HF & HB

Does your appointment letter address others attending?  Some offices strictly prohibit additional people attending.

Quick May 2021 Update: This method still works

@Timona says that you can get a real person by asking for technical assistance at each prompt.

I'm not sure how my husband filed his Canadian taxes. He did those on his own. I believe he put married filing separately and that he was not a resident of Canada on Dec 31 or something? He did exactly what folks suggested to do in this thread.
 
Unfortunately our H&R block person also had no idea what to do and had to "send it to corporate" so we have another appt this Sunday

We are working on our taxes today and are soooo out of the loop lol. Husband just finished his Canadian taxes (looks like he did everything as suggested here) and we have an appt with h&r block to help us figure out how to file in the u.s. I need an adult!

Hi Folks,
I moved from Canada->US on a K-1 visa in October 2018, and got married December 3rd. I was a self-employed musician in Canada up until I left, and am still waiting for my EAD so I haven't worked since arriving (US income for 2018 is $0). My husband and I have figured out how to do the Married Filed Jointly US return (including my worldwide income and a statement that I want to be taxed as a Resident Alien for all of 2018). What I'm having a tough time finding is whether the fact that I got married in 2018 will affect my Canadian return. My husband has never lived in Canada, so only I have to do the return, and obviously I will say I'm married because I am! However, I wasn't married until after I left Canada...Do I have to include my husband's US income on my Canadian return? I know there's a form to fill in reporting that I emigrated, and telling them what day I left, but that's all the information I can find. I want to do it all correctly, so any help would be appreciated  
Thanks! 

Depends on how you are filing.
 
If you file Married Filing Jointly (MFJ), then you must be considered a resident alien (RA) for the entire tax year. Since you are not one for the entire year but are the spouse of a USC, you can elect to be treated as one for the entire year.
Resident Aliens are required to report worldwide income. The FEIE and/or FTC can exclude most to all of this foreign income from being taxed.
 
Edit: It sounds like the advice you received was for a dual status alien. They only need to declare income since becoming a resident alien. However, this does not permit filing MFJ (unless you elect to be treated as an RA...but again then needing to report worldwide income for the entire year).
 
Incorrect. Any "US person" must declare worldwide income.
A US person is any US citizen, legal permanent resident (LPR), or other resident alien.

👍Having the concept is a good thing so you know what you are looking for if you use tax software. The software will automatically slot things onto the proper forms for you and make the calculations, but you need that knowledge to review their form creation and know if it seems right. Software leads you through an "interview" but if you answer the question randomly with no concept research, it can take you down the wrong path.
 
One thing to remember is the various software brands create the questions to channel you in the proper direction. They aren't written by the IRS. One year H&R Block gave us a free software cd to try to maybe pull us away from TurboTax. We used both. Our final return came out exactly the same. Identical. But the path and questions to get there were very different. If you see unexpected results that don't seem right based on the concepts you are learning from the IRS, then you may have not understood how to answer one of their "interview" questions. Sometimes you have to "trick" the software to move on because you understand the concept of where it's leading you.
 
Take the questions leading you toward Form 2555 eligibility---
Did you earn money in a foreign country?
Did you have a visa to a foreign country? So some immigrants are thinking "yes, I had a visa to America."  No they are writing this primarily to an American audience.  The foreign country is Canada and their question is geared toward Americans working abroad with some kind of visa that gave them "legal presence" or "bonafide residency"  to work in Canada. A native born Canadian may say No to "did you have a visa?" based on the fact they didn't require a visa to live and work in Canada because they were a citizen. The software will shut them down and say "not qualified for Foreign Income Exclusion". But if you just say "yes" to having a visa to work in Canada (because you understand they just want to know if you were allowed to work in Canada), the software will move on to form 2555 where you get to the real IRS parts. By saying Yes to trick the software, you aren't lying to IRS, but lying to TurboTax and the way they structured the question to get to the Foreign Income Exclusion. That visa question is not on the IRS tax form so tricking the software in this example is in no way telling falsehoods to a direct IRS question. 

