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To whom it may concern.
I am a United States Citizen living in the U.S. A Quebec based Canadian company is considering hiring me to operate a satellite office of their company in the U.S. My questions are:
What are the legal requirements to start a U.S. office. Also, since I am a potential employee(as opposed to a independent
contractor) are they required to withhold Social Security, Federal and State taxes. If so, how do they go about doing this, since they have not had an U.S. citizen working for them in the past?
Thanks,
maji72 @aol.com
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david ingram replies:
Different requirements are possible in each state. However, in general, the Quebec company will have to get an EIN from the IRS. You can get the blank form at http://www.irs.gov/pub/irs-pdf/fss4.pdf
Page 2 of the form will tell you what lines to fill in to get the Employer Identification Number. Make sure to get a set of tax withholding tables - start at http://www.irs.gov/formspubs/page/0,,id=10800,00.html
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Then, depending upon the state, you will have to get the same things for the state.
I presume that if you are running the office, you will be able to read the tables and make the deductions yourself. The Quebec company can make these deductions and send them to the relative authorities every month from Quebec or they may want to hire a local accountant to do it for them,
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If they decide to operate as a Foreign company in the US, they will have to file a Federal 1120F tax return at the end of their fiscal year.
That would be the simplest to start with. If they decide to get bigger, they might incorporate a separate entity to operate in the US.
If you need more help on a fee basis, Sonja Clark CPA, CA LLB in our office could help you and the company in this endeavour, no matter what State you are in.
Our office is NOT set up to handle large companies with 25 or more employees but we specialize in one to fifteen person and individual Cross Border operations.
Sonja and I can be reached at the information below:
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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