Working in the US but wife in Canada - tax question

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nobordersNew Member
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Posts: 6
Joined: 3 Jun 2008
Location: US

Working in the US but wife in Canada - tax question

Post Sat Apr 03, 2010 7:32 am

It's been a while since I last posted in the forums, so I wanted to once again thank all the moderators and people contributing to this site for the incredible amount of useful information.

We have a bit of a complicated tax situation. I'm in the US on a H1B visa since last year (entered the US on a TN, switched to a H1B during the year). My wife has a H4 (H1B spouse) but continues to live in Quebec, where she has a full-time job. We had a baby last year (our first!) who was born here in the US - my wife is covered by her employer's health insurance in Canada, and by my employer's insurance in the US (which also covered the birth). We own a house in Quebec, and we just bought a house here in the US - closing is next week, which is why we're late on taxes, needed the HUD-1 copy.

Since my wife still resides in Quebec, and we jointly own the house there, I understand I am deemed a Canadian resident for tax purposes. Therefore, I never closed any of my bank accounts, credit cards, investment accounts, RRSPs etc. in Quebec, since I assume this situation will continue until my wife eventually decides to move to the US (or more unlikely, I move back to Canada, something's gotta give for the sake of having a family life). We also assume that if my wife decides to move to the US but we sell the house in Quebec before the move, we won't be taxed on possible gains from that sale.

Is our understanding correct, that I can file my state and federal taxes here in the US (as married filing separately), then file Quebec and Canada taxes (and likely pay some tax difference there), while my wife will first file Quebec/Canada taxes, then file here in the US? Initially we thought she wouldn't need to file at all here in the US (she was less than 180 days here in 2009), but otherwise we cannot claim the full "homebuyer's tax credit" since I could only do so if I was single. We understand we're eligible for that credit as the US house will be my primary residence, although I wish our situation was simpler.

Does the above sound like the correct way to go? We've asked a couple of tax professionals who weren't 100% sure of everything, and we usually do income taxes ourselves, no matter how complex they are. But we'd certainly appreciate input from someone in a similar situation, or who's generally tax savvy in these forums - thank you!
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mgedeonCanuckAbroad Regular
Posts: 33
Joined: 11 Dec 2008
Location: Los Angeles

Re: Working in the US but wife in Canada - tax question

Post Sat Apr 10, 2010 11:44 pm

I am a Los Angeles based Attorney and CPA who handles cross-border US-Canadian tax matters. Feel free to reach me through this site if you need assistance with your US and/or Canadian tax filings.
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