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Hello David:
I am a Canadian citizen working in USA
through TN visa since June 2004. My wife, 3 kids (2 American one
Canadian)
are staying with me in USA. My wife is a landed immigrant and not a
Canadian
citizen yet. We have no property in Canada but do have active credit
cards,
bank account, diving license, medical card. I have applied for H1B and
like to say have no intention going back but I guess have no choice due
to the restriction on the TN visa forcing me to leave the country
within
2 weeks in case of a job loss. I have not filed my taxes to Canada
since
came to USA but continuously filing the taxes for my wife as zero
income
in order to make her immigrant status active. taxman@centa.com
Before asking question, let me confess
that have very little knowledge of taxing and forgive me if even the
question
was wrong.
1). Under above circumstances, do u
think I have a choice to cutoff my links to Canada by canceling the
credit
cards, license and file taxes for my wife separately.
2). If I made a mistake by not filling
taxes in Canada,
- would
that be big loss to me.
- how
can I correct that mistake
- what
would be your fee to help me out.
3). If I make a $900000 yearly as
married
and pay taxes in both countries, how do you think roughly tax breakup
would
be like 30 / 5 percent. Is there a formula to calculate this roughly.
Thank you for your help and time David.
Regards.
-----------------------------------------------------
david ingram replies:
Your wife's PR status remains valid as long as she is living with a
Canadian citizen (you) while out of Canada. Your American born
children are also Canadian. You should register their out of country
birth as soon as possible at http://www.cic.gc.ca/english/information/applications/retain.asp
1. Under Article IV of the US Canada Income Tax Convention, you are
truly tax exempt in Canada. However, your Canadian health card is
invalid and it would be fraud to use it. For it to be valid, any
holder has to physically sleep in their home province more than 183
days a year although Ontario is only 153 nights. Most (not all) states
take away your provincial drivers licence when you get the new state
licence. California, for instance, requires you to get a California
licence within 10 days if you are living and working there. Some states
are 30 days. Therefore, you or your wife are likely driving illegally
with no car insurance.
California requires you to get a CA licence in 10 days and surrender
your out of state licence.
Washington, DC for instance requires you to have a DC licence in 30
days and to surrender your out of state licence as follows:
Converting an
Out-of-State License
A licensed driver who moves to the
District from another jurisdiction is required to convert their valid
out-of-state driver's license to a DC driver's license if residing in
DC for more than 30 days. A DC driver's license is valid for up to five
years for US citizens and may vary for non-US citizens depending on
visa classification. The written test is not required if your prior
license is valid or has not been expired for more than 90 days. The
road test is not required if your prior license is valid or has not
been expired for more than 180 days.
The
former license must be relinquished to obtain a DC License. If you do
not have your out-of-state license in your possession, we will accept a
certified driving record (issued within the last 30 days) reflecting
the license is in good standing and not expired for more than 90 days.
Non-US
Citizens (foreign nationals) may be eligible for a DC driver’s
license if they meet eligibility requirements.
The Patriot Act, Public Law 108-458,
National Intelligence Reform Act of 2004 does NOT allow for social
security numbers to be displayed on driver licenses or identification
cards.
Requirements
You are a resident of DC
You have no outstanding debts to the District of Columbia or unpaid
fines for moving traffic violations in other jurisdictions
You must provide documents from all of the following categories:
- Proof of
Identity
- Proof of
Social Security Number
- Proof of
Current Residency
- Proof
of Ability to Drive
----------------------------------------------------
Realize that if you are in an accident driving with a Canadian licence
and have been living in a state for four years, you are driving without
a licence and your insurance is invalid. This cost one our clients in
Texas over $300,000 two years ago when he was there for four years
driving with his BC driver's licence.
You can access the rules for every
state's drivers licences and vehicle registration rules at:
http://www.usa.gov/Topics/Motor_Vehicles.shtml
The District of Columbia also requires a car there for more than 30
days to get a permit and provide proof of your bone fide residence
somewhere else as follows:
Registration
of Out-of-State Automobiles (ROSA) in DC
What is ROSA?
ROSA
stands for registration of out of state automobiles. Automobiles housed
in the District of Columbia for 30 consecutive days are required to be
registered and display a valid DC inspection sticker and tags when
parked or operated on public space. The Metropolitan Police Department
monitors residential areas for the presence of automobiles not in
compliance with DC registration requirements. If an automobile has been
observed a second time within a thirty-day period, a warning notice may
be issued indicating the automobile is eligible for the issuance of a
citation and/or impoundments unless one of the following actions has
been taken.