With a K1 it's kind of a gray area to me. Your are no more than a 90 day visitor when you arrive. The EAD and greencard give you some status as a resident alien. Publication 519 found on the IRS.gov website will give you a lot of information. Too much almost because it can be overwhelming. It's all laid out down to days physically present, greencard, etc and you might sort through that for some answers depending on what part of the tax year you arrive in, whether you work in that tax year or whether you choose to be treated as a resident alien for the entire tax year based on marrying a USC.
Basically when you become resident in the US, you follow US tax laws. You report as taxable income any interest, earnings, capital gains, etc. earned worldwide. So if you bring $20k over, it is not taxed but if you invest it and it starts earning, you report the interest it earned. The same thing if it stayed in the UK and earned interest, you report it to the US once you are considered US resident. The UK should no longer tax you on anything you begin to report to the IRS. It is even possible to be a dual status alien in the same year.
Most K1s make the election to be treated as resident aliens for tax purposes the year they marry and also file a joint tax return with their spouse for that year. (You'll find a that info on page 9 of Pub 519.) If you make that election, then you can skip all the info on non-resident alien or dual status. Your UK earned income for that entire tax year will be reported to the IRS. (That's considered worldwide income that joint filers must report).
BUT you will also qualify for Form 2555 Foreign Income Exclusion to keep from being taxed on it. That almost always works out to an advantage because the new spouse on a tax return reduces the USC's taxable income by $10,150 in 2014 and probably more when 2015 is set. So the USC gets the deductions for having a spouse, and her foreign income is excluded from taxation that first year. It all depends on each individual's tax situation, but my spouse of less than three months in 2008 saved me over $2000 in taxes. That was even with reporting eight months of UK wages (then excluding them). It was a year of a bonus tax rebate and by filing jointly with me, he qualified to get it too eve though he had no greencard.
That's just one example of tax filing, but seems to be the best choice for most.

1) "Interest" Canada & USA have a tax treaty and you will only be taxed in ONE country for interest with no tax withheld.
 
2) Closing TFSA is fine as the money you earn in there would be taxed as if its a regular savings account in the USA.
 
3) you shouldn't be taxed on your USD since its your money that you're just transferring... unless you made a huge profit from changing CAD to USD which you probably won't, if anything you'll lose money due to fee's from the exchanger which you may be able to write off.

I'm not 100% sure about the first question. As far as the 2nd question currency conversion follows the same capital gains/loss tax rules in canada as any other investment. You are only required to report it once you actually realize them by (in this case) transferring back to CAD. You also only need to report them if they are larger than 200$
 
So as an example you transferred 10k CAD to 7k USD. Fast forward and the value of your 7k USD is now 11k CAD. If you converted it back you would have to report the 1000$ capital gain but if you do not convert it then you recieved no capital gain so no report is necessary.

you need to file in both countries. Report the income earned in Canada Jan to June on your Canadian return. Make sure you select that you are a non resident as at December 31 2015. Report the income you earned in the US July to December on your US return. File a US return even if you don't make the threshold. I have seen lots of situations where people applying for credit, mortgages, or even as support for K1 or other immigration didn't file and then had a tough time meeting the criteria.
This should be the last Canadian return you need file unless you move back there.

Just in case anybody doesn't know, if a "US person" (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR) has any foreign bank account(s) at all that in their aggregate amount to $10k during the year, they must report these. The penalty is really severe not to do it, even if you can legitimately plead ignorance to the law.
My understanding is that if you have a couple of foreign accounts and they are below $10k you need not mention them at all, at least according to that link.

FBAR Is not part of the tax return. TurboTax just reminds you. If she had over $10,000 in bank accounts in Chili anytime in calendar year 2018, she files.  It is a report to the US Treasury. There is no tax liability.
 
This page explains and gives some links to read  https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar
 
This is the link to where you file online or do an offline form. It is basically going to ask for the bank name, address, account number, and highest balance during 2018.
https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar
 
Note: I'm not sure why the IRS website puts this under small business because it applies to any taxpayer with foreign accounts.

Hi,
I'm US citizen. My wife came to US with a K1 fiancee visa in June 2018, We married in July 2018 and from the date of married to the last day of 2018 she has been living in the US.
In her country, Chile, she worked from January 2018 to May 2018. She has not worked in the US.
 
She has two bank accounts in Chile, and last year she had a combine amount of approx. $13,000 in those accounts. all of these manoy was saving from her job. Some of that money she has been transferring to our bank in the US. from bank to bank (electronically).
 
I have been doing the taxes 2018, Married filling jointly, and Turbotax is asking to file FBAR?
 
Anyone has had experience in this situation?
It appears that Turbotax doesn't support FBAR. Who I need to contact to file the FBAR?
 FYI- she doesn't have the GC, still waiting for the interview.
Thanks,

I have been a silent observer on VJ so far but felt that I should share my research in FBAR filing requirements.
What is FBAR: A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.
Background: I was debating whether my wife, a K-1 entrant, is required to file FBAR for 2016. In researching the issue, the requirement to file boils down to whether she is considered a United States person for 2016. This analysis is only applicable if you are a K-1 entrant who has not yet converted to a green card. If you are a green card holder, you are required to file FBAR.
Applicable Regulations: Because I know we all love form filling/instruction cross-checking with the K-1 and AOS process, lets get into the nitty-gritty.
Disclaimer: I only included snippets I believe are relevant. I am neither a tax or legal professional.
FBAR filing instructions for FinCEN Form 114
United States person means United States citizens (including minor children); United States residents; entities, including but not limited to, corporations, partnerships, or limited liability. A United States resident is an alien residing in the United States. To determine if the filer is a resident of the United States apply the residency tests in 26 U.S.C. section 7701(b).

