American/Canadian double taxation

[jeff198901]

I'm not sure if this is the right section, but,


If an American is working in Canada, is there a way they can be be exempt from paying tax in the USA?

 

[scylla]

The American still has to file a US tax return. However any tax already paid in Canada is declared in the US tax return - avoiding "double taxation".

 

[jeff198901]

The American still has to file a US tax return. However any tax already paid in Canada is declared in the US tax return - avoiding "double taxation".

Thank you very much! I was researching and was getting a little confused. You especially have been a huge help to me answering multiple questions! You must have a mind like a sponge to know all of this!

 

[CDNPR2014]

like scylla says, your world wide income is put on your us tax return and the amount of canadian taxes paid will be credited toward your us return. assuming there aren't many assets in the us or large sums of savings, us taxes ends up being a wash - you pay nothing, they give you nothing.

 

[jeff198901]

like scylla says, your world wide income is put on your us tax return and the amount of canadian taxes paid will be credited toward your us return. assuming there aren't many assets in the us or large sums of savings, us taxes ends up being a wash - you pay nothing, they give you nothing.

No assets and all savings will eventually be moved to Canada when it comes time to purchase a home

 

[CDNPR2014]

No assets and all savings will eventually be moved to Canada when it comes time to purchase a home

then it *should* be easy for you. for the first year, i'd recommend having your us taxes done by someone in canada who knows how to do cross border taxes, and then use the copy they give you as a template for subsequent years. last year I paid someone $150 CDN to fill out the us forms for me, just to have them turn around and give them to me to mail out. while it was great to have a professional fill out the forms, it felt a bit of a waste of money!

 

[Lizzy1987]

then it *should* be easy for you. for the first year, i'd recommend having your us taxes done by someone in canada who knows how to do cross border taxes, and then use the copy they give you as a template for subsequent years. last year I paid someone $150 CDN to fill out the us forms for me, just to have them turn around and give them to me to mail out. while it was great to have a professional fill out the forms, it felt a bit of a waste of money!

I ended up doing my taxes myself last year by hand :-\ ??? I could not find one tax professional willing to take on cross border taxes. Mine were not that complicated anyway, so I did half through turbo-tax (letting the program do the math), and filled out the actual paper form and mailed them in.

It took me FOREVER to find the answer to this: your Canadian spouse most likely does not have a U.S. social security number. Leave that part blank, and then mail your forms in- you can't e-file with a blank ssn, even though the IRS will accept that!

 

[screech339]

Generally for the most part, due to Canadian taxes being higher than that of US, americans end up only paying canadian taxes and no US taxes. However if in the event that the Canadian taxes are lower than that of US, americans would have to pay the "tax difference" to US. For example. Just using numbers for simplistic sakes. If Canadian taxes are 20% and American are 30%. Then Americans would pay 20% to Canada, 10% to US.

 

[CDNPR2014]

I could not find one tax professional willing to take on cross border taxes.

yeah, in the ottawa area they are either downtown, closer to the west end or over the border in ogdensburg. the options downtown are ridiculously expensive, and the one i used wasn't worth what i paid in the end. next year, i'll be trying it on my own.

 

[screech339]

There are some "specialized" accountants that deals with US taxes. However they tend to charge expensive fees to the point, you are better off doing it yourself or driving across the border and complete your taxes there.