Hi
My question concerns my situation for filing for 2005. I am a US citizen
with Canadian Resident status as of Jan. 2005 so I know I will be filing my
usual US 1040 plus a separate return to Canada.
I do not work at all in Canada. My income is all US based with 1099's. I am
a performer and do corporate convention dates in the US(1099 reported) and I
do cruise ships(1099 reported).
Is there anything in particular that I should know as far as the best way to
file to save myself the most in taxes? My Canadian wife and I also bought a
house together up here in BC in Dec. 2002.
Thank you.
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david ingram replies:
Cruise ship, County fairs and Corporate shindigs are always fun tax returns.
I guess we do a dozen every year for singers, ventriloquists, musicians and
stand up comics.
Your first tax liability is to the US and any states with a tax return that
you appeared in. California is the most important here.
Your second liability is to Canada. After preparing the proper US forms we
have to convert everything to Canadian funds and prepare a Canadian T-1 with
a T2032 to report your professional income.
I got started in this business 42 years ago by sending Canadian performers
to the US (to play places like the Gate of Horn in Chicago the Mon Ami in
LA, Disneyland and the Hungry I in San Francisco. And then we would bring
in entertainers from the US.
Canada will then give you credit for the taxes paid to the US and states.
There is a problem with the Social Security however. As a resident of
Canada, you will be paying Canada Pension Plan rather than Social Security.
This is under the US/Canada Social Security Totalization Agreement. 99% of
US based accountants would do this part wrong because it doesn't seem
logical unless you work with it all the time. The advantage is that you pay
a LOT less out of your pocket. The disadvantage is that you will get a
smaller pension. However, if you use the money correctly, you can even make
your Canadian Mortgage interest deductible on your Canadian return. Goto
www.centa.com and read the November 2001 newsletter in the top left hand
box,
ANY self-employed person in Canada can make their CANADIAN mortgage interest
deductible and most others can do it as well if they will take the time to
change their investment priorities.
This is also a good question (for a follow-up) for the Sunday Morning
program this week,
Answers to this and other similar questions can be obtained free on Air by
david ingram on the last Sunday of each month.
On the last Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram will be
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Call (604) 280-0600 to have your question answered. BC listeners can also
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Callers to the show and questioners on this board can also attend the
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Interest deductible.
I will be at the seminar following the last Sunday of the month.
------------------------------
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