My_question_is: Applicable to both US and Canada Subject: Working in the US and Living Canada Expert: taxman at centa.com Date: Thursday February 15, 2007 Time: 12:22 PM -0500 QUESTION: I am married to a Canadian woman and we reside together in Canada. During transition of converting my citizenship to Canada I am still employed by a US company. I work from home (in Canada) and draw a salary from a US company. I am required to travel there and work from the local office Seattle office every other week for a couple of days. My concern of course is taxation. What do I need to do? I make less than $65,ooo.oo US per year. My wife is employed here in Canada and I live here with she and our son. The company I work is small and does not know how to tax me in any other way than if I lived in the US. An you help? Thanks, --------------------------------------------------- david ingram replies: 1. If you are a member of a 401(K) and putting money into it, stop now. Canada will not allow the deduction now and tax you on the money when it come out. OUCH!! 2. You could be paid as a contractor on a 1099. If so, the company should pay you everything you are getting now PLUS their half of Social Security and Medicare, whatever they pay for unemployment insurance and whatever they put into a 401 plan if you have one. 3. Either way, you are a US citizen and being paid in the US. You will file your US return but should be figuring out how much was actually earned in Canada. You would then owe tax to Canada first on the money earned in Canada (even if paid for Seattle) and the US first on the money earned in Seattle. You would then claim foreign tax credits on form 1116 to claim credit for the tax paid to Canada first and put the US tax, Medicare and Social Security you paid and the net US income on lines 431 and 433 of your Canadian return. Glad to look after them for you if necessary. ============================== 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 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) 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. 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