26 U.S.C. section 7701(b)
An alien individual shall be treated as a resident of the United States with respect to any calendar year if (and only if) such individual meets the requirements of clause (i), (ii), or (iii):

(i) Lawfully admitted for permanent residence
Such individual is a lawful permanent resident of the United States at any time during such calendar year.
(ii) Substantial presence test
Such individual meets the substantial presence test of paragraph (3).
(iii) First year election
Such individual makes the election provided in paragraph (4).

26 U.S.C. section 7701(b) Substantial Presence Test
Such individual was present in the United States on at least 31 days during the calendar year, and
the sum of the number of days on which such individual was present in the United States during the current year and the 2 preceding calendar years (when multiplied by the applicable multiplier determined under the following table) equals or exceeds 183 days
Current Year………..….1
1st Preceding Year….…1/3
2nd Preceding Year…….1/6

26 U.S.C. section 7701(b) First Year Election
was not a resident of the United States under paragraph with respect to the calendar year immediately preceding the election year

is a resident of the United States under clause (ii) of paragraph (1)(A) with respect to the calendar year immediately following the election year, and

is both (I) present in the United States for a period of at least 31 consecutive days in the election year, and (II) present in the United States during the period beginning with the first day of such 31-day period and ending with the last day of the election year (hereinafter referred to as the “testing period”) for a number of days equal to or exceeding 75 percent of the number of days in the testing period (provided that an individual shall be treated for purposes of this subclause as present in the United States for a number of days during the testing period not exceeding 5 days in the aggregate, notwithstanding his absence from the United States on such days). An alien individual who meets the requirements of subparagraph shall, if he so elects, be treated as a resident of the United States with respect to the election year.
Analysis:
My K-1 spouse is not considered a United States person for the purposes of filing FBAR because she does not meet any of the requirements.
Lawfully admitted for permanent residence
She is currently in the AOS process and has not been admitted yet for permanent residence.

Substantial presence test
2016- 60 Days x 1 = 60 Days
2015- 9 Days x 1/3 = 3 Days
2014- 135 Days x 1/6 = 22.5 Days
Total Days = 85.5 Days (failed test)

First Year Election
She will qualify, however, she will not be electing to be treated as a resident under this section.
Conclusion:
Having failed the 3 tests, I believe she not considered a United States person for the purposes of filing FBAR.
I will still be filing a joint tax return to take advantage of lower taxes. The IRS allows for this “If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U.S. resident.” This election is not to be confused with the First Year Election from above. Since this election is not referenced as part of the FBAR definition of resident, I believe there is a loophole here to not file FBAR but still file a joint tax return.
If anyone has opposing arguments, please bring them up!

Hi
I withdrew my tax free savings account funds before I moved. Reason for this. They are no longer tax free when you move to the USA. So any Interest made in those account are taxable every year on your USA taxes. It's pretty annoying to have to claim that income. It sort of becomes like a regular savings account. That being said if you have a regular savings account the same thing happens. You have to pay tax every year on interest made. 
 
I put the money into an rrsp. The USA and Canada has an agreement that any amount your rrsps go up in value is tax free (from my understanding -anyome quote me if I'm wrong please ! ) 
 
I kept my pension account in canada aswell as from my understanding the total it earns was also tax free. (Please again quote me if im wrong)
 
I have money in my chequeing account (not collectng any interest) 
This helps if you are claiming unemployment insurance as they deposit into your Canadian account.
It helps pay back gst if they pay you in error. It also helps having an online account to pay your Canadian credit cards with if you are keeping your Canadian credit cards which I did and yes it is allowed since we are still Canadian citizens.
 
I also didn't want to exchange all my money to USD and put it into my USA account as the exchange is terrible and you lose alot of money so i plan to do this once the exchange levels out a little but more.
I however did take some money out to help me for the next few months.and yes I did lose alot of it because of the exchange and no i didn't have to pay taxes on bringing money into USA.
 
I did apply for a deducted discover it credit card to build my credit in USA. He bank and bmo bank in Canada would not help using my Canadian credit to get USA credit unfortunately. That being said I made a deposit on a secured credit card.
 
I didn't want to completely close my Canadian accounts because it is always nice to keep your credit rating going there but at the end of the day it doesn't matter if you never intend to move back. 
 
I went online onto canada.ca and updated my cra account to my new address. It was easy. If you receive gst credits that you are no longer eligible to get than you may still keep getting them but you can pay them back online aswell under canada.ca my payments (child family tax credits) and eventually your account will be corrected to USA and stop these payments.

I moved all my money from TFSA to Savings account since savings gives a better interest rate. There is no reason to keep your money in a TFSA since IRS will tax you on the interest you've earned.

