QUESTION: After months of searching, I finally found a site that can answer
my question. I currently manage a call center in New Brunswick that is
outsourced by a US company. I have been offered a position to work directly
for the US company and the position is based in Canada. I will be paid in
US dollars directly from the company. My question is, how does this all
work? After reading many of your answers, I realize that I will need to pay
taxes to the US and Canada. Is there immigration issues related to this? I
will be traveling to the US to attend meetings and performing audits of
various offices owned by the company. Would I need a Visa for this? This
is an opportunity of a lifetime for me and I don't want anything to go
wrong, so I am trying to cover all my bases before I sign the contract. Any
information you can give me would be greatly appreciated.
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david ingram replies:
If your work is performed in Canada, you will only have a Canadian return to
do even if paid by a US or a Great Britain or Spanish Company.
However, if the company gets you a visa to work in the USA and you earn more
than $10,000 in the US (based on per day, per week, as a percentage of your
etc.) for the time spent in the US, you will owe tax to the US on that money
but it is not double taxation. Canada will give you credit for every cent
of the tax you pay to the US. Even if you only earn a couple of hundred
dollars, you must still file a US return because you "are" working in the
US. You file the return to claim the exemption from tax under Article XV of
the US / Canada Income Tax Convention.
If the company does not want to start a payroll, they might hire you as a
self-employed contract worker. If this happens, you are responsible for both
halves of the CPP and are not eligible for EI or Holiday pay.
In either case, you will have to file a Canadian return reporting all of the
earnings. If you are an employee, the company should be deducting income
tax, CPP and EI from your
If you have been working for them for a year, they can get you an L1 visa as
an intra-company transfer.
If you have a CA or CGA or RIA degree, they can get you a TN visa for the
auditing job in the US.
GO TO www.centa.com and read the "Entering the USA" section in the second
box down on the right hand side for an explanation of the different visas
available.
--------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>
Disclaimer: This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing in
this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance, preparation, or
consultation in connection with personal or business affairs such as at
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David Ingram expert income tax help and preparation of US Canada Mexico
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self-employed and royalty foreign tax credits
This from "ask an income tax and immigration expert" from www.centa.com
<http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or
www.featureweb.com <http://www.featureweb.com/> . David Ingram deals on a
daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems for the
United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai,
Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France,
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Phone consultations are $400 for 15 minutes to 50 minutes (professional
hour).
This is not intended to be definitive but in general I am quoting $800 to
$2,000 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two interest slips and you
lived in one country only - no self employment or rentals or capital gains -
you did not move into or out of the country in this year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no rental
$1,200 would be the minimum with a move in or out of the country. These are
complicated because of the back and forth foreign tax credits. - The IRS
says a foreign tax credit takes 1 hour and 53 minutes.
$1,500 would be the minimum with a rental or two in the country you do not
live in or a rental and a business and foreign tax credits no move in or
out
$2,000 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection
period) with a three or four slips and no capital gains, etc. for $125.00
up.
With a Rental for $300
A Business for $300 - Rental and business likely $400
And an American only (lives in the US with no Canadian income or filing
period) with about the same things in the same range with a little bit more
if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS
be $400 and up.
TDF 90-22.1 forms are $25 for the first and $10.00 each after that when part
of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales) are likely $50.00 for the first and $20.00 each after
that.
Just a guideline not etched in stone.
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