TN status, How do I file taxes?

In 2007 I worked a paid internship in the U.S. with TN status. When I file my income taxes in April, what needs to be done? I read something on a website about having to claim a "foreign income". Also, will I need to file taxes in the U.S. as well? If anyone out there has gone through this before I would appreciate any information you can share.

Thank you.

Basically you do it the same way you always do it, file a T-1, declare your income (you'll have a W-2 instead of a T-4, not sure if the CRA accept that, better phone them). You have to file a 1040NR return with the IRS and a Form 8840 so that you don't have to pay any tax in the US.

Hi There:

I too am on TN here in the U.S.

If I file Tax Return here in the U.S., I don't have to file Tax Return in Canada?

Thanks,

Saikrishna

It depends on whether you have declared to the CRA that you are no longer resident in Canada. Generally you'll be better off not paying tax in Canada, but to do that you have to cut basically all ties to Canada (you can keep a bank account but it must have a foreign address on it and you must have told the bank you are non-resident) as the CRA takes virtually any tie to Canada as evidence of residency.

This sounds easy but if you're on a TN-1 and you ever get refused entry then you can be in a serious mess. Because all of a sudden for tax purposes you become a resident of Canada again.

Really it depends on how "temporary" your stay is in the US. The longer you plan on staying in the US, the less sense it makes to remain resident in Canada for tax purposes. If you're staying in the US for a year or less, it doesn't make much sense to bother with it, just file the 1040NR and tell them on the 8840 that you're still paying tax in Canada.