Taxes - TN Visa, still confused

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jefferysmith38New Member
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Posts: 5
Joined: 22 Aug 2008
Location: Montreal

Taxes - TN Visa, still confused

Post Sat Apr 11, 2009 10:43 am

I read many topics in the forum but I am still confused. here is my situation.

I have been working in USA since december 1st, 2008 under TN status.
My family is still in canada, still have bank account, credit card with canadain bank.

1. Am I considered in US as a nonresident alien, or a resident alien?
2. Which tax form do I have to fill for US?
3. Are there different forms for US federal and State?
4. What is the dealine to do that in US?
5. Do I have to ask for refund of US tax from Canadian gov. or from canadian province, or from US gov. or from US state?
6. Do you know an accountant who can take care of both canadien and US tax

thanks
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StevenCanuckAbroad VIP
Posts: 3635
Topics: 2
Joined: 28 Sep 2007
Location: Calgary

Re: Taxes - TN Visa, still confused

Post Sat Apr 11, 2009 5:14 pm

jefferysmith38 wrote:1. Am I considered in US as a nonresident alien, or a resident alien?


Up to you, but given you were only in the US a month last year, it's going to be simpler to file as non-resident. You need to file a 1040NR and an 8840 to declare your US-source income from your W-2 and anything else that's relevant.

Read this: http://www.cra-arc.gc.ca/E/pub/tg/p151/README.html

Also read IRS publication 519 for more information. You can alternatively file as dual-status if you want to, will probably save you a bit of tax but for one month I personally don't think it's worth the effort. The bits about dual-status filing and how income tax is applied to things like bank interest are probably what you need to concentrate on.

3. Are there different forms for US federal and State?


Sure are, if you live in a State with State income tax.

4. What is the dealine to do that in US?


Wednesday. Better get cracking. You can file for an extension. If all you have is a W-2 then 1040NR is straightforward and 8840 is simple as well. Can't comment on the State return, but most States are usually fairly easy.

5. Do I have to ask for refund of US tax from Canadian gov. or from canadian province, or from US gov. or from US state?


You don't get it refunded, it's theirs. You have to file a T1 and with the T1 for 2008 you file for foreign tax credits using T2209 and T2036, which you complete using your W-2 (converted into Canadian dollars). The general guide for the T1 explains how to do this. Given that Canadian rates are higher you will probably pay some additional Canadian tax. FICA withholding can also be claimed as a foreign tax credit due to the tax treaty provisions.

If you're planning on staying in the US for a lengthy period of time you may want to move your tax home there, so you declare on your T1 that you left on 31st December. This saves you filing as dual-status and next year you just file a 1040 like most people do. However as you will see by reading IRS publication 519 if you then move back to Canada later moving your tax home out of the US requires a substantial amount of paperwork.

6. Do you know an accountant who can take care of both canadien and US tax


Not by Wednesday!
Steve.
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