Hi Mr. Ingram,
Thanks so much for your quick response. Just to clarify, my husband
had left Canada in 2004 to permanently work in the US awaiting our
kids to finish school in Canada until June 2004. Just to be clear,
you mentioned that my husband would not be taxable on his U.S. income
for the 2004 year and thus does not need to include it in his 2004
Canadian income tax. Is that correct? We were told that since he
still had ties to Canada (his family) he needs to include 6 months of
his US income in his Canadian income tax. Maybe we were misinformed.
Also, could you quote us a price to complete my husband's income tax
for Canada and US? Thanks again for your time!!
C XXXXXXX
===========================
david ingram replies:
According to the Wolf Bergelt tax case, your husband would have moved
south and ceased to be taxable in Canada when he left.
At the same time, if you were participants in the Home Buyer's
program, leaving Canada generates an automatic deemed tax on the HBP
plan.
If he did not work at all in Canada during 2004, he would only pay tax
to the USA. At the same time, he must file a departing Canada tax
return and file forms T1161, 1243 and 1244 if necessary.
If you and he have left any stocks, a summer cabin, your old house
rented out and a few other things (see the T1161) you may have to pay
a tax to Canada on the deemed disposal or file security for the
future. Note that the usual penalty for failing to file the T1161 on
time is $2,500 (100 days at $25.00 a day) because if you do not do it
on time, you do not find out about it for a year or two.
see:
http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-04e.pdf
http://www.cra-arc.gc.ca/E/pbg/tf/t1243/t1243-04e.pdf
http://www.cra-arc.gc.ca/E/pbg/tf/t1244/t1244-04e.pdf
For more information.
We would usually charge between $700 and $1,400 to file the first
departing tax return. If there is "ONE" W2, no mutual funds, no RRSP
problems and he was there for the whole year, you would be in the $700
range. Add RRSP's and a Mutual fund account still in Canada and you
are closer to $1,000 and if we get into the T1161 status, call it
$1,400 or $1,500. (I am raising it to $750 to $1,500 in March - my
last price increase was in Oct, 2001).
David Ingram <taxman at centa.com> wrote:
-----Original Message-----
From: CXXXXXXXX
Sent: Monday, February 21, 2005 11:42 AM
To: taxman at centa.com
Subject: taxes
Hi,
I saw your email address on the internet and decided if you could
help us. My husband is a Canadian citizen and has moved to the United
States for permanent work. He is here on an H1B status. He has
worked in the U.S. for the whole 2004 year. However, his family (wife
and 2 kids) did not move to the U.S. until June of 2004 and thus we
were told he became a non resident of Canada when his family moved out
in June 2004.
Does he need to pay taxes on the 1st 6 months of 2004 in both U.S.
and Canada? If so, what is the % he owes to Canadian taxes?
Any other assistance relating to Canadians moving to the U.S. and
taxes would be greatly appreciated!
Thanks for your time!
C XXXXXXl
====================================
david ingram replies:
If your intention was to go to the US and you stayed behind to get
the kids through school, sell the house, etc., then your husband is
only taxable in the USA and you should be filing a US 1040 as a joint
return plus any related state tax forms.
If he intended to come back at the end of six months and then
decided to stay and go for a green card, he should likely be reporting
the first six months in Canada as well as the USA.
The Wolf Bergelt case is a good example of why he would not pay tax
to Canada in the first incidence.
You can find it by going to www.centa.com and reading the US/Canada
Taxation section which is about 26 pages.
Answers to this and other similar questions can be obtained free on
Air every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee
Wealth Management and I, David Ingram host a LIVE talk show called
"ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the
internet at
www.600AM.com
Local calls are taken at (604) 280-0600 and Long Distance calls are
taken at 1( 866) 778-0600
Callers to the show are invited to attend free seminars on financial
planning with such specialities as deductible mortgage interest. They
are held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604)
731-8900 for more information.
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 Fax (604) 980-0325
Email to taxman at centa.com
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed
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