Canadian on TN visa and taxes
Apr 11th 2001, 2:02 am
#1
Guest
Posts: n/a
Hi,
Just a general question... If you work in the US on TN status, where do you pay
taxes? In Canada or the US or both? I am struggling to find a consistent anwer to
this question. Any help would be appreciated.
Just a general question... If you work in the US on TN status, where do you pay
taxes? In Canada or the US or both? I am struggling to find a consistent anwer to
this question. Any help would be appreciated.
Apr 11th 2001, 7:25 am
#2
Guest
Posts: n/a
If you have cut all significant ties and intend to be out of Canada for two or more
years then you only need to pay US taxes. However, that first year can be a really
difficult year with lots of troublesome calculations for partial this and partial
that and tax returns for both countries. After that you can just pay US taxes.
Stuart
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years then you only need to pay US taxes. However, that first year can be a really
difficult year with lots of troublesome calculations for partial this and partial
that and tax returns for both countries. After that you can just pay US taxes.
Stuart
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Apr 12th 2001, 4:06 am
#3
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Posts: n/a
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You certainly pay US and State taxes, which are on separate forms.In fact you will
pay State taxes to any state in which you earned income.
You will file a Canadian T1 for any year in which you were a Canadian Resident.
Revenue Canada loses interest in you when you cease to be a Canadian resident, which
is why you might want to close your bank accounts, quit your yacht club, rent out
your house etc etc. The form that settles it is NR73, which you can get at
http://www.ccra-adrc.gc.ca/menu/EmenuIET.html. In theory, you send it to them, then
you get a nice letter back saying You Ceased to Be A Resident on such-and-such a
date, and then you fill out your T1 as if you ceased to exist at that date. But I
think you can just include it with your T1 instead.
Bad news part 1: some investments are "deemed sold" and you will need to pay real tax
on the deemed capital gains. This can suck very bad.
For full details see the pamphlet Emigrants and Income Tax at
http://www.ccra-adrc.gc.ca/E/pub/tg/...q/t4056eq.html.
The good news is that if you end up paying to both countries, the payments to one are
a credit on the other. Bad news part 2: most states don't have tax treaties with
Canada so that isn't true of your state taxes.
If you're in the S.F. Bay area I can refer you to the guy in San Jose I use for my
U.S. taxes, he seems to be on top of these issues. There is also the matter of
reporting your (dormant) RRSPs. Not only (bad news part 3) might your State tax you
on the dividends coming into them (remember, they don't have tax treaties with
Canada!), but the IRS wants to know about them too. Something about if you even draw
out of them while you're in the U.S. it's important to have it documented that they
existed before you came here. I dunno, I just give him the papers.
Good luck,
Chip San Francisco, Calif.
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consistent
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You certainly pay US and State taxes, which are on separate forms.In fact you will
pay State taxes to any state in which you earned income.
You will file a Canadian T1 for any year in which you were a Canadian Resident.
Revenue Canada loses interest in you when you cease to be a Canadian resident, which
is why you might want to close your bank accounts, quit your yacht club, rent out
your house etc etc. The form that settles it is NR73, which you can get at
http://www.ccra-adrc.gc.ca/menu/EmenuIET.html. In theory, you send it to them, then
you get a nice letter back saying You Ceased to Be A Resident on such-and-such a
date, and then you fill out your T1 as if you ceased to exist at that date. But I
think you can just include it with your T1 instead.
Bad news part 1: some investments are "deemed sold" and you will need to pay real tax
on the deemed capital gains. This can suck very bad.
For full details see the pamphlet Emigrants and Income Tax at
http://www.ccra-adrc.gc.ca/E/pub/tg/...q/t4056eq.html.
The good news is that if you end up paying to both countries, the payments to one are
a credit on the other. Bad news part 2: most states don't have tax treaties with
Canada so that isn't true of your state taxes.
