Filing Status - US or Canada - Both really - international non-resident cross border income tax help estate family trust assista
QUESTION:
Used to work as a Statutory Employee via the Internet for an Employer in Salt Lake City (80 miles away), Utah USA.
In August 2006 we moved to BC, Canada (landed immigrant), and I continue to work for the same company via Internet and telephone.
Statutory Employee in the U.S means an employee who works from home and at own hours but is supervised by the employer. This fact is indicated on the Employee W2 and the employee files Schedule C 'Profit & Loss from Business' i.e. declaring the W2 income as business Income.
Since, I have moved to Canada they deduct staright 30% payment to non-resident tax from my pay-check. And issue a W2.
What I Want:
I wish to contribute into the CPP.
I do not want to fall under registration for GST/PST
I wish to claim home-use expenses, as I work from home into their Servers.
I wish to claim Foreign Tax credit both for the Federal and the BC tax returns (from the 30% withholding).
Question:
Under what filing status should I file my 2006 Tax Return? Salaried or Self-employed?
_______________________________________________________________________________Used to work as a Statutory Employee via the Internet for an Employer in Salt Lake City (80 miles away), Utah USA.
In August 2006 we moved to BC, Canada (landed immigrant), and I continue to work for the same company via Internet and telephone.
Statutory Employee in the U.S means an employee who works from home and at own hours but is supervised by the employer. This fact is indicated on the Employee W2 and the employee files Schedule C 'Profit & Loss from Business' i.e. declaring the W2 income as business Income.
Since, I have moved to Canada they deduct staright 30% payment to non-resident tax from my pay-check. And issue a W2.
What I Want:
I wish to contribute into the CPP.
I do not want to fall under registration for GST/PST
I wish to claim home-use expenses, as I work from home into their Servers.
I wish to claim Foreign Tax credit both for the Federal and the BC tax returns (from the 30% withholding).
Question:
Under what filing status should I file my 2006 Tax Return? Salaried or Self-employed?
david ingram replies:
If you are self-employed, neither your Canadian nor US returns are due until June 15th so don't get in a rush.
Your first tax liability after you moved to Canada is to Canada.
If they are paying you while you work in Canada, they should NOT be deducting any US tax let alone 30%.
If you are self employed in Canada you have to pay into the CPP and can NOT pay into US social Security.
You are not entitled to any foreign tax credit from the 30% withholding because you do not owe the US any tax for that period.
If they are just deducting tax and no FICA and Medicare, you are self-employed. If they are still dedcuting Medicare and FICA, they are in error because you are not working in the US.
I think from this brief bit that you are self employed. That means that if you are billing over $30,000 a year you HAVE TO be registered for GST.
______________________________-
david ingram wrote:
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
$1,600 would be for two people with income from two countries
David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty
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Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
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
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Be ALERT, the world needs more
"lerts"
David Ingram gives expert income
tax & immigration help to non-resident Americans & Canadians from
New York to California to Mexico family,
estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence &
authority.
Phone consultations are $400 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product remains in
Canada or a phone consultation is in Canada.
This is not intended to be definitive but in
general I am quoting $800 to $2,800 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
$1,600 would be for two people with income from two countries
$2,800 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 two or three slips and no capital
gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely
$450
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 $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00
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.
This from "ask an income trusts tax and immigration expert"
from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily
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