Tax Advice?

[Rinnerz]

Can you please explain this better? Was I supposed to file a tax return in 2009 for my 2008 tax year in the US just because I earned $70... Would be nice to be notified when or if you are supposed to instead of having a chance of owing tons of money when I am already broke. Also since I have not worked since being in Canada in March 2009, do I still need to file a tax return with the US and Canada for that year? Ugh I am so confused so if you would care to explain this a bit better, I would greatly appreciate it.

I'd like a clarification on this as well, since I am in a very similar situation. I'm a US citizen who was raised from the age of 7 completely abroad. Due to various reasons (culture in the country I was raised, overprotective parents, then eventually health issues) I really have not had an actual job at any one point. I did "work" in a student-only writing center job on campus at my university (an American university, the pay was very low and only part-time), but no one ever mentioned filing US taxes to me for anything. This includes my father who, when I brought it upto him this year, said, "Oh yeah--you have to file US taxes abroad. I do. But you don't really end up paying anything."

... And it's been over 4 years since that "job" in university, and I haven't worked at all. (Again, mostly due to health and personal reasons.) I'm just really confused about whether I should have been filing (despite no income), and HOW exactly I'm supposed to file to begin with. I haven't the faintest idea how any of this works. I definitely plan to be working in Canada whenever my PR process goes through (hopefully!), at which point I assume I will definitely need to file US taxes?

Yes... I agree that it would have been nice to have been told something when I got old enough to have to deal with any of this.

 

[Love_Young]

Rinnerz, it is amazing how much we have in common though. Hopefully we get the answers we are looking for.

 

[Rinnerz]

Rinnerz, it is amazing how much we have in common though. Hopefully we get the answers we are looking for.

Indeed!

 

[Stumpedmom]

I am going to make contact with a family friend who is licensed to do income taxes here in Canada. Not sure if the help will be of much use to the Americans seeking advice, but I will post the information that I get from her for doing it as a Canadian. I am Canadian, my husband is American, and I have already been put in a bind because CRA gave me wrong information back in September, so I do NOT trust them anymore!!

Will post more information once i get it for people!!!

 

[YorkFactory]

Love_Young and Rinnerz, all of the advice I've seen is to file returns every year that you live outside the U.S., even if you don't have to, so that they don't ask you years later why you didn't file and make you dig around for paperwork that may be difficult or impossible to find by that point. I just don't like to have gaps in paperwork.

 

[CharlieD10]

You may want to pose these questions under the "Canadian Tax and Finance" threads in the "Working in Canada" forums. Might get some answers there.

 

[Rinnerz]

I should probably update this real quick with what I found, in case it helps other US citizens in Canada later.

The short version: Yes, all US citizens must file their US taxes even if living in Canada (or really, any other country). However, whether or not you even need to file at all still depends on the same criteria that would decide this if you were still in the States.

The long version: Whether or not you have to file depends on...

- your filing status for that year (single, married filing jointly, married filing separately, head of household, qualifying widow(er) with dependent children);
- your age;
- your gross income for that year.

In the case of Love_Young and I, it would appear neither of us have been required to file yet:

- Single + under 65 years of age + less than $9,350 gross income = don't have to file.
- Married and either not living with your spouse at the end of the year OR filing separately (any age) + less than $3,650 gross income = don't have to file.

Source: IRS's own Publication 17, http://www.irs.gov/publications/p17/ch01.html#en_US_2010_publink1000170392.

There are still circumstances where, despite not needing to file, it might be in your best interest to file. This mostly becomes the case if you happen to qualify for various benefits/credits and wish to try to apply for any of them: http://www.irs.gov/publications/p17/ch01.html#en_US_2010_publink1000170439.

For those of us clueless about filing US taxes because we haven't needed to yet, I also found out that H&R Block offices in Canada assist US citizens with their US income tax filing, even while in Canada: http://www.hrblock.ca/services/us_citizens.asp. If I haven't figured it out on my own by the time I do need to file, I may be checking them out.

