Dear David:
I have been receiving your most informative emails for awhile now and it is
time that I explained our situation to you so we can hire your good services
to help with taxes, eventually moving assets from Canada to the US and other
immigration and health matters.
My wife and I spend our winters at our home in the USA (jointly owned)and
our summers at my house in Ontario.
Wife
Widowed in 2004 after 34 years of marriage; US citizen; retired; all income
from US sources; married me in October 2005. Granted Permanent Residence
status in Canada effective 10 September 2006. Has SIN but has not yet
applied for OHIP. Filed US tax return for 2005 as married but single return.
I assume that she will file tax returns in both Canada and the US for 2006.
We can send you the forms she will receive from social security and
investments during 2006 to meet the deadlines of 15 April in the US and 30
April in Canada.
Husband
Widowed in 2001 after 40 years of marriage; Canadian citizen; retired; all
income from Canadian sources. Filed tax return in Canada for 2005 and 8840
in the USA. Application for US "green card" now being processed,(started 26
October 2006 and expect spring 2007 completion) so will need to file for
2006 in Canada (30 April) as a resident and in the US (15 June?) as a
non-resident. When "green card" approved I assume I will file as a resident
of the US in 2007 and a non-resident of Canada. I can complete Canadian tax
return for 2006 but will need help for US return and for both returns for
2007.
I am aware of the requirement to spend 153 nights in Ontario annually to
maintain OHIP status. So far this has not been a problem.
Our plan eventually is to reside permanently in the US when hopefully we
both have dual citizenship, probably after 5 or 6 years. I have no intention
of trying to escape taxes in either jurisdiction in the meantime.
Can you advise and help us as we go through this process?
Sincerely
------------------------------------------------
david ingram replies:
I can certainly help, that is what I do.
If you are working under the 153 nights in Ontario rule, I expect that the
8840 for 2005 was filed in error. If you are / were in the US for more than
183 days in 2005, you should likely have filed a joint tax return with your
wife or at least a married filing separately return. Your wife could have
claimed you as a dependent if you had no US income AND were not there more
than 183 days within 2005.
"IF" you were there (in the USA) for LESS than 183 days in 2005 and had NO
intention of applying for a US green card during any time in 2005, a 1040NR
with attached 8840 was likely okay. Because of the Canadian application for
PR status for your wife. It would appear that your intention was to live in
Canada.
However, with a US wife, a Green card application, AND I suspect more than
183 days in the US in 2006, you are clearly responsible to file a 1040
return for 2006.
If your wife has not yet applied for OHIP and your stated intention is to
live in the US and she has been in Canada for less than 183 days, she does
not have to pay tax to Canada on her US income although she should file a
Canadian return to tell them that.
I would be glad to look after them for you.
the following is an example of my charges
Phone consultations are $400 for 15 minutes to 50 minutes (professional
hour). Please note that GST is added if product remains in Canada or a phone
consultation is in Canada.
This is not intended to be definitive but in general I am quoting $800 to
$2,400 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two interest slips and you
lived in one country only - no self employment or rentals or capital gains -
you did not move into or out of the country in this year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no rental
$1,200 would be the minimum with a move in or out of the country. These are
complicated because of the back and forth foreign tax credits. - The IRS
says a foreign tax credit takes 1 hour and 53 minutes.
$1,500 would be the minimum with a rental or two in the country you do not
live in or a rental and a business and foreign tax credits no move in or
out
$2,400 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection
period) with two or three slips and no capital gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely $450
And an American only (lives in the US with no Canadian income or filing
period) with about the same things in the same range with a little bit more
if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS
be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part
of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales) are likely $50.00 for the first and $20.00 each after
that.
Just a guideline not etched in stone.
---------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>
Disclaimer: This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing in
this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance, preparation, or
consultation in connection with personal or business affairs such as at
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