Thread on VJ and IRS website didn't help...

[Veronik 19]

Good morning,

Sorry to bother everyone with yet ANOTHER tax question, but I'm on the verge of moving back home because this is too complicated for me. We had our first marital fight, and it wasn't a good one. So if anyone feel like helping, this is the time!

Sorry again for those of you who will think I should have 'read the guides', done my research and what not. But I have. I've called the IRS, browsed the IRS website with no happy ending, and looked through the tax thread on VJ, and I'm STILL confused.

I'll try to make this as simple as possible, this way if you can only answer one question you can do so, and if there's a tax genius out there, please HELP!

This is our situation. Our income put together, including my canadian income, is in the 35,000 - 45,000$ range.

1- Is it more profitable to file married seperately or jointly? From experience?

2- If we do file JOINTLY, do I have to wait for my T4s?

3- Is there a form we need to attach/send apart from the normal forms we fill online? (my husband files his taxes online, without using TurboTax or another program like that)

4- Will it take longer for the IRS to process the return?

5- (Last one) If we do go the joint way, is it relatively easy or should I go get a refill of my anxiety medication? (joking)

6- What is form 2555, tax exemption? Do I need to fill that in? Will it make us save money? What's its purpose???

When I called the IRS, the man (who was not having a good day apparently), was telling me that if we decide to fill JOINTLY I will be considered a resident for the tax year, but that I need to type and sign a letter stating that I "take the election to be treated as a resident"... #######?

Sorry again for bothering everyone, I've had my share of stupid questions that could have been answered by reading the guides, but I swear I can't find what I'm looking for and am about to go insane!

I appreciate the helps, thanks again!

[Canadiandggal 49]

Good morning,

Sorry to bother everyone with yet ANOTHER tax question, but I'm on the verge of moving back home because this is too complicated for me. We had our first marital fight, and it wasn't a good one. So if anyone feel like helping, this is the time!

Sorry again for those of you who will think I should have 'read the guides', done my research and what not. But I have. I've called the IRS, browsed the IRS website with no happy ending, and looked through the tax thread on VJ, and I'm STILL confused.

I'll try to make this as simple as possible, this way if you can only answer one question you can do so, and if there's a tax genius out there, please HELP!

This is our situation. Our income put together, including my canadian income, is in the 35,000 - 45,000$ range.

1- Is it more profitable to file married seperately or jointly? From experience?

2- If we do file JOINTLY, do I have to wait for my T4s?

3- Is there a form we need to attach/send apart from the normal forms we fill online? (my husband files his taxes online, without using TurboTax or another program like that)

4- Will it take longer for the IRS to process the return?

5- (Last one) If we do go the joint way, is it relatively easy or should I go get a refill of my anxiety medication? (joking)

6- What is form 2555, tax exemption? Do I need to fill that in? Will it make us save money? What's its purpose???

When I called the IRS, the man (who was not having a good day apparently), was telling me that if we decide to fill JOINTLY I will be considered a resident for the tax year, but that I need to type and sign a letter stating that I "take the election to be treated as a resident"... #######?

Sorry again for bothering everyone, I've had my share of stupid questions that could have been answered by reading the guides, but I swear I can't find what I'm looking for and am about to go insane!

I appreciate the helps, thanks again!

awe You will be just fine, try to relax and remember the reason you love your husband. I have had the moments as well.

I will try to answer as many questions as I can by experience from last year (I had not immigrated yet).

1) There have been a ton of people on here including myself that have got quite a lot more back from filing married jointly.

2) I used my t-4's but My mom just read me them over the phone as they came to my house in Canada.

3) I am not too sure about this one as you are AOSing so I am not sure what they consider you

4) I do not think it will take any longer as you have your ssn number there shouldn't really be any delay... When My husband and I applied last year (I was still living in Canada) I had to get a ITIN number so we could file jointly and we still had money deposited into our bank with 6 weeks.

5) can I have some? lol

6)No clue

HAng in there. Why not go to HRblock and see if they can answer these questions in more detail...