Deadline for filing for US citizens outside of the States: The normal deadline seems to be April 15, but it seems that US citizens outside of the States get an automatic extension of that deadline by at least 2 months, i.e. until June 15. From H&R Block's website: "If you live outside the U.S., you have an automatic extension of two months to file your U.S. tax return. In other words, your U.S. return is due on June 15 each year, rather than April 15. This provides time for you to complete your Canadian return and determine your Canadian tax liability. This is needed in case you have to claim the foreign tax credit on your U.S. return. Note that while you have until June 15 to file your US tax return if you live in Canada, the IRS will begin assessing interest on any unpaid balances on April 15th."

IRS's Publication 17 actually says you could even get an automatic 6 month extension: http://www.irs.gov/publications/p17/ch01.html#en_US_2010_publink1000170518.

Main page for Publication 17: http://www.irs.gov/publications/p17/ch01.html.

I'm sure I'll need to do a lot more research and digging around between now and when I'll be filing, but I hope the above was helpful.

 

[Pharoh]

I am American; my husband is Canadian. We got married last October. I lived in the US until September, then moved to Canada for the last four months of 2009. For my 2009 US taxes, I did "married filing separately" and just filed for myself. My husband had only Canadian income and has only ever lived in Canada. I called Revenue Canada to see if I had to pay taxes in Canada, since I was married to a Canadian, and they put me through to some international department. After explaining my situation, the man I spoke with said that I did not have to pay for 2009 because all my income from 2009 was US income and it all came before the date we got married. He said that I would only have to pay taxes on any US income that I received after the date we got married, because it was then that I established "permanent ties" to Canada.

I am a little confused about the US side though after seeing this thread. Is there a need for my Canadian husband who has never had any US income and has never lived in the US to file US taxes?

Turbo Tax: When I filed, I had to put NRA (non-resident alien) in the blank for Turbo Tax where it asked for the social security number of my spouse. It kept showing an error when I did the checks before filing, and according to Turbo Tax community boards, you have to file on paper if you put NRA in that blank because it looks like an error when you try to submit it online.

Hi qcsunshine,

Is this what you ended up doing - printing it from TurboTax and mailing it in? I put in 'NRA', and just as you said, TurboTax says it's invalid.

I looked at the process for getting an ITN for my spouse. It's lengthy and complicated. I have no interest in delaying my refund several months while we wait for an ITN to show up, obtain her documents, etc etc.

I'm contemplating filing as single, same as years prior. The refund is the same as married and filing separate. I'd prefer to e-file. Is there any danger in doing this?

 

[QCSunshine]

Pharoh, yes, that is what I did and it all worked out fine. The reimbursement came about 6 weeks later. I will do the same this year I think. I don't think you can e-file when you are marriage to a NRA, because it comes up as an error, but if you do figure out a way to e-file with Turbo Tax, I would be interested in hearing!

 

[Pharoh]

From the IRS website:

"If you choose to treat your nonresident alien spouse as a U.S. resident, your spouse must have either an SSN or an individual taxpayer identification number (ITIN)."

Also in Publication 17 (2009) it says:

"Nonresident alien spouse.
If your spouse is a nonresident alien, your spouse must have either an SSN or an ITIN if:

* You file a joint return,
* You file a separate return and claim an exemption for your spouse, or
* Your spouse is filing a separate return.

-----

So looks like if one chooses to treat Nonresident Alien spouse as a Resident, only then SSN or ITIN is needed...

My spouse isn't a resident of the States (nor has she spent any extended time here, other than brief visits). So in that case, wouldn't it be safe then to just file as single, and skip this whole NRA mess?

 

[QCSunshine]

Well, I am no expert, but I filed as "married, filing separately." I did not claim any exemptions for him, he did not file a return, and we did not do a joint return. So I guess it was okay the way we did it.

But it makes sense to me that if you don't treat your NRA spouse as a resident, then there is no need to file for a SSN. I don't know what a ITIN is. As far as filing as "single"...if you are legally married, I would think you would have to file as married (whether filing jointly or separately).

Perhaps someone with more experience doing taxes might be able to advise?