You can file MFS or MFJ (or HOH with a qualifying non-spouse dependent).
Single is not a valid option for anybody married as of the last day of the tax year.
 
MFS is simpler but likely provides a higher tax liability. In this case she wouldn't even need to file as her re portable income is below the threshold necessary to file. You would file MFS and list her SSN or ITIN as needed, or NRA if she doesn't have one.
 
MFJ generally provides a lower tax liability. This requires that she has an SSN or ITIN.
In this case she she must be considered a resident alien for the entire tax year. As a spouse of a USC, she can provide a letter to be treated as such (although this letter means not being able to eFile).
Anybody considered a  resident alien must report their worldwide income.
The FEIE can typically exclude most to all of that income from being taxed.

You cannot file single. 

"If you are married and living with your spouse, you must file as married filing jointly or married filing separately. You cannot choose to file as single or head of household. If you do face a marriage penalty, you can't get around it by continuing to file as a single person. That's because if you're legally married on December 31, you're considered married for the full year and you must therefore file as either married filing jointly or married filing separately."

From TurboTax. 

The weird thing is....no evidence is required. You should have some kind of notes or documents on how you came up with your income and the conversion rate you used on the off chance that you got audited. 
 
Are you understanding the exclusion properly. Just because the maximum exclusion is in round numbers $100k a year, you only get to exclude what you earned. If you were only resident abroad half a year, then the most would be half the $100k.  
 
So let's say you qualify to exclude up to $50k because you were only resident in the U.K. half the year. If your income is $15k, then you exclude $15k. If your income is $60k, you are shut down excluding at $50k maximum based on only being abroad half the year. 

If you file a joint return, you must report worldwide income. If the mutual funds earned you interest, it is reportable and taxable income. But filing jointly gives your wife an extra $10,400 off her taxable income because you're on the return. (Your U.K.salary income is going to be excluded and not taxed so it is basically only her salary with the extra $10,400 off because of you.) That may work out better doing that if your investment income is less than $10,400.   You have to try various ways since you have some options. And if you have already paid UK tax on the investment income, you can have credit for foreign taxes paid. It's probably not as bad as you are imagining. 

A) Because you married a USC, you can be a resident alien even if you had zero physical presence so carry on with the resident alien plan of attack. 
B) You are going to have to figure taxes with your specific incomes and decide which is best. You can file jointly, or she can file Married filing separately and you file nothing (as long as you earn no US income by year end). Usually jointly works out best but you should run all scenarios.  When you file jointly, you must report worldwide income of both spouses. Yes, that is what you earned in the UK Jan 1 to July 4 converted to $$. You will qualify for the foreign earned income exclusion. Look up Form 2555EZ and read that.
 
Any investment income you earned (intest/dividends/capital gains paid to you in 2017) can not be excluded on your joint return. That is called unearned income and is taxed based on US rules. Basically if you earned $100 in interest and $8000 in dividends, then you have $8100 additional taxable income thrown into the pot with your (her) salary income.  Your balances invested are not taxed, just what they earned you in the tax year. A big gain on a house sale has some exclusion allowed so generally not an issue unless you owned a castle and made a big profit off the sale.  
 
Best thing for you to do is keep reading as you have been, and work through a tax return to see how the investments affect your bottom line. You will learn as you work through with some real numbers.  There is no one answer fits all tax payers. A US tax return is very individual specific. 

You can choose to either file as a dual status alien, in which case whatever you made prior to your first full day in the US does not have to be reported. A dual status filing can not be joint.
If you file married jointly you will at the same time choose to file with the election statement that you elect to be treated as a US tax person for the entire year of 2017, meaning everything you earned will need to be reported to the irs. Filing this way you can also use 2055 foreign earned income exclusion and exclude up to just north of $100k on the return from wages earned abroad. 
I am less sure about the investments but the only thing you will owe taxes on are gains - you don't mention what type of investments these are.
I believe I've read about exclusions for gains from house sale - but I could have dreamt that,  so leaving the floor open for someone with specific experience on investments while moving over. 

Hello all,
Question about taxes, because H&R Block hasn't called us back in 3 weeks and I figure I can sort this out on my own. (hopefully)
Our situation:
Left Canada on K-1 Visa on August 13, 2014. Got married on Oct 4, 2014. I worked in Canada before I left. Did not get my EAD until January 2, 2015. Called the cra to let them know I left Canada once I arrived in the US.
Now, when I file my Canadian taxes do I have to do anything special? I just tried it out on Turbotax and it does everything I ask it to, putting in my medical expenses, transit pass, all of that. Now do I have to add my US Spouse's information to my tax form? The Turbo Tax keeps asking what my Spouse's income is. Do I have to tell them that? We weren't married while I was a Canadian resident. (also it totally reduces my return amount)
Any help would be appreciated!
Thanks,
Sarah