Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-27-2013, 01:17 AM
Junior Member
 
Join Date: Feb 2013
Posts: 2
Working outside US

Hi,

This my first time having the situation of working part of the year out of US and the other part inside US.

I worked in Canada for 5 months and in US for 4 months in the mean time I collected a sickness benefit from the Canadian government.

I do have W-2 from my US work and T-4 from the Canadian work and T4E for my sickness benefit earning.

Where should I show my Canadian income with the Taxes and the other deductions That I have paid like the Employee CCP and the employee EI in my 2012 US tax?

I will file to Canada as-well and I am worry about the double taxation situation from US and Canada.

Your help is appreciated.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-27-2013, 03:21 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,227
“Where should I show my Canadian income with the Taxes and the other deductions That I have paid like the Employee CCP and the employee EI in my 2012 US tax?”==========>Are you a US resident for US tax purposes? Then, you are subject to US taxes on your US source and Canadian source income on your US return. As you earn income in Canada and pay tax to Canadian taxing authority(UNLESS you are a Canadian citizen, you probably need to report only your Canadian source income to Canadian taxing authority(ies)). And then you need to file IRS form 1116 to claim your tax that you paid to Canada on your US return as a US resident for tax purposes( or as a citizen/green card holder). A tax credit reduces your US tax liability on a dollar-for-dollar basis, and so is generally more valuable than a deduction which reduces your taxable income. you can claim the foreign tax credit on your tax return on 1040 line 47, OR yo can report your tax that yu pay to Canada on SCh A of 1040 line 8 other taxes to deduct it on your US return.SO, you can claim an itemized tax deduction for foreign taxes paid on your tax return on Sch A, You may claim an itemized deduction for foreign taxes. This generally provides the least tax benefit. However, if you cannot claim the foreign tax credit, deducting foreign taxes would be the only alternative.orwhich is intended to reduce the double tax burden that would otherwise arise when Canadian source taxable income is taxed by both the US and Canada from which the taxable income is derived. Your foreign tax credit on your tax return will be the smaller of the amount of foreign tax paid or foreign tax accrued, or the amount of U.S. tax attributable to your foreign income. This limit is computed separately on your tax return for each type of foreign income.



“I will file to Canada as-well and I am worry about the double taxation situation from US and Canada.”=====>As described above.You are NOT subject to double taxation in Canada and US.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 02-27-2013, 11:36 AM
Junior Member
 
Join Date: Feb 2013
Posts: 2
Working Outside US

First Thanks for the quick reply.
I will try to mak my message much clear

I am a US Resident holding a Green Card lives in USA I worked 4 months in USA and 5 Months in Canada (I am Canadian as well) and I received Sickness benefit from the Canadian Government. This is the first time for me to face this situation.

My questions

1. If I file form 2555 EZ I will get a negative number in line 21 form 1040 (since my income was less than 95100. (say I made 30000 CAD $ salary paid 7200 cad$ tax and 1800 cad$ another cuts.) where is the 30000 should apply in form 1040 to offset the negative number in line 21.
2. where should apply my sickness benefit income (say 7000 cad $ paid 300 cad $ tax)

3. I will file to Canada too showing my US and Canadian incomes any double taxes situation.

4. is form 1116 needed to be filled if I filled form 2555 or 2555EZ?

Thanks in advance to get me out of this mess.



Quote:
Originally Posted by Wnhough View Post
“Where should I show my Canadian income with the Taxes and the other deductions That I have paid like the Employee CCP and the employee EI in my 2012 US tax?”==========>Are you a US resident for US tax purposes? Then, you are subject to US taxes on your US source and Canadian source income on your US return. As you earn income in Canada and pay tax to Canadian taxing authority(UNLESS you are a Canadian citizen, you probably need to report only your Canadian source income to Canadian taxing authority(ies)). And then you need to file IRS form 1116 to claim your tax that you paid to Canada on your US return as a US resident for tax purposes( or as a citizen/green card holder). A tax credit reduces your US tax liability on a dollar-for-dollar basis, and so is generally more valuable than a deduction which reduces your taxable income. you can claim the foreign tax credit on your tax return on 1040 line 47, OR yo can report your tax that yu pay to Canada on SCh A of 1040 line 8 other taxes to deduct it on your US return.SO, you can claim an itemized tax deduction for foreign taxes paid on your tax return on Sch A, You may claim an itemized deduction for foreign taxes. This generally provides the least tax benefit. However, if you cannot claim the foreign tax credit, deducting foreign taxes would be the only alternative.orwhich is intended to reduce the double tax burden that would otherwise arise when Canadian source taxable income is taxed by both the US and Canada from which the taxable income is derived. Your foreign tax credit on your tax return will be the smaller of the amount of foreign tax paid or foreign tax accrued, or the amount of U.S. tax attributable to your foreign income. This limit is computed separately on your tax return for each type of foreign income.



