NOT intend to live in the
USA. That "should" do it, but if I were you, I would NOT cross the border
with your husband.
You should do a joint return with your husband if your incomes are
disparate. By that I mean that is there is a major difference in your
incomes $25,000 and $75,000 as an example, you will save significant dollars
by filing jointly.
On the other hand, if your incomes were $42,000 each, there is no material
advantage and there is often a tax disadvantage (called the marriage
penalty) if you file a joint return and you should file separately
(supposedly the marriage penalty is gone but I have not confirmed this with
my own calculations).
You should also file separately if you are worried about your husband's tax
situation. If you file jointly, you are making yourself liable for his tax
bill and you may not want to do that.
You should report the internal earnings of your $600 RRSP. Seems silly but
the law is clear.
We would be glad to prepare your US and Illinois returns for you.
I suggest that you cash in the $600 now while you are out of the country.
It will cost you 25% tax to Canada but that is cheaper than paying someone
to do the paperwork.
Ask a cross-border International real estate rental mutual funds immigration
non-resident income tax expert - David Ingram 's CEN-TA Services in North
Vancouver BC Canada on It's Your Money CKBD AM600 Fred Snyder's Radio Show
Answers to this and other similar questions can be obtained free on Air
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=========================================
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Res (604) 980-3578 Cell (604) 657-8451
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