Dimple,

I am not sure where u read that u cannot be tax resident of 2 countries..

I dont think IRS cares if u file taxes as a resident if u meet the criteria of number of days presence in USA. Non resident taxes is higher than resident taxes in USA.

For Canadian taxes u have to show foreign income and claim credit for foreign taxes u have paid and pay the difference.

Reading about these cross border tax rules makes my head spin.. i think ur best bet is to hire accountant or call CRA if u want to save money.

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Originally posted by Fido

Just curious - why would you wish to pay taxes in Canada when you cut your tax related ties & be exempted from Canadian taxes ?

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Dimple2001

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Originally posted by dudewheresmycar


Dimple,

I am not sure where u read that u cannot be tax resident of 2 countries..

I dont think IRS cares if u file taxes as a resident if u meet the criteria of number of days presence in USA. Non resident taxes is higher than resident taxes in USA.

For Canadian taxes u have to show foreign income and claim credit for foreign taxes u have paid and pay the difference.

Reading about these cross border tax rules makes my head spin.. i think ur best bet is to hire accountant or call CRA if u want to save money.

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Dimple2001

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Originally posted by cdn_dude

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Originally posted by dimple2001

Is it possible to get into a situation where you could be treated as a tax resident of two countries?

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-- Yes. If you are a US resident, then file your US taxes and you could claim the foreign tax credit (Tax paid in the USA) on your Canadian return.

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For example, I have all sorts of ties to Canada, hence naturally a tax resident of Canada. However, I am working and living in New York state. The US tax forms state if I am living for more than certain days, it would make me a tax resident of US.

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-- You could be a factual resident of Canada. You might want want to see this:

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/tmprry-eng.html


--Also, if you are filing US 1040 as a resident, do not forget to file form 8891 (if you have Canadian RRSPs).

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Dimple2001

Reading the 2 articles u do seem to have a choice to file resident or non resident in usa , if u have met the residency criteria.


http://www.irs.gov/pub/irs-pdf/p519.pdf

http://www.howlandtax.com/articles/tnvisa.htm

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Originally posted by dimple2001


You are right. IRS may not care if you file 1040 as opposed to 1040NR if I legitimately qualify as US tax resident. I don't think Canada will care if I file 1040 or 1040NR in the US as long as I file Cdn taxes properly. To date, for several years, I have filed 1040NR and T1, keeping it straight....as a US non-resident and Cdn resident. 2011 might be different and hence exploring.

Also, as a US tax resident, I can contribute to IRA which as a non-resident is not possible. Will Canada take an exception to that since as a Cdn tax resident, I can contribute to RSp as well? Another thing, as a Cdn resident, you get 15% on US dividends and 0% on US capital gains. As a US tax resident, those percentages are different. So, there is more to it than just filing taxes. Anyway, I've got few months to work it out.

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