If you're in the S.F. Bay area I can refer you to the guy in San Jose I use for my
U.S. taxes, he seems to be on top of these issues. There is also the matter of
reporting your (dormant) RRSPs. Not only (bad news part 3) might your State tax you
on the dividends coming into them (remember, they don't have tax treaties with
Canada!), but the IRS wants to know about them too. Something about if you even draw
out of them while you're in the U.S. it's important to have it documented that they
existed before you came here. I dunno, I just give him the papers.
Good luck,
Chip San Francisco, Calif.
Apr 12th 2001, 6:31 pm
#4
Guest
Posts: n/a
Interesting reading, so why does a canadian wants to file Canadian tax at the first
place if he/she intended to stay in the US? Or eventually returning to Canada?
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place if he/she intended to stay in the US? Or eventually returning to Canada?
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Apr 13th 2001, 12:00 am
#5
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Calling Canadian tax advice "interesting reading" suggests you're using a degree of
irony. But I'm going to answer straight.
Let's assume folks want, or at least figure it's wise, to comply with the laws of
their country/ies of citizenship. OK, if you've defected in a shipping container from
a totalitarian government, you're not going to file a tax return. But not everyone's
a bridge-burner and being a tax evader can catch up with you big-time.
The TN visa, which the poster mentioned, is by intention short-term (annually
renewed) and "non-immigrant" in intent, so yes, the official assumption is that the
person is returning home after a period of work. [It's part of the NAFTA pact among
Canada, Mexico and the U.S.] For that matter the other work permits don't last
forever either, so unless you've got your green card or citizenship, you'd better not
piss off too many folks back home.
Now, would the U.S. extradite a Canadian whom the Canadian gov't suspected of tax
evasion? Would such a charge be held against them when they later applied for a U.S.
green card or citizenship? Darned if I know.
Chip
S.F., Calif.
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Calling Canadian tax advice "interesting reading" suggests you're using a degree of
irony. But I'm going to answer straight.
Let's assume folks want, or at least figure it's wise, to comply with the laws of
their country/ies of citizenship. OK, if you've defected in a shipping container from
a totalitarian government, you're not going to file a tax return. But not everyone's
a bridge-burner and being a tax evader can catch up with you big-time.
The TN visa, which the poster mentioned, is by intention short-term (annually
renewed) and "non-immigrant" in intent, so yes, the official assumption is that the
person is returning home after a period of work. [It's part of the NAFTA pact among
Canada, Mexico and the U.S.] For that matter the other work permits don't last
forever either, so unless you've got your green card or citizenship, you'd better not
piss off too many folks back home.
Now, would the U.S. extradite a Canadian whom the Canadian gov't suspected of tax
evasion? Would such a charge be held against them when they later applied for a U.S.
green card or citizenship? Darned if I know.
Chip
S.F., Calif.
Apr 13th 2001, 9:10 am
#6
Guest
Posts: n/a
For most people... You file US taxes for money earned in the US and Canadian taxes
for money earned in Canada.
It gets a little more complicated if you make over $70,000 a year, but the basics
still apply.
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for money earned in Canada.
It gets a little more complicated if you make over $70,000 a year, but the basics
still apply.
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Apr 15th 2001, 7:03 am
#8
Guest
Posts: n/a
in message
[usenetquote2]> > Hi,[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
[usenetquote2]> > Just a general question... If you work in the US on TN status, where do[/usenetquote2]
>
[usenetquote2]> > pay taxes? In Canada or the US or both? I am struggling to find a[/usenetquote2]
>
[usenetquote2]> > anwer to this question. Any help would be appreciated.[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
[usenetquote2]> > Hi,[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
[usenetquote2]> > Just a general question... If you work in the US on TN status, where do[/usenetquote2]
>
[usenetquote2]> > pay taxes? In Canada or the US or both? I am struggling to find a[/usenetquote2]
>
[usenetquote2]> > anwer to this question. Any help would be appreciated.[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
