working for Milwaukee Company in New York State, USA while living inToronto, Ontario, Canada

QUESTION:

Hi,

I am about to accept an offer of employment for a US company based in
Milwaukee. The work is management consulting for their clients mainly in NY
state. I will keep my residence in the Toronto area and will be traveling
in the US from Monday to Thursday every week. I will not have an address in
the US other than various hotels.

I plan to enter the US under a TN visa though I have not been approved yet.
I do have experience as a consultant and have my MBA.

I am wondering if you can answer these questions for me:

1) I believe I would have to pay taxes to both the US and Canada but to what
state would I pay to?

2) Is there anyway I can find out roughly how much combined taxes would be?

3) Would you recommend contributing to 401k and rrsps?

4) I am fully covered for health,dental,vision under my husband's plan.
This includes while I am out of Canada. Have you ever heard of US companies
paying cash to an employee instead of the benefits?

5) Do you see any reason why I could be denied a TN?

6) Is my return something you can help me with? How much would you charge
to file a return of this type? I am married but my husband lives and works
in the Toronto area. I'm not sure if we should file together or not?

Many thanks,


david ingram replies:

1. If you are working in New York State, you will pay tax on the US earnings to New York State for the work performed in New York State. If you find yourself working in New York 4 days a weekand working at home in Toronto two days a week, you would likely pro-rate the amounts and only pay on two thirdss of the money receiived. On the other hans, if you find yourself working in wisconsin 2 days a month, you should pro-rate that out and file a non-resident Wisconsin returns as well.

You will then report all the same money on your Ontario/Canadian T1 return and claim a foreign tax credit for the taxes paid to the states.

2. Sure but, I (or anyone else) will / should charge you.

If you want to send me an estimate of what you will be paid in the USA, I can do New York, federal and Ontario/Canadian estimates for you. I would charge you $350.00 Canadian. Contact addresses and numbers are below.

3. RRSP's YES, 401 (K )NO NO NO - Canada will not give you credit for the deduction and tax you again when you take it out. Arrange your contract wot receive the Company's 401(K) contribution as extra salary. Tell them to phone me if they have a problem.

4. Yes, but make sure that your husband's policy covers you while you are "working" in the US at a job being paid for by a US employer. Get that assurance in WRITING. Do not accept a clerk's word or a pamphlet. Get teh comapny to write you a letter stating that you are covered while woirking ion teh USA for XXX Company in Milwaukee, etc.

5. Anyone can be turned down for a TN. However, if you have five years experience in the field that you are going to consult in, there should not be any problem.

6. Yes, that is what I do. Your husband will file his return, you will file yours. We need his line 236 Net Income figure to complete your return if he has a low income. . However, If his income is over $10,000 and yours over $30,000 I can just guess his figure and do not need the return.

To do the actual returns, I would likely charge $700 Canadian.

Hope this helps.

Trackback

Trackback URL for this entry: http://www.centa.com/trackback.php/20060814173233354

No trackback comments for this entry.

0 comments