Canadians here ... can we file as non residents?

[INF 96]

Hi guys,

 

I am Canadian and am looking to file my taxes this year. I noticed that married filing jointly will be very expensive for me and my husband. We owe a lot of money that way. Our accountant advised us saying that we can file married but separately and that I (the beneficiary) don’t need to file a tax return since I’m a resident of Canada and can use the treaty to claim non residency in the united states.
 

The issue is I have been here since March and to me ... I’d be easily a resident of Canada. Has anyone been able to solve this before? 

[JeanneAdil 6,190]

you just got your EAD card in March 2021 so you have no US income ,  I hope till after you got the card

so,  no 2020 US taxes to file 

Married in 2020 spouse can file as MFJ or MFS 

if married filing joint the tax exemption for 2020 is $107,600 for year 2020 and you need to file form 2555

Edited May 7, 2021 by JeanneAdil

[Ayrton 965]

21 hours ago, INF said:

Hi guys,

 

I am Canadian and am looking to file my taxes this year. I noticed that married filing jointly will be very expensive for me and my husband. We owe a lot of money that way. Our accountant advised us saying that we can file married but separately and that I (the beneficiary) don’t need to file a tax return since I’m a resident of Canada and can use the treaty to claim non residency in the united states.
 

The issue is I have been here since March and to me ... I’d be easily a resident of Canada. Has anyone been able to solve this before? 

When did you move to the US? You said on the post March, your timeline says you applied for AOS last year.

[INF 96]

On 5/7/2021 at 5:53 PM, Ayrton said:

When did you move to the US? You said on the post March, your timeline says you applied for AOS last year.

Sorry March 2020! 

[Ayrton 965]

6 minutes ago, INF said:

Sorry March 2020! 

 

You're a resident for tax purposes in the US because you pass the presence test for the year of 2020. May I ask how you guys own a lot more money by filing jointly? In 99% of the cases, filing jointly with a foreign spouse that just immigrated is best option for the first year, because the foreign spouse doesn't have any income, all the foreign income is excluded, and you have double the standard deduction, 24k instead of 12k.

 

Technically you don't need to file US taxes for the year of 2020 because you had no income, but not because you were a non resident for tax purposes.

Edited May 9, 2021 by Ayrton

[Wuozopo 4,285]

On 5/6/2021 at 7:48 PM, INF said:

I noticed that married filing jointly will be very expensive for me and my husband. We owe a lot of money that way. O

Is your accountant using the IRS Foreign Earned Income Exclusion for the Canadian income reported on your US return?

[INF 96]

12 hours ago, Ayrton said:

 

You're a resident for tax purposes in the US because you pass the presence test for the year of 2020. May I ask how you guys own a lot more money by filing jointly? In 99% of the cases, filing jointly with a foreign spouse that just immigrated is best option for the first year, because the foreign spouse doesn't have any income, all the foreign income is excluded, and you have double the standard deduction, 24k instead of 12k.

 

Technically you don't need to file US taxes for the year of 2020 because you had no income, but not because you were a non resident for tax purposes.

Ahhh!! That makes a lot of sense. I think we owe taxes because my husband did not pay enough withholding taxes. It’s so weird that my husband and I owe around 4k USD. 

8 hours ago, Wuozopo said:

Is your accountant using the IRS Foreign Earned Income Exclusion for the Canadian income reported on your US return?

Yes, we will be using that! We still owe using that calculation but it’s a lot less! 

[Ayrton 965]

5 hours ago, INF said:

Ahhh!! That makes a lot of sense. I think we owe taxes because my husband did not pay enough withholding taxes. It’s so weird that my husband and I owe around 4k USD. 

Yes, we will be using that! We still owe using that calculation but it’s a lot less! 

It still doesn't name sense to me. If your husband didn't withhold enough taxes for the year of 2020, filing separately would still make him owe more taxes then filing jointly, since the standard deduction would be half of if filed jointly.

 

Unless you have tons of investment accounts in Canada that might not be exempt (but then you wouldn't pay taxes in Canada for that because of tax treaty), it doesn't make sense how you owe more taxes by filing jointly.

 

Did you have any US income last year? I don't think so since you just got your EAD this year. I would suggest trying to do your taxes in a free software to compare with what your accountant is doing. He might not be applying all the exemptions for foreign spouse.

 

Edited May 10, 2021 by Ayrton