Posted on: 20-04-08 13:16:13
Hi Friends,
I became canadian citizen in sep 2007. After that I started living in Michigan, US (I work here too) from oct 2007. This is the last year I am filing my canadian taxes. I have my health cards, driving license, bank account and credit cards in canada. One of my friend told me to hold on to these until I file my CA taxes for 2007. He suggested to file the taxes as 'departing tax' and surrender all the above said items to relevent departments, so that I can make sure that I am not tax liable from next year.
I talk to a tax person who is going prepare my canadian taxes. He is telling me that I dont have to surrended anything but the health cards and i do not have to file CA taxes since I am away from CA for more than 183 days.
I am confused now. I certainly do not want any harassements from CRA after some years.
Please give me your valuable suggestion as always you did through out my immigration to CA.
Thanks in Advance.
Canada taxes you on residency so if you are keeping your residency in Canada ( health cards, family etc) you are a deemed tax resident for Canada for 2007.
When you break all your links with Canada . File a departing return (eg you break all links in Apr 2008. File a cdn departing return ( resident for 3 months only ).
File your US taxes and take foreign tax credit on the cdn return and you will not have to pay anything probably ( pro rate)
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We will find a way or we will make one
Hello Maniivannan,
We are in the same situation and we filed our Canadian Tax return yesterday and were shocked to find out how much we have to pay taxes for year 2007.
Our Accountant suggested that if you want to save taxes, next year, you have to surrender everything.
Does not matter how long you are away from Canada, if you have any ties (Health card, Driver's licence, Credit cards etc. ) you have to pay Taxes in Canada.
You can have bank account but have to change it to Non-resident Bank account status.
If you have RRSP cancel it after you become non-resident (in that case you'll end up paying 25% withholding tax otherwise it's 45%)
Quote:
Originally posted by apsingla
Our Accountant suggested that if you want to save taxes, next year, you have to surrender everything.
Does not matter how long you are away from Canada, if you have any ties (Health card, Driver's licence, Credit cards etc. ) you have to pay Taxes in Canada.
-- That's not really true. If you do not have a property (house) and no family (kids,spouse) in Canada, file as a Non resident. Yes, inform your bank of your NR status. If you forget, that's okay, just pay a NR tax to the CRA afterwards, they accept it.
Quote:
If you have RRSP cancel it after you become non-resident (in that case you'll end up paying 25% withholding tax otherwise it's 45%)
-- This is not true either. But will post some info once I find it.
I am cancelling my Credit cards and getting a New Driver's Licence in US.
http://www.cra-arc.gc.ca/tax/nonresidents/individuals/leaving-e.html#b
What are residential ties?
Severing residential ties may include:
disposing of or giving up a home in Canada and establishing a permanent home in the country to which you move;
having your spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants leave Canada;
disposing of personal property and breaking social ties in Canada and acquiring or establishing them in another country.
Other ties that may be relevant include:
a Canadian driver's licence;
a Canadian bank account or credit cards;
health insurance with a Canadian province
The main ties are house and a spouse. The other ties are not the main ones - like DL and health cards beocme irrelevant once you leave the province/country, since you do not use them.
Quote:
Originally posted by apsingla
I am cancelling my Credit cards and getting a New Driver's Licence in US.
http://www.cra-arc.gc.ca/tax/nonresidents/individuals/leaving-e.html#b
What are residential ties?
Severing residential ties may include:
disposing of or giving up a home in Canada and establishing a permanent home in the country to which you move;
having your spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants leave Canada;
disposing of personal property and breaking social ties in Canada and acquiring or establishing them in another country.
Other ties that may be relevant include:
a Canadian driver's licence;
a Canadian bank account or credit cards;
health insurance with a Canadian province
http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html#P161_33211
How to Obtain a Determination of Residence Status
International Tax Services Office
ΒΆ 27. Taxpayers requiring further general information about how residence status is determined for purposes of Canadian income tax should contact the International Tax Services Office (ITSO), Enquiries & Adjustments Division, at 1-800-267-5177 (toll free in Canada and the United States), or (613) 952-3741 (for service in English), or (613) 954-1368 (for service in French). Written enquiries should be addressed to
International Tax Services Office
2204 Walkley Rd.
Ottawa, Ontario
K1A 1A8
Taxpayers who plan to leave or have left Canada, either permanently or temporarily, should consider completing Form NR73, Determination of Residency Status (Leaving Canada), which can be found on the CCRA's website (www.ccra.gc.ca) or ordered from any Tax Services Office. Taxpayers who have entered or sojourned in Canada during the year should consider completing Form NR74, Determination of Residency Status (Entering Canada), which can be similarly obtained. Once completed, Form NR73 or NR74, as applicable, should be mailed to the address given above or faxed to (613) 941-2505. In most cases, the CCRA will be able to provide an opinion regarding a taxpayer's residence status from the information recorded on the completed form. This opinion is based entirely on the facts provided by the taxpayer to the CCRA in Form NR73 or NR74, as applicable, therefore, it is critical that the taxpayer provide all of the details concerning his or her residential ties with Canada and abroad. This opinion is not binding on the CCRA and may be subject to a more detailed review at a later date and supporting documentation may be required at that time.
PLEASE READ MORE ON THE WEBSITE THIS IS JUST ONE PART OF IT!