I should be a promoter seems I am always advising people to see them lol

Good luck

[Veronik 19]

Thanks Canadiandggal,

I would go to HRBlock, but my husband is a firm believer that if you can do something yourself, you shouldn't pay someone else to do it

What is a ITIN number?

So I guess I definitely need to wait for my T4 then? I work for a school board, and in Quebec, they are always the last one to send them, so I shouldn't expect it sooner than late February... What info do I need from it apart from the whole income? I have some of that info in my pay stubs (total income from 2010, taxes witheld and what not)

[rika60607 215]

You did not do your reading

Or, may be just reading tax rules not your thing, in which case you better get a professional to do this for you.

But, here is some help:

http://www.irs.gov/app/picklist/list/formsInstructions.html?value=2555&criteria=formNumber&submitSearch=Find

These are 2555 forms and instructions. See if you can fill out 2555-EZ. This is the form on which you report your Canadian income. Since you did not make much money, all of it will be exempt from US tax. I do not remember having to submit any document proving foreign income, you just need to know what it was.

Yes, filing jointly should save you some money. So after filling out 2555-EZ, try to work on form 1040 together with your spouse.

6- What is form 2555, tax exemption? Do I need to fill that in? Will it make us save money? What's its purpose???

[rika60607 215]

If you have SSN, you do not need ITIN. ITIN is a taxpayer identification number that can be requested from the IRS IF you do not qualify for SSN, but you need taxpayer's ID because you need to file a tax return.

What is a ITIN number?

[Udella&Wiz 325]

Thanks Canadiandggal,

I would go to HRBlock, but my husband is a firm believer that if you can do something yourself, you shouldn't pay someone else to do it

What is a ITIN number?

So I guess I definitely need to wait for my T4 then? I work for a school board, and in Quebec, they are always the last one to send them, so I shouldn't expect it sooner than late February... What info do I need from it apart from the whole income? I have some of that info in my pay stubs (total income from 2010, taxes witheld and what not)

Your ITIN is the identification number you would use if you didn't have an SSN but were filing US taxes, but you already have an SSN by now, right?

I waited for my T4's because you'll need to know the income, plus the tax amounts taken off back in Canada if I remember correctly.

I would highly recommend a tax program, we used Turbo Tax and with a small amount of reading, we file jointly and it handled my foreign income no problem

DO NOT forget to do the conversion using the current exchange rate the day you file your taxes...don't put in the Canadian dollar amounts, everything needs to be in US currency - but that's just a simple calculator thing.

You definitely want to use the 2555 (Turbo Tax handled that) because you want to report your income as foreign earned and since there is a tax treaty between Canada and the US, you will not be taxed twice (obviously you've already paid income tax once back in Canada )

Edited January 24, 2011 by Udella&Wiz

[rika60607 215]

http://www.irs.gov/businesses/small/international/article/0,,id=96734,00.html

And here is some info on electing to be treated as a US resident for tax purposes based on your marriage to a US citizen.

It is just a simple letter.

[nickbits 43]

An ITIN is for people who don't have SSNs, you don't need one.

What I would if I was in your situation is:

Wait for your T4s (You also need the official exchange rate for the year and convert to US$ http://www.bankofcanada.ca/pdf/nraa10.pdf). You then need to include a sheet you create on your own that shows your CDN income and the converted amount.

You will benefit most from joint filing if one person makes considerably more than the other. I would setup both scenarios in TurboTax and see which one comes out ahead. My guess is joint will be better.

Fill out form 2555 the best you can and exclude your CDN income.

Even if you went to H&R block or something I wouldn't trust that it was done anymore correctly as this is an unusual tax situation. You'd have to hire a CPA that was an expert in international taxes.

I've always done my taxes on my own to the best of my ability. The worst that has happened is they sent me a correction one year.

[nickbits 43]

Also I don't think that letter applies since you are were not a non-resident alien at the end of the year.

[rika60607 215]

She was not a non-resident alien?