- Recurring visitor (frequent short term visits) report to a DMV service
location and prove non-residency by presenting an original lease,
deed or mortgage statement or a utility bill no more than 60-days old.
The documents must be in the name of the registered owner of the
vehicle. Copy of out-of-state license and vehicle registration are also
required. ROSA parking exemption is good for a 180-day period.
- Temporary residents (more than 30 days) must register
their vehicles or apply for the reciprocity permit.
Note: Bring
the warning notice posted to your automobile with you.
What if I don’t
have a lease, deed or mortgage in my name?
You must provide all
of the following:
- A statement from the homeowner attesting to the fact that you
reside at their home.
- A copy of a current utility bill (60 days or less) in the
home owner's name.
- A copy of the home owner's drivers license or non-drivers
identification.
What happens once
I receive the ROSA exemption?
Once you receive an
exemption from ROSA, your vehicle license tag number will be entered
into the District’s ticket management system. The exemption applies to
ROSA enforcement only. All other parking regulations apply. You will
receive a receipt for your records indicating the exemption expiration
date (180 days).
What happens if I
get a ticket for failure to secure DC tags?
You may contest
the ticket by mail or in person. You should present the same
documents presented to receive the ROSA exemption.
What happens after
the 180-day exemption period?
If you receive another
warning notice, you may repeat the exemption process above.
Note:
ROSA is not a parking permit, and it does NOT exempt a vehicle from DC
parking regulations.
---------------------------
I am putting this here to show what must be done is one particular
jurisdiction.
California is 10 days for a driver's licence and 20 days to change the
vehicle licence after taking a job in California.
And yet, at least once a week, I have someone phone me who has been in
California for a year and has not bothered changing their plates or
getting a California Driver's licence (license) because they haven't
had time, or someone said they did not have to or their car would not
pass California Emission rules, or, or, or. Realize that they have no
insurance in this situation.
Every province has different rules as well. As one example, your BC
registration (and insurance of course) is invalid after 60 days when
you move to another jurisdiction to take a job whether it is California
or any other state or province.
Students, on the other hand can keep their Canadian provincial medical
plan and provincial driver's licence and provincial car registration
for up to five years anywhere else provided they do not take a job in
that jurisdiction unless the job is part of the University
course/instruction.
----------------------------------
Back to your question # 2
2). If I made a mistake by not
filling
taxes in Canada,
- would
that be big loss to me.
- how
can I correct that mistake
- what
would be your fee to help me out.
3). If I make a $900000 yearly as
married
and pay taxes in both countries, how do you think roughly tax breakup
would
be like 30 / 5 percent. Is there a formula to calculate this roughly.
----------------------------
david ingram replies:
2. You should have notified your bank that you are a non-resident
and have them deduct 10% tax on any interest they are paying you. If
you have not done so, you should send the CRA 10% of any interest you
have received under Article XI of the US/Canada Treaty. You must also
report any interest or dividends on schedule B of your US return and
you MUST file schedule B if you have any foreign accounts. If you have
an RRSP, you have to file US form 8891 (question 8 on Schedule B) If
your Canadian accounts total over $10,000 or if your Canadian accounts
were $6,000 and you or your wife have another $5,000 in your original
or your wife's original home country, you must also fill out forms TDF
90-22.1 for each foreign account (question 7 on Schedule B). Minimum
penalty for not filling out form TDF 90 if you need to is $10,000. I
have had a 105 year old lady get a $10,000 penalty for not filing. (The
maximum penalty is $500,000 plus up to 5 years in jail).
3. You have no responsibility to file in Canada on your US earnings.
I have spent too much time on this question already. (over an hour
when I charge $450.00 an hour.
If you want more, you should book an hour appointment and expect to pay
me $450 by credit card, etc. In general, I am now quoting $900 to
$3,000 for current US Canada Tax returns, less for catch ups. A more
specific price suggestion can be found further on.
The question was rejected by the system along with 150 others and I
just happened to look at it as I was watching the Clinton - Obama
results in Wisconsin. I answered it because of the chance to make my
point about the drivers licences (licenses), something you did not even
consider.
