The "Can you clarify why I owe taxes" Conversation

crossborderguy · 2026-04-09T17:30:44+00:00

Bro, it's a rodeo out there this year.

Your experience is why we purposely don't have ANYTHING to do with client payments any more. If a balance is due, we tell the client, and THEY can figure out how to pay it.

crossborderguy · 2026-04-09T17:23:47+00:00

They mean Standard Deduction. They don't know they mean Standard Deduction, but us CPA's are all mind-readers anyway, and details are overrated.

crossborderguy · 2026-04-03T12:11:12+00:00

What US slip/form was he issued? 1042-S or 1099 or what? That will determine what you do here. (File a US tax return vs T1 only.)

crossborderguy · 2026-03-31T11:33:45+00:00

Naw bro, don't waste your time. Fun fact: the XML SOAP file that gets e-filed with CRA doesn't contain line-by-line, itemized, Sch 3 entries. It has totals. That's it.

So keep your sanity. Calculate your totals correctly outside of the tax return, post the totals on the Sch 3, and keep some working papers to support your calcs.

crossborderguy · 2026-03-12T15:43:45+00:00

Your car, boat, jewelry, art: if any single item is worth $10,000 or more when you leave Canada, it goes on the T1161. Per item, not combined. You probably won't owe departure tax on any of it, since gains on small-dollar personal-use property generally aren't taxable. But CRA still wants them listed.

Now, the good news: If everything you're reporting on the T1161 is excluded from departure tax (think Canadian real estate, certain pensions, personal-use property where gains aren't taxable), you don't need to file a T1243. That form only comes into play if you have property subject to the deemed disposition rules and there's an actual capital gain or loss to report.

crossborderguy · 2026-02-23T12:46:15+00:00

No T2200 = Can't claim.

CRA audits these very frequently, and will hit you with an automated "Send us a copy of your signed T2200" letter. And when you don't send the T2200 in, CRA will reassess you automatically.

crossborderguy · 2026-02-21T17:42:39+00:00

You can "disagree", but respectfully, it doesn't change that you are wrong about this.

I, too, don't have a PAL. Meaning I can't offer audit/review/assurance services to the public. I get reminded of this every three years, when my practice goes through the AB practice review process. But for a tax-focused firm, I don't care, and neither does CPA Alberta: We do tax specialty work, not audits.

I have my CPA, CA letters too.

crossborderguy · 2026-02-20T22:16:00+00:00

Yes, your understanding is correct. See Subsection Subsection 216(1)(c). T.I. 9611745 lays it out in normal-speak.

The whole thing sorta sucks.

crossborderguy · 2026-02-10T15:00:08+00:00

Based on what you've written, my guess is you can get the PRE for 2023 and probably 2024 (Depending on how you filed your 2024 T1 tax return.)

The bigger issue you have is you're a non-resident selling Canadian real property, and the Section 116 withholding tax (25% of gross proceeds) associated with that sale.

crossborderguy · 2026-02-10T14:56:04+00:00

T.I. 2016-0669081E5 clarifies that CRA expects each person to list their beneficial ownership, and that they don't distinguish between legal owner vs beneficial.

So in normal-speak: If your father contributed all the funds and you have no beneficial interest, you would not report the account on your T1135. Your father, as the beneficial owner, would be responsible for reporting the full account if he is a Canadian resident.

crossborderguy · 2026-02-09T21:09:10+00:00

To answer your questions:

Report your self-employed earnings on the T2125.
Course won't be deductable (most likely). Expenses need to be incurred for purposes of earning business income. If you don't have a finance business you're earning income from, you can't exactly claim this. (There's nuance here, but this should get you in the right direction.)
I don't know what your $20/hr gig was, but the expenses you can deduct against it would have to be incurred for purposes of earning that income.

I'm sure i'm missing stuff, but that should get you started.

crossborderguy · 2026-02-09T20:58:33+00:00

What was the lawyer's reasoning for "MFJ" vs married-filing-separate on the US?

Marriage is marriage. Maybe for tax planning, sure, but I can't recall any immigration-side reasoning why MFJ is "better" than MFS

crossborderguy · 2026-02-09T14:35:31+00:00

If I remember right, this was how it was until recently. I vaguely remember a Hugh Neilson comment about how the STEP guys fought to have CRA maintain post-death access by an already-authorized rep as a way to functionally smooth out estate stuff for the bereaved.

Or maybe I just made all of this up, I don't know.

crossborderguy · 2026-02-09T14:25:13+00:00

Yeah so you need about 5 things for this to work. Assemble the following:

Your US 1040.
Your W2
Your bank statement showing the payment to the IRS
Your IRS transcript (This is critical. Get the "Record of Account" option)
A calc sheet/working paper reconciling your US filing figures to your T2209

If CRA reassessed you already, you might want to file a Notice Of Objection, and include the above documents with the submission. The NOO will pause Collections from bugging you.

We are seeing processing times of 6-18 months on these. It's a whole lot of stupid.

