Hi David and Partners,_______________________________________________________________
I think I am in need of some serious US/Canada tax advice by telephone, and
help in filling out my forms.
My problem is as follows and I would appreciate if there is anything,
immediately, I should be doing to resolve this:
I am a dual Canadian/US citizen, married to a Canadian citizen living in
Montreal, Canada, where we own a house, have health cards, etc. I
telecommute with 4 US companies, and have a small Canadian business income
from my own business. My wife also has a very small Canadian business income
from her own business.
I originally filled out my W4 for these US companies with a US address
across the border where we often visit, collect mail, etc., and have a bank
account (we used to live and work in the US from 2000-03). I was under the
impression that that was sufficient enough for them to withhold tax on my
income, given that I am a US citizen. I would then claim the tax back in my
tax claims to both countries. This I have done in my 2003, 04 and 05 tax
forms and tax was returned to me as asked. In my US tax forms I noted that I
live permanently in Canada, filing Form 2555 each year, and form 90-22.1. In
my Canadian tax forms I note the income as foreign.
I have not informed US social security that I live in Canada, and only
learned recently that that should have been done. SS is withheld on my US
pay stubs, however I typically get all social security fees back when I
submit my tax forms to the US.
I am NOW of the understanding that the US employers may be subject to fines
for hiring me as a Canadian resident, and I may be subject to fines for
filling out the W4 incorrectly. My employers have no provisions for hiring
Canadian residents, and were I to fill out my W4 with a Canadian address,
they would probably cancel my employment.
How do I make this situation normal and legal? Did I, in fact, fill out the
W4 incorrectly? If it was incorrect, as I see it, I have two options:
1. Inform my employers I live in Canada and thus lose my work. Prepare for
criminal charges, getting fined and/or sued by the employers for an
incorrect W4 statement of residence. Perhaps re-submit previous tax forms,
but I am not sure why. I probably should tell US social security where I am
officially too.
2. Move to the US right away. Dispose of all Canadian assets (house, bank
accounts, RRSPs). Still be prepared for fines, however, my W4 would now be
"correct" and, hopefully, my work secure. And yet even with this option I
fear that 3 years of incorrect W4s will net me fines, and perhaps my
employers will get fines, and I still may lose my job.
Thanks for your help with this tricky situation. There are other
complications, but I think this is the biggest one for now.
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CEN-TA Cross Border Services - Tax, Visas, Immigration
http://www.centa.com/article.php/20070430140042740