QUESTION: I am a Canadian Citizen (born in Canada) - last year, my husband
took a job in the US on a TN visa (therefore, I received a TD). Because I
could not work in the US under a TD Visa, I continued to do consulting work
in Canada using our address in Canada. I physically was in the US for the
almost the entire calendar year in 2006. What are my tax implications of
doing so? Do I pay taxes in Canada (FYI, I did have a GST number and paid
GST), or should I be paying taxes in the US as I was not in Canada.
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david ingram replies:
Assuming that you did the work from the US, you have no tax liability in
Canada.
You should file your joint US return with your husband and include a
schedule C showing your income earned in the US.
On the other hand if you were up in Canada every two weeks for a day and
worked out of a house you still own in Canada, you would owe tax on some of
it to Canada first and the rest to the US first.
If the home in Canada was rented out to strangers and it was just a mailing
address, then you still just pay income tax to the US on the self
employment. (You do have to file a section 216(4) return to report the
rental income).
On the other hand, your GST return is different. If you were registered to
supply services in Canada and collected GST from your Canadian clients, that
was proper and you would file the GST and pay the collected GST to the CRA.
Because your expenses were all in the USA, you will have very little (if
any) input credits.
We, of course would be happy to look after these returns for you.
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CEN-TA Cross Border Services - Tax, Visas, Immigration
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