Canada/US Taxes???

[marlasinger]

Hey guys!

My husband and I are trying to figure out how to do taxes for the first year he's lived in Canada.

Prior to being together we always filed our taxes ourselves, using an online tax program, but this year we will be doing it jointly, so that's a little different. And on top of that we know he has to file something in the U.S.

He just got his U.S. tax forms for the 2 weeks he worked there in 2015 before moving. So he has a very small U.S. $ amount to claim. We started looking into filing it ourselves but got confused. He wants to get an accountant or go to H&R Block but I would really like to figure it out myself so I know what's going on with our money.

Anyone with experience doing this have any information? Or is it really just better to get someone else to do it for us?

Thanks!

 

[MRheaB]

Your Husband will need to file an immigration return for the first year in Canada which declares specific assets that CRA is interested in as well as reports his income for the part of the year he wasn't in Canada and his worldwide income for the period he was in Canada. For the Canadian filing CRA has some really good guides on the subject and if you are comfortable filing your T1 and your return isn't too complicated with investments or trusts etc then it is definitely something you can file yourself.

For the US side, if he is a US passport holder, he will need to declare his worldwide income for the entire year but will receive a credit for any of the CDN taxes paid in the year. 2 returns will be needed a 1040 for the period he was resident and a 1040NR for the period he was not. The 1040NR will have to be filed every year going forward and will report exactly the same amounts as the T1 but will show a credit for the taxes paid to Canada to avoid double taxation.

Hope that helps, and good luck!

 

[keesio]

Anyone with experience doing this have any information? Or is it really just better to get someone else to do it for us?

Cross-border taxes are a big pain. And it is easy to screw up. I strongly recommend finding an accountant that specializes in cross-border taxes (H&R Block also has a few), especially if it will be the first time. Unfortunately, these accountants are pretty expensive but it is best to bite the bullet and get a professional to do it.

I've posted a lot on US tax responsibilities. For more details on what is involved, see my rambling on this thread: http://www.canadavisa.com/canada-immigration-discussion-board/-t184395.0.html

 

[nmclean]

Your Husband will need to file an immigration return for the first year in Canada which declares specific assets that CRA is interested in as well as reports his income for the part of the year he wasn't in Canada and his worldwide income for the period he was in Canada.

For the part of the year he wasn't in Canada, he only needs to report income from Canadian sources.

http://www.cra-arc.gc.ca/newcomers/#whtr