Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

My husband now works in Alberta, Canada 10 out of every 14

days for a Canadian company...
My husband now works in Alberta, Canada 10 out of every 14 days for a Canadian company. He is under a "work permit". He received a T4 Statement of Remuneration Paid from Canada for his taxes paid there. He worked for half the year in the U.S. We have someone completing the tax returns after I file the extension for the U.S. today. I am wondering which forms on the U.S. tax return do I use and where do I put the Employment Income and Taxes Deducted from the Canadian T4 on the U.S. return and how to handle it. I know that sometimes the taxes paid is a credit and sometimes a deduction, but I'm not sure how to handle our situation. Because he only worked less than half the year there, I don't know if that affects your answer, although going forward, this is his permanent job. Thanks for your help.
Show More
Show Less
Ask Your Own Tax Question
Answered in 24 minutes by:
4/15/2013
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,641
Experience: Taxes, Immigration, Labor Relations
Verified

LEV :

Hi and welcome to Just Answer!
Several issues...
1.
He will report foreign wages on the US tax return similar to wages received in the US - on form 1040 line 7.
2.
If the same income is taxable abroad and in the US - you may claim a credit for taxes paid abroad - so the same income would not be taxed twice. Use the form 1116 -http://www.irs.gov/pub/irs-pdf/f1116.pdf please find instructions here - http://www.irs.gov/pub/irs-pdf/f1116.pdf
The credit is limited by the US tax liability on the same income - the form 1116 is used to calculate the amount of credit. Means - if tax liability abroad is higher - there will not be US taxes on that income, but if tax liability abroad is lower - in the US you will pay the difference after the credit will be applied.
As an alternative - foreign taxes may be deducted on schedule A. But in most situations - a foreign tax credit is more beneficial.
3.
In additional - because his assignment is less than a year - your husband is eligible to deduct unreimbursed travel expenses.
Generally - you must use Form 2106 to figure your deduction for employee business expenses and attach it to your Form 1040. Your deductible expenses are then taken on Form 1040, Schedule A , as a miscellaneous itemized deduction subject to the 2% of adjusted gross income floor.
If that is his permanent work assignment - travel expenses are not deductible.

Customer:

Hello. Thanks for your quick response. I am sorry that I have been unable to connect to live chat. I tried it on 2 different computer and it wouldn't work. Based on your response, I should enter the income in the section requesting w-2 info, then show as a credit on the form 1116, correct? I am just filing an extension and estimating the tax due today because the accountants cannot complete the return by today.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,641
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
I switched to Q&A mode - so you may see this page from any computer.
Sorry for confusion.
You may continue asking questions - but in different mode.

Q.Based on your response, I should enter the income in the section requesting w-2 info, then show as a credit on the form 1116, correct? A. - yes that is correct
Q. I am just filing an extension and estimating the tax due today because the accountants cannot complete the return by today.
A - Filing for the extension is the best approach in this situation. Be sure to pay your estimated tax liability - that will help to avoid possible penalties. If overpaid - you will get a refund when your tax return will be submitted.
Please be aware that you need to request a separate extension from North Carolina - see details here - http://www.dor.state.nc.us/electronic/d410.html
Be sure to ask if you need any help.
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,641
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 4 years ago
Hello again. I have an additional question regarding my NC state tax return. Where will the Canadian income and tax payments go on that return? Are there any special forms or other boxes I will need to fill out?

Welcome back!

 

If you are a resident of North Carolina and have income reportable to North Carolina that is also being taxed by another state or country, you may be entitled to claim a tax credit on your North Carolina return. This tax credit gives you relief from being taxed twice on the same income. It will either increase your refund or decrease the tax you owe.

The credit is available to North Carolina residents who receive income from sources in another state or country that is taxed by North Carolina and the other state or country.

 

After completing the return of the other state, complete your North Carolina return and include all income from inside and outside the State. Compute your tax as though no credit is being claimed. Complete Part 1 of Form D-400TC to determine the allowable tax credit. A common mistake is to enter on line 6 of Part 1, the total tax withheld by the other state or country. The amount entered on line 6 of Form D-400TC, must be the tax paid to the other state or country less any refund received, or expected to be received, from the other state or country. The credit cannot be more than your North Carolina tax liability; therefore, you must complete Part 4 of Form D-400TC to limit the credit to the tax liability.

 

Attach the Form D-400TC to your North Carolina return with a copy of the tax return filed with the other state or country. You should also include proof of payment such as a wage and tax statement or a copy of the check or receipt if you paid tax to the other state or country.

http://www.dor.state.nc.us/downloads/fillin/D400_D400TC_webfill.pdf

Ask Your Own Tax Question
Customer reply replied 4 years ago
Would I need to use the foreign exchange rate on each date my husband was paid in 2012 and document that in an attachment? Is it different for federal vs state? Or is it the foreign exchange rate as of 12-31-12? And is that the date to notate on form 1116, part II letter j?
You need to use the same exchange rate for federal and state tax purposes.
In general - we need to use the exchange rate prevailing when you receive, pay, or accrue the item.