“I will file to Canada as-well and I am worry about the double taxation situation from US and Canada.”=====>As described above.You are NOT subject to double taxation in Canada and US.


Last edited by Thana : 02-27-2013 at 03:42 PM.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #4 (permalink)  
Old 02-27-2013, 07:04 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,227
I am a US Resident holding a Green Card lives in USA I worked 4 months in USA and 5 Months in Canada (I am Canadian as well) and I received Sickness benefit from the Canadian Government. This is the first time for me to face this situation.”==========>Then I guess you are NOT subject to FEIE credit; To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements. Your tax home must be in a foreign country, Canada.You must have foreign earned income.You must be one of the following.A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. if you don't meet conditions abvoe, then you do FTC only.



My questions

“1. If I file form 2555 EZ I will get a negative number in line 21 form 1040 (since my income was less than 95100. (say I made 30000 CAD $ salary paid 7200 cad$ tax and 1800 cad$ another cuts.) where is the 30000 should apply in form 1040 to offset the negative number in line 21.”=====>I guess you need to visit the IRS Website here for sure; Foreign Earned Income Exclusion - Can I Claim the Exclusion or Deduction?. If you are still subject to FEIC, You may claim the Foreign Tax Credit for taxes paid in Canada. However, you may not claim a tax credit for taxes paid on any income which has been excluded from US taxation using the foreign earned income exclusion.As far as I know as long as your foreign earned income that you earned in CAN. exceeds $95,100, then you can still claim FTC on your US return.The FTC is not taken on any FEIE. So only foreign tax allocable to the foreign earned income not qualifying for exclusion is allowed. It's not a carryover. The exclusion doesn't carry forward, it carries backwards .The foreign earned income tax exclusion applies to the income earned up til the day you departed the foreign country


“2. where should apply my sickness benefit income (say 7000 cad $ paid 300 cad $ tax)”=====> Generally, under the US Tax law, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your ER. If both you and your ER pay for the plan, only the amount you receive that is due to yourER’s payments is reported as income. So as you said you paid tax 300 CAD $ tax, I guess yo can claim it on your US return as part of yur FT paid to Canada.

“3. I will file to Canada too showing my US and Canadian incomes any double taxes situation.”=====>I don’t think so; I guess you can claim your CAN tax(es) that you pay to CAN on your US return. Please check mutual tax agreement between US and Canada. You can talk to a CAN tax pro on your CAN return/Can FTC .
Convention Between Canada and the United States of America*With Respect to Taxes on Income and on Capital

“4. is form 1116 needed to be filled if I filled form 2555 or 2555EZ?”=========>It depends; as long as your foreign earned income on 2555/2555EZ exceeds $95100, FEIC exclusion amount, then as far as I know you can still file Form 1116 on your return to claim your FTC on 1040. You can talk to an intl tax repre at the IRS for more info.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Working From Home Darkauthor81 Income 4 02-27-2012 02:26 PM
I live in De but will be working in NJ mdtoliver82 Delaware 0 07-05-2010 08:56 AM
From PA working in NY jmm765psu Pennsylvania 1 08-05-2009 08:58 AM
Working in NJ living in NJ NYGirl Income 0 04-20-2009 04:05 PM
Moving to NJ but will still be working in NYC Ryan_JerseyCity Miscellaneous 1 09-21-2008 03:16 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning