Dual Citizen Lving in Canada - US Source Income = ask a

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QUESTION:
I am a Dual Citizen (born in U.S., recieved CA citizenship 2 years ago). I am currently living and paid in Canada. I have been filing taxes in the U.S. and Canada. I have recently been offered a position with a U.S. firm that does not have a Canadian payroll. They would like me to be paid in the U.S. and continue living in Canada. I would work in both Canada and the U.S.. I pressume I would have to establish a P.O. box as a residence in the U.S. ?? I have been struggling to find out if this is a possibility/legal and determine what the tax and social security/CPP implications are ? Will I pay more taxes ? I would assume they would take U.S. taxes and social security out of my check, would I still be eligible to receive CPP if I retire in Canada ?
Any assistance would be greatly appreciated,
Sincerely,
XXXXXXXXXXXX
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david ingram replies:
Well, you are likely doing it right now  but can end up in deep doo doo if you accept the job as described.  luckily, you are able to take advantage of your dual citizenship and will or should be paid handsomely for your ability to cross the border and work on both sides with impunity.
You are taxable on the money earned in the US first by the US and secondly by Canada because you are going to be living in Canada 
You will be taxable in Canada first on the money earned in Canada and in the US second because of your citizenship.  However, if you are truly living in Canada, the Canadian income will be eligible for the 2555 exclusion of up to $80,000 (pro-rated by number of days worked in Canada). Foreign tax credits will take care of double taxation.  
Make their establishing a Canadian Payroll a part of the job. I guarantee that you will be able to figure out the deductions yourself.  You will not fit into a PO Box in the US no matter how hard you try.  
In an ideal world (in my opinion) they would pay you in Canada from the Canadian payroll and in the US from their US payroll.  Let them do the bookwork.  
I could write a book on this but have too much to do now with the next three weeks of tax season.  I hope this has helped.
If you really want to go into this deeper, you should arrange a phone consultation by calling (604) 980-0321.  
The charge would be $350.00 Canadian for up to an hour.  I would suggest that you might want to make it a conference call with your potential employer.
I have also added you to my US Canada mailout list which gets three to five suggestions about US / Canada income taxation a day.
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