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| Subject: Can someone help with my U.S. Taxes? |
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I´ve been working in Saskatchewan since 10/2008 and am a US citizen. I´m confused on whether or not to claim credit for my foreign income. Since i haven´t had a bonafide residence in canada for the 12 months i´m not sure if i even qualify to claim it. Is there someone out there that can give me some advice? I want to do my own taxes for the U.S. (e-file). I still have a residence in Michigan that i use, since i currently only have a temporary work permit.
[20-02-2009,12:05]
[**.37.171.116]
detroit |
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(in reply to: Can someone help with my U.S. Taxes?)
As a U.S. citizen, you have to report all world income, meaning both U.S. and Canada, in your U.S. tax return. But, as the U.S. and Canada have a tax treaty, you wouldn´t pay taxes twice. You´ll get either credit for foreign taxes paid (tax treaty), or you can exclude foreign income.
If you qulify, you can excluded your Canadian income on your U.S. return by filing for Foreign Earned Income Exclusion (Form 2555). You must have resided in Canada for 330 days out of any 12 month period to qualify. Check it out at IRS.GOV or search the internet.
[20-02-2009,12:40]
[***.130.11.77]
Richard |
330 DAYS (in reply to: Can someone help with my U.S. Taxes?)
Being that it is not 330 days. Is it correct to say that i am not qualified to claim any credit, or even report the income?
[20-02-2009,13:09]
[**.37.171.116]
detroit |
(in reply to: Can someone help with my U.S. Taxes?)
No, you must report the income. You just can´t exlcude it. But you can claim a credit for Canadian taxes paid, so you won´t be taxed on it again when you report the Canadian income on your U.S. return. (it´s really the same thing, credit or exclusion).
Just remember, ALL world-wide income must always be reported on U.S. returns.
Go to IRS.GOV, as there´s an easily understandable section that explains exactly this situation and what to do. Do a search there on "reporting world income".
[20-02-2009,13:18]
[***.130.11.77]
Richard |
(in reply to: Can someone help with my U.S. Taxes?)
Good information Richard. We are starting to think about taxes too, and it looks like we have to pay our Canadian taxes first, in order to claim the exclusion on our US forms.
I believe that as US citizens residing abroad, we are eligible for a filing extension until June.
[20-02-2009,15:27]
[**.252.125.242]
wannabecanadian |
(in reply to: Can someone help with my U.S. Taxes?)
I wasn´t aware of the filing extension for Americans abroad. Good to know wannabe, thanks.
Correction on earlier IRS site search for this subject. It´s under key words Foreign Income, not World Income. Or this link:
http://www.irs.gov/faqs/faq/0,,id=199670,00.html
At their site, IRS also provides links to free software preparation if meeting certain income qualifications. But I think it´s for U.S. residents only, unfortunately. It´s worth a try, as it doesn´t exclude Americans with foreign residents. Otherise TurboTax and TaxCut provide free basic preparation software at their sites, or fees for more involved returns.
By the way, as much as I hated doing U.S. tax returns as far as complexity and bureacracy, I found the Canadian tax procedures and forms way more overly complicated. But there is tax filing software for Canada at a reasonable cost that works well from Intuit, easing this pain.
[20-02-2009,18:31]
[***.130.11.77]
Richard |
(in reply to: Can someone help with my U.S. Taxes?)
More good info, Richard. We´ve been wondering if we should hire someone for our Canadian taxes, but we´ll look into this first. We typically use TurboTax for US taxes and it should be straightforward enough even this year (I hope). I´m not surprised to hear that the Canadian system would be more complicated.
[21-02-2009,14:03]
[**.252.125.242]
wannabecananadian |
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