15% Canadian withholding tax on US resident working in .


I worked in Canada for less than 183 days and had a 15% withholding tax on my income even though I was paid from the US.  I work in the film industry as a freelance accountant.  Do I need to file a Canadian tax return and how can I recoup the 15% tax I paid in Canada?
 
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david ingram replies:

You are taxable in Canada and even though you may have heard abou8t an Article XIV or Article XV exemption under the US / Canada Income Tax Convention (Treaty), the exemptions do NOT apply to artists or athletes or anyone else involved in entertainment. 

You must file a Canadian T1 Income Tax Return and report the money earned in Canada (even if paid from France, Germany, Australia or the US or anywhere else).  You will pro-rate your exemption amounts on schedule 1 based upon the number of days you were in Canada.

When finished, you may have a refund but it is also more likely you will owe a little more, especially if you earned over $30,000.

You will then report the income 'again' on your US 1040 (and state return if in one of the 43 US states with a tax return).  You will claim credit for the tax paid to Canada on US form 1116 or use it as an itemized deduction on schedule A if you wish but it is usually always more beneficial to use form 1116 which you can find at www.irs.gov.

Many actors, etc, in your position ignore Canad and hope it will go away.  However, I am dealing with an actor right now where the CRA (Canadian IRS) has billed him over $180,000 for his income back to 1997.

Do it right and if you need help, we can look after it for you.

David Ingram wrote:
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Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to 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. 
 
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