Tax Query, Fed Withholding, ITIN, Canada/US

[agnelson]

Couple of errors:

1. One simply cannot under any circumstances file a joint return on 1040NR, neither by IRS regs nor by treaty. It is incorrect to use any other tax table than the ones provided by IRS for 1040NR, which does not include MFJ. You can file single and use the single table, if you are single; or file MFS, using the MFS table if married. Period.


2. Cdns residents do not have some special benefit of using any table from 1040 when they file 1040NR.

What Cdns can do, by IRS regs (backed-up by treaty), is include spouse and children living in canada as dependents for the purpose of the exemption. So can Mexicans and Koreans.

Maybe the confusion comes from the right a married Cdn resident working in US has of filing a non-discrim 1040NR, (based on treaty Article XXV) whereby -- in addition to preparing a normal MFS 1040NR using the MFS table -- the couple prepare a pro forma (fake) 1040 MFJ (not 1040NR) and report ALL world income, and use all the exemptions, deductions and credits available on 1040 (except foreign tax credit) to come up with a preferential taxrate. That taxrate is then applied to the US-source income reported on the 1040NR, and if favourable, the final US tax is calculated on that taxrate, overriding the 1040NR tax calculated from the 1040NR MFS table.

Final note: Remember that this applies only to a Cdn working in US who is still resident in canada, and thus is still filing a Cdn tax return, so it is not always necessary to squeeze one's US tax rate to its absolute minimum, since at some point, lowering one's US tax is merely raising one's cdn tax by the same amount.

[Steven]

Couple of errors:

1. One simply cannot under any circumstances file a joint return on 1040NR, neither by IRS regs nor by treaty. It is incorrect to use any other tax table than the ones provided by IRS for 1040NR, which does not include MFJ. You can file single and use the single table, if you are single; or file MFS, using the MFS table if married. Period.

You can if one person has no income. Or is below the reporting limit. Pretty common for e.g. students to do it because their spouse will be F-2 and not have work authorization so their income will likely be minimal.

Have to say I haven't read further back in this thread so I'm not entirely sure what the original question was!

[agnelson]

This is not considered a joint return, it is an MFS return, where the other spouse simply does not file their own MFS return.

The MFS table is used, which typically yields higher taxrate than for an MFJ return with the same total income.