I am not so sure... I do not know her timeline.

http://www.irs.gov/businesses/small/international/article/0,,id=96477,00.html

Quote:

"An alien is any individual who is not a U.S. citizen or U.S. national. A nonresident alien is an alien who has not passed the green card test or the substantial presence test."

Also I don't think that letter applies since you are were not a non-resident alien at the end of the year.

[decocker 7,198]

1- Is it more profitable to file married seperately or jointly? From experience?

2- If we do file JOINTLY, do I have to wait for my T4s?

3- Is there a form we need to attach/send apart from the normal forms we fill online? (my husband files his taxes online, without using TurboTax or another program like that)

4- Will it take longer for the IRS to process the return?

5- (Last one) If we do go the joint way, is it relatively easy or should I go get a refill of my anxiety medication? (joking)

6- What is form 2555, tax exemption? Do I need to fill that in? Will it make us save money? What's its purpose???

1. Jointly - it is rare that filing separate will help.

2. You won't need your T4s only the amount. I read this on VJ and this is what we are doing because orfee won't get his t4 for a while yet.

3. Just your 1040 and the 2555 (you guys don't have kids right? much easier..)

4. It won't take longer because of the foreign income, no.

5. It's not hard. I did mine with turbo tax online friday night, but then realized that we can't file online because this is orfee's first us tax return and he doesn't have a pin to file online (somebody correct me if i'm wrong on this one)

6. 2555 is so you can input your income and then exempt it. It will save you money because other wise Chris would have to file separate and would probably end up owing money. Have him try it out using turbo tax online (that's what i did).

good luck. taxes SUCK.

[nickbits 43]

She was not a non-resident alien?

I am not so sure... I do not know her timeline.

http://www.irs.gov/businesses/small/international/article/0,,id=96477,00.html

Quote:

"An alien is any individual who is not a U.S. citizen or U.S. national. A nonresident alien is an alien who has not passed the green card test or the substantial presence test."

Hmm maybe you're right but I would call the IRS to be sure. K1s are processed as immigrant visas so there might be an exception but I couldn't find anything in the documents. Guess it wouldn't hurt to include the letter regardless.

Guess I "lucked out" that my wife had no income and got her GC before the end of the year.

Edited January 24, 2011 by nickbits

[brightskte 18]

Vero, I think you're freaking yourself out to make it way harder than it is. I just did our taxes last week and it was a breeze. Turbo tax will do everything for you. All you have to put in is the foriegn income and then the address of the former employer. It will be on the Other Income portion(If I remember right). It'll probably take you about 10 minutes to do, but it's really really easy. I didn't have to include any other papers, just efiled and our refund should be deposited before Feb. 4th.

Breathe!!!

To valerie78:

Turbo tax allowed me to make Mathew a pin when we got to the efile portion.

Edited January 24, 2011 by Kayla*Mathew

[Veronik 19]

Thank you so much everyone for your patience and help! I think I understand better now!

So basically, I don't necessarily have to wait for my T4 if I know (from my last pay stub) my total income for 2010, and the amount of taxes I paid.

And all I need to do if fill form 2555 and 1040, right?

Mummm, Turbo tax, enh? I'll keep that in mind!

Thank you guys SO MUCH! You have no idea how better I feel now!

[Jill & Jeff 3]

Looks like you've gotten great advice so far. What my husband and I did was file jointly in both countries. I mailed a photocopy of my passport to the Canadian tax agency to get an ITN number and he did the same for us. I showed up as $0 income for him as I had no Canadian income and he showed up as $0 income for me as he had no American income.

This probably makes it sound overly simplified, but it seemed fairly simple to me. The pain in the butt part came with having to physically mail in my US taxes to file for the ITIN number for my husband. In the end, I found this the easiest way to go. I'm a staff accountant and I also consulted with our auditing accountant to make sure I was doing everything ok.

Turbo Tax is great resource. I use it every year. I wouldn't recommend H&R Block as I've found that paying them hundreds of dollars when all the person that does your taxes is doing is basic data entry. Every time I went there, it was just a random lackey with no tax experience inputting stuff into computer software.

Good Luck!

J-