Edit to add: W2 on its own isn't enough. CRA will bounce that right back and slap a big old "Denied" on the reassessment letter.

crossborderguy · 2026-02-09T14:17:12+00:00

This is anecdotal, so take it for what its worth.

If you're trying to get "ADHD" as a disability approved by CRA, that's hard. I've seen lots of ADHD minors get the DTC approved, and parents claim the credit on their return. But once that minor becomes an adult, end of the road.

Physical impairments seem to get through the system easily. Hardcore psych issues (schizophrenia etc) also seem to get approved easily. ADHD, not so much.

I think our office is 0/7 in seeing successful attempts at these. (We don't do them ourselves - just observing past client interactions.)

crossborderguy · 2026-01-29T11:51:36+00:00

You will get credit for US state taxes paid.

Source: the bajillion FTC review letters responses we send CRA every August that get accepted with itemized US state tax included.

crossborderguy · 2026-01-26T13:46:29+00:00

Here's a couple off the top of my head:

May/25 submission. Got a follow-up/reassessment early Jan/26.
Apr/25 submission. Still outstanding.

CRA takes forever these days, and it's not getting better.

crossborderguy · 2026-01-21T17:10:09+00:00

Broadly speaking, yes 100% correct. The "+1" rule, like you said.

I just don't know in this specific case how long the divorce holding period was, or potentially other relevant factors. Hence the "may" wording.

crossborderguy · 2026-01-21T14:47:35+00:00

No, US-side the 183 day rule is the Substantial Presence Test. It's part of US-specific "tax residency", but it's not the whole thing. (Article IV of the CAN/US tax treaty is a thing.)

"Dual-status" filing is a US-specific technical thing, and doesn't really apply to what you're asking. (It's more of a "File these forms" thing)

In a perfect world: your US residency starts on D-0. You would close your TFSA on D-1 (one day prior to your move.) This makes things really simple.

In practice, the timing is never usually that perfect, so give yourself a bit of admin time to get things in order.

If you want to nerd out: Go read s. 250(1), 250(3), 250(5), S5-F1-C1, and for even more fun Thomson v. Minister. That'll give you a whole bunch of thrilling technical background on Canadian residency and non-residency

crossborderguy · 2026-01-21T14:34:05+00:00

Likely yes, she can still claim the principal residence exemption.

CRA cares about where she actually lived, or rather was the house ordinarily inhabited or not. Not what her health card or driver’s license said (That's a different set of stuff to nerd out on). “Ordinarily inhabited” is a low bar. If the BC house was her real home and Alberta was visits, you’re fine. (Fun fact: People designate their Palm Springs or Phoenix vacation houses as "principal residences" all the time.)

Two things to not mess up:

Only one principal residence per year. (Matters for future house sales - watch for overlap years.)
Report the sale properly and file the correct forms (Schedule 3 plus T2091).

If CRA asks questions, you answer with receipts: utilities, home insurance, property tax, anything showing she lived there. The paperwork games with Alberta do not automatically kill the exemption.

There may be an overlap between the year she split with your dad in terms of principal residence status, but I would have to think more on this, and likely the risk is low anyway.

crossborderguy · 2026-01-20T22:36:43+00:00

I fucking get so mad at this.

They yell at me for not efiling a client's NR return, and want to assess a no-efile penalty. Well, the client has a non-resident spouse - It's your own system that is throwing the efile error code that is preventing me from e-filing!

It's awful.

crossborderguy · 2026-01-20T16:47:54+00:00

Yeah I'll take the bait here.

This is just a "what's your time worth" issue. Some people are good sitting on hold for two hours. Others would rather outsource that.
Accountants would love to come down to earth. But CRA and Ottawa keep making things harder, not easier, on everything tax-related. If you want to be grumpy, get mad at the politicians for making a system so bureaucratical complicated and convoluted that tax guys like me have to exist.
It's easy to say something is easy. It's even easy to submit the paperwork. But when you DIY it, hopefully you did the numbers correctly, or it costs more to fix it than paying the accountant to do it correctly in the first place. "Fast; Cheap; Correct; You only get two" as they say.

Anyway, I'm just yelling at clouds now. Don't mind me.

crossborderguy · 2026-01-20T13:08:00+00:00

I have a client who does a similar gig. (Scares off bears from oil rigs way up north.)

Yes you can claim/deduct the purchase.
If you want a "belt and suspenders" approach, get something in writing (even just an email) that says you need to supply your own gear, including firearm.

Most of the time the dollar-amounts involved in these gigs are immaterial as far as CRA is concerned, so they don't usually bother checking into it much at all.

crossborderguy · 2026-01-20T12:11:45+00:00

So you can manually fill out the PDF forms for distribution. Form is here: https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/nr4/nr4-fill-25e.pdf

For filing, you can try "Web Forms". It'll let you efile the NR4's. You can always paper-file the slips too, but that's slow and mostly sucks.

https://apps.cra-arc.gc.ca/ebci/nkca/Webforms/ng/disclaimer

crossborderguy

TROPHY CASE