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QUESTION: I am a Canadian citizen who owns an Incorporated Enginering Consulting Company. A registered professional engineer, I am the principal shareholder and one of three employees (the rest are family). The firm does oil and gas consulting worldwide. Although a resident of Canada, I do not work in Canada, or generate any significant domestic income. One of my clients desires me to work in the US six months of the year. In effect I will become a "Snow Bird" living in the US from Oct through March, and in Canada from April through Sept. Can I consult for this firm on a visa and bill in Canada through the Canadian entity, using a TN-1 management Consultant visa? If not (and I suspect not), I assume that given a letter from that employer, I can work either as a contractor or contract employee. As an employee, the tax ss etc are straighforward. As a contractor, do I have to form a business presence in the US, or is it treated more or less like self employment in Canada!
, with quarterly tax and witholding payments?
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david ingram replies:
You will need YOUR company to get you a TN visa as a professional engineer. That will be easy. then your client pays your company and your company will pay you.
You will then have to decide how you are going to pay your US federal and likely a state tax if in Oklahoma or California or Louisiana. There is no state tax return if you go to Texas but if you work in more than one state, you have to file a return for each state you work in.
You will pay yourself as an employee. You should write to the CRA and get them to give your company permission to reduce your Canadian tax withholdings because you will have to pay the US (and maybe a state or two) tax for the time you are down there.
Remember, that just about every cent of tax you pay to the US will be deducted from your Canadian taxes.
This only applies to you. If you have other employees that you wish to work int he US, I would need more information about them.
Then I start charging as a consultant.
Good luck!
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