My_question_is: Canadian-specific
Subject: Taxation in Canada: resident or not?
Expert: taxman at centa.com
Date: Thursday January 11, 2007
Time: 02:52 AM -0500
QUESTION:
I am a Canadian Citizen and I moved to Seattle in April; first on a TN
permit and then switched to an H1B on October 15th. I have a bank account in
Canada solely for the purpose of paying off my student loans and I travel up
to Vancouver for perhaps 1 day a month. I also have a Canadian credit card.
Now as I understand it having a bank account or credit card and traveling to
Canada put me at a risk of being considered a resident for the purposes of
taxation in spite of having spent a total of less than 183 days in Canada
this year. How worried should I be about this? ALso next year I will be
spending less than maybe 15 days overall in Canada but will still have the
back account until I finish paying my student loans (approx. June or so). Do
I run the same risk next year as well? Thank you very much.
-------------------------------------
david ingram replies:
As described, you are a taxable resident of the US and not taxable in Canada
on any income after you moved to Seattle.
The Bank account and credit card are not that important between Canada and
the US because of Article IV of the US / Canada Income Tax Treaty.
For Canada, you have to file a T1 general and show your departure date. You
should also fill out form T1161, and maybe 1243 and 1244.
For the US, you have a choice of filing a 1040 and reporting the Canadian
income and claiming a foreign tax credit on form 1116 OR filing a Dual
Status 1040 and not getting a standard deduction in the US.
Glad to look after them for you.
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 9 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
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