--------------------------------------------
On February 11, 2008, David
Ingram wrote:
It is very unlikely that blind or unexpected email to me will be
answered. I receive anywhere from 100 to 700 unsolicited emails a day
and usually answer anywhere from 2 to 20 if they are not from existing
clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line
and get answered first. I also refuse to be a slave to email and do
not look at it every day and have never ever looked at it when I am out
of town. e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help
However, I regularly search for the words"PAYING
CUSTOMER" and always answer them first if they did not get spammed out.
For the last two weeks, I have just found out that my own email notes
to myself have been spammed out and as an example, as I wrote this on
Dec 25, 2007 since June 16th, my 'spammed out' box has
47,941 unread messages, my deleted box has 16645 I have actually looked
at and deleted and I have actually answered 1234 email questions for
clients and strangers without sending a bill. I have also put aside
847 messages that I am maybe going to try and answer because they look
interesting. -e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help
Therefore, if an email is not answered in 24 to
48 hours, it is likely lost in space.
You can try and resend it but if important AND YOU TRULY WANT OR NEED
AN ANSWER from 'me', you will have to phone to make an appointment.
Gillian Bryan generally accepts appointment requests for me between
10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los
Angeles) time at (604) 980-0321. david ingram expert
US Canada Canadian American Mexican Income Tax service and help.
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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My Home office is at:
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North Vancouver, BC, CANADA, V7N 3L7
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Disclaimer:
This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing
in this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and
any and all non-contractual duties are expressly denied. All readers
should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist for expert
help, assistance, preparation, or consultation in connection with
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included." e bankruptcy expert US Canada Canadian American
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David Ingram
gives expert income tax service & immigration help to non-resident
Americans & Canadians from New York to California to Mexico
family, estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence & authority.
Phone consultations
are $450 for 15 minutes to 50 minutes (professional hour). Please note
that GST is added if product remains in Canada or is to be returned to
Canada or a phone consultation is in Canada. ($472.50 with GST if in
Canada) expert US Canada Canadian American
Mexican
Income Tax service and help.
This is not intended to be definitive
but in general I am quoting $900 to $3,000 for a dual country tax
return.
$900 would be one T4 slip one W2 slip
one or two interest slips and you lived in one country only (but were
filing both countries) - no self employment or rentals or capital gains
- you did not move into or out of the country in this year.
$1,200 would be the same with one
rental
$1,300 would be the same with one
business no rental
$1,300 would be the minimum with a
move in or out of the country. These are complicated because of the
back and forth foreign tax credits. - The IRS says a foreign tax credit
takes 1 hour and 53 minutes.
$1,600 would be the minimum with a
rental or two in the country you do not live in or a rental and a
business and foreign tax credits no move in or out
$1,700 would be for two people with income from two countries
$3,000 would be all of the above and
you moved in and out of the country.
This is just a guideline for US /
Canadian returns
We will still prepare Canadian only
(lives in Canada, no US connection period) with two or three slips and
no capital gains, etc. for $200.00 up.
With a Rental for $400, two or three
rentals for $550 to $700 (i.e. $150 per rental) First year Rental -
plus $250.
A Business for $400 - Rental and
business likely $550 to $700
And an American only (lives in the US
with no Canadian income or filing period) with about the same things in
the same range with a little bit more if there is a state return.
Moving in or out of the country or
part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the
first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to
$100.00 each.
18 RRSPs would be $900.00 - (maybe
amalgamate a couple)
Capital gains *sales) are likely
$50.00 for the first and $20.00 each after that.
Catch - up returns for the US where we use the
Canadian return as a guide for seven years at a time will be from $150
to
$600.00 per year depending upon numbers of bank accounts, RRSP's,
existence of rental houses, self employment, etc. Note that these
returns tend to be informational rather than taxable. In fact, if
there are children involved, we usually get refunds of $1,000 per child
per year for 3 years. We have done several catch-ups where the client
has received as much as $6,000 back for an $1,800 bill and one recently
with 6 children is resulting in over $12,000 refund.
This is a
guideline not etched in stone. If you do
your own TDF-90 forms, it is to your advantage. However, if we put them
in the first year, the computer carries them forward beautifully.
This from "ask an income trusts tax service and
immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax
returns with multi jurisdictional cross and trans border expatriate
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