However, if you receive income evenly throughout the tax year, you may translate the foreign currency to U.S. dollars using the yearly average currency exchange rate for the tax year.
http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates


<table border="1" cellspacing="0" cellpadding="5" summary="Yearly Average Currency Exchange Rates">child last-child">id="tbl11id0_0" class="first-child" scope="col">

Country

Currency

2012

2011

2010

2009

2008

2007


Canada

Dollar

1.040

1.029

1.072

1.187

1.109

1.117

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,641
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 4 years ago


Hello again. I am just unsure how I need to enter the income from the Canadian T4 on the 1040. I know you said to enter it on line 7, but the H&R Block tax software seems to want to take me to foreign earned income. And I don't see how to enter it on line 7 without "faking" a w-2. Thanks for your help today.

Sorry - I am not familiar with any specific software - but there should be an option to report a foreign wages without "faking" a W2.
You may use substitute W2 form - www.irs.gov/pub/irs-pdf/f4852.pdf‎
however - in this case you would not be able to e-file.

Ask Your Own Tax Question
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,641
30,641 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
My question is: Is the foreign tax credit 100% Offset to the
Hi, my question is: Is the foreign tax credit 100% Offset to the Alternative Minimum Tax, if there are only foreign income? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
I want form 1040 along with schedule A for years 2016 and
I want form 1040 along with schedule A for years 2016 and 2017 - NOTB eFile, just the old fashion forms that I complete with a pen,p. … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
What are the forms for reporting Rental Income to the IRS on
What are the forms for reporting Rental Income to the IRS on foreign properties - we collect each month? Is this filed separately from our personal returns?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,068 satisfied customers
Under the new tax plan if my federal adjusted gross income
Under the new tax plan if my federal adjusted gross income is $77,230.00 how much are my federal taxes? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
On line 37 my 2015 Form 1040 I had an adjusted gross income
On line 37 my 2015 Form 1040 I had an adjusted gross income of $291,546. on my Amended 1040X for 2015 I have taxable income of $179,542. How do I get proof of this to get an adjusted MAGI to give to M… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
Is the deduction for medical expenses on Schedule A repealed
Is the deduction for medical expenses on Schedule A repealed under the new tax law & can health insurance premiums for a Schedule C proprietor still be deducted on page 1 of Form 1040?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
I filed an extension on my tax return because I didn't know
I filed an extension on my tax return because I didn't know my tax credit. when do I need to have tis complete. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
FOR GUILLERMO: What line on the 1040 income tax return is
FOR GUILLERMO: What line on the 1040 income tax return is used to determine the sponsor's income for Form I-864? Is it line 22: TOTAL INCOME? Or, line 37, ADJUSTED GROSS INCOME?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
W, is there a amend tax return there at IRS there for me? My
Hi, my name is ***** ***** Miller, is there a amend tax return there at IRS there for me? … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
64 satisfied customers
If someone has obtained my tax return and w-2 without my
Good morning. If someone has obtained my tax return and w-2 without my permission as well as showing it to other people, is that legal? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
For a ny state partnership tax return, if you file an
For a ny state partnership tax return, if you file an extension but don't pay anything and then end up owing a lot. Do they still recognize the extension or do they charge a failure to pay penalty (fo… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Form 1120, cash basis. If Taxes paid to IRS are deductible,
Form 1120, cash basis. If Taxes paid to IRS are deductible, are refunds for overpayment the equivalent of income?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,068 satisfied customers
I have a schedule e form that I filed for extension (2016).
I have a schedule e form that I filed for extension (2016) . I attempted to send in time online but was thwarted by my own incompetence to follow directions basically. I saw that if I used a free form… read more
Lev
Lev
Tax Advisor
30,641 satisfied customers
I filed for an extension to file my 2017 income tax return.
I filed for an extension to file my 2017 income tax return. I recently suffered a stroke - 6 weeks ago - and have been unable to finalize my return. I should be able to file it within the next 30 days… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
How can I get an extension to file federal and state taxes
How can I get an extension to file federal and state taxes for 2016 … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
RE: FOREIGN TAX CREDIT We're filing a married joint filing
RE: FOREIGN TAX CREDIT We're filing a married joint filing tax return and have come up against some problems on form 1116. 1) Do we add both our names on the form? 2) On line 3a, it asks for certain i… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
I filed an extension for 2013 tax return but no actual tax
i filed an extension for 2013 tax return but no actual tax return. Do I have until Oct. 15, 2017 to file for refund?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2 FROM HER EMPLOYER WITH A TYPO IN THE SOCIAL SECURITY NUMBER. TO DATE THE EMPLOYER HAS NOT PROVIDED A "CORRECTED" FORM W-2. IS THERE AN IRS "… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,275 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x