tee1

Hey

I have searched a few threads but cant find what I need so was hoping someone can help me out please.
Myself and my partner are in BC on a working holiday, we have been hear since oct last year and both have jobs. I want to make sure we're getting taxed the correct amount so am going to file a T1. Am I correct in thinking I should be doing this? The T1 form has me a bit confused, should I tick the non resident box? I'm not too sure what all this 90% of all worldwide income means?
Are we eligiable for the basic personal amount on an IEC?
We're applying for our 2nd visa so may be in Canada for 2 years on the IEC whilst trying for a permant move.

Thanks for any help, these forms have my eyes boggled and I really what to understand whats going on rather than just using a tax company

tee1

Can anyone help? Would be most appreciated Thanks

BTJ

You are likely resident from the day you arrived in Canada, but individual circumstances may make this less clear cut. In a "standard" scenario you need to declare all income since you moved to Canada and any Canadian income from before you moved to Canada. You can claim deduction/credits on a pro rata basis (i.e. if you have been in Canada for 200 days in 2011, you get 200/365ths of the deduction amount).

You may wish to use an online tax return creator like TurboTax http://turbotax.intuit.ca/tax-software/index.jsp since it should take care of pro rating amounts and should simplify things dramatically. You will have to print out the return at the end and mail it as it is your first return though.

You should also consult this webpage: http://www.cra-arc.gc.ca/tx/nnrsdnts...nwcmr-eng.html

Note that you also mail your first return to a different address than a standard return and further details can be found in a pdf here: http://www.cra-arc.gc.ca/E/pub/tg/t4055/t4055-11e.pdf

International Tax Services Office
Post Office Box 9769, Station T
Ottawa ON K1G 3Y4
CANADA

I have never filed a Canadian Tax Return and I am by no means an expert (JonboyE is though) but I think the above should help.

JonboyE

Yes, you both should.

No, you are taxed as a resident for the time you are here. On the first page you will put the date you became resident (October last year).

It is not relevant to your circumstances.

Yes, but it is prorated for the time you were in Canada. I.e. 10,527 x (no. of days in Canada)/365. You also need to prorate the provincial amount.

I agree. It is not worth paying a tax preparer. However, you might want to try some online commercial software like TurboTax or U-File. They are often free if you have low total income (which you will have as you only worked a few months). Even if you don't qualify for a free return you don't have to pay until you are finished so you can work everything out then switch to the forms view and copy it onto a manual paper return.

JonboyE

If you have Canadian sourced income prior to becoming a tax-resident you have to file two returns. One as a non-resident for the first part of the year and another as a resident for the rest.

In the OP's circumstances it is likely that only their personal amounts that need to be prorated.

Steve_

It sounds to me as though you are resident for tax purposes, although depending on where you're from and what the treaty says you could claim to be a non-resident for 2011 given that you were only in Canada a relatively short period, but usually there wouldn't be much point to that if you plan on staying the whole of 2012.

It's relatively easy to say what you should do in Canada, the reason I'm posting is that you should be aware that if you are resident in Canada for tax purposes, you should not be resident wherever you came from for tax purposes (from the point at which you became resident). If that was the UK for example, you should have filed a P85 with HMRC, an R105 with the bank etc. You must declare any income from your home country on your T1 and pay Canadian income taxes on it. If you're only claiming residency in Canada since you entered and started working, you probably don't need to file for a foreign tax credit but there are situations in which you may need to.

Also if this is a temporary stay in Canada and you're from the UK, you may want to pay voluntary NI contributions.

Steve_

Which is why it's a good idea to arrive on January 1st!

tee1

Thanks guys, most helpful as usual