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Hello, I have just spoken to my Canadian accountant being ...

Hello, I have just...
Hello, I have just spoken to my Canadian accountant being that I reside in the USA. I haven''t filed my taxes with him since 2000. because i only file 4 NR4''s a year that pertain to music royalties I get which generally don''t exceed $3000.00 /yr. Last year I made about 17,000.00 so I knew that I should file this year and catch up as I was gonna have to pay something in 2007. I was just warned that because they have me down as a non resident ( according to the NR4, they didn''t with hold any funds since 2000), I will be paying at least 5 to 6000.00 dollars on 2007 alone not to mention if they will addcompound interest on all the other years.   I didn''t relize they somewher down the line changed my status even though I keep a canadian address to Non resident! Help!!!
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Answered in 1 hour by:
3/1/2008
Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10,760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Verified

Do I understand correctly that you will be filing taxes in Canada as a non-resident?

Talks to your accountant again.

There is a tax treaty between the U.S. and Canada, where you get credit for taxes paid to the U.S.

 

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Customer reply replied 9 years ago
Reply to Ed Johnson's Post: Let me clarify. The only taxes I pay in Canada are these royalty statements I get from my Canadian music representatives ie: Socan CMRRA, Sodrac. I exclude these taxes when I am doing taxes in the USA. In other words I don't declare these monies from Canada Stateside. Do I still qualify. My acct told me because I am seenas a non resident and they didn't with hold any monies, A) I have to pay a much highter rate of taxes and B) nothing is deductible!

Dear Sregga,

The answer to your question is that your accountant is correct. As a non-resident this is Part III income and you are subject to Part III tax of 25 percent\. (Unless a tax treaty allows you to treate it differently).

http://www.cra-arc.gc.ca/tax/nonresidents/individuals/nonres-e.html

I understand that you are Canadian and this is money that you pay into Canada.

But Canada consider's you a non-resident, AND the U.S. Taxes you as a permanent resident or U.S. Citizen. The U.S. asks that you report world wide income, unless specifically excluded by treaty.

I think you and you accountant may mis-handling your taxes. I am not arguing that you do not report this income in the U.S., or how you are doing it. It may be more beneficial for you to report this on U.S. taxes.

Pehaps I should not be opening that can of worms. But I want to make sure you are getting the best treatment as you can for your taxes.

Here are two documents that you should look at:

http://www.irs.gov/businesses/international/article/0,,id=169503,00.html

 

Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10,760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Customer reply replied 9 years ago
Thank you so much, I appeciate your time.

Dear Stregga,

Thanks, XXXXX XXXXX welcome. best of luck to you.

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