Sent: Sunday, August 21, 2005 9:23 PM To: 'centapede at lists.centa.com' Subject: US state taxes I have a client , a taxpayer resident in Canada , but employed in the US. He commutes 3 times a week to New York. On his pay cheque they are deducting New York State taxes. Should we file a New York state tax return & get these taxes back ? I file a IRS return & he usually owes them taxes , but the state taxes I claim as a deduction from his US taxable Income. NXXXXX ============================================ david ingram replies: You should file the New York State Income Tax return - IT-203 is the correct form. If it results in a refund, the refund is taxable on next year's 1040 or 1040NR. Then, for the Canadian return, you would deduct the amount of: US Federal Income Tax - plus FICA (social security) - plus Medicare - plus New York State to use on line 431 for the purposes of the Foreign Tax Credit on the Canadian Tax Return Something you can consider is that he has the right to file a US 1040 joint return by making the election to include his wife's income and then exempt it or claim a foreign tax credit. The joint rates will lower his (or her federal tax. Of course, it just reduces the foreign tax credit and results in more tax for Canada and the other thing is that if he is telecommuting and part of the money is being earned in Canada, he should be exempting that or deducting it from the US earned income. You should enjoy the little joke included. The difference between the short and long income tax forms is simple. If you use the short form, the government gets your money. If you use the long form, the tax advisor gets your money. David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists Home office at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 9 AM to 9 PM 7 days a week (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com www.centa.com 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 in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included." Be ALERT, the world needs more "lerts" -------------- next part -------------- An HTML attachment was scrubbed... URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/20050822/a193cd1e/attachment-0001.htm
