If this lady (see older question below) doesn't have any tax liability to the US then why does my wife have to file with the IRS (She's American) when she hasn't earned a penny in the US in the last 26 years? We live in BC and have never earned income in the US but you have stated in the past that US citizens must file their Canadian income with the IRS and possibly have to pay the IRS taxes on their Canadian income. What gives? XXXX Abbotsford ======================== david ingram replies: Your wife is a US citizen - US citizens have to fill out a US tax return no matter where they live in the world. The first $80,000 is exempt but the tax return still has to be filed. After the $80,000 (US$) exemption, other income is subject or eligible for the Foreign Tax Credit. She would have to make over $110,000 US before there would be any US tax liability and that would be because of AMT (Alternative Minimum tax). Nothing has changed except the imposed penalties are larger for not filing. The penalties themselves have not changed, just the enforcement since Sept 11, 2001. ----- Original Message ----- From: centapede at lists.centa.com To: CENTAPEDE Sent: Wednesday, September 01, 2004 9:42 PM Subject: [Cen-tapede] Canadian citizen (living in Vancouver British Columbia Canada) working for US company - ask an International real estate mutual funds immigration income tax expert experts - David Ingram 's CENTA Services in North Vancouver BC Canada AM600 Radio QUESTION: Hello, I have exhausted all of my efforts in trying to find a straightforward answer to my (now) dilemna. I am a Canadian citizen living in British Columbia. I recently got offered a job by a US company (in the US) and they do not require me to re-locate. I am able to work from home and stay in Canada. I will be paid US dollars and will be considered a full-time employee of the company vs. a sub-contractor. Through my numerous previous research efforts, I have obtained the following information: - I only need to get an ITIN (US Tax identification number via form W-7) in order for the US company to withhold my taxes. - The US company also sent me forms W-4 and I-9 to complete. This should have been fairly straightforward. I fill out the forms, have US taxes withheld and claim them back next tax season with the IRS. However, the IRS now will not give out ITINs without a tax return being filed. There is now discussions of the US company requesting me to possibly obtain a TN work visa (but still reside in Canada) only for the purpose of being able to get a Social Security Number so that I can file US taxes. If I do this, will I not be taxed dually? Is there a much simpler solution to this problem? I have suggested to my US employer that they pay me (no taxes withheld) till year end, issue me a W-2 next year and I will pay all taxes due to the IRS myself and then apply for my ITIN at the same time. Is this a feasible solution? Many thanks for all your time and assistance! Susana ====================================== david ingram replies: NO NO NO NO NO! If you are working in Canada and living in Canada, there is absolutely NO US tax liability. Your ONLY income tax liability is to Canada. Your company has two choices. 1. The easiest is to pay you as a self-employed contractor. They will pay you a contract amount equal to what would be your salary PLUS their half of the Social Security and Medicare and any amounts that they would usually pay to your pension or 401 plan (K, B, etc.), and any other incentives that might exist. They would not issue you any IRS documentation other than maybe give you a statement at the end of the year stating that they had paid you "x" number of dollars. You would file your return next year as a self-employed person and pay both halves of CPP and your income tax. You could buy (and they could pay you extra for it) your own group medical cheaply by joinng the local chamber of Commerce or the Vancouver Board of Trade. OR 2. They could get a Canadian Employer's number from the CRA. You could look after your own payroll or we (or a 100 others) could do it for you. You would make deductions for EI (Employment Insurance), CPP (Canada Pension Plan) and Income tax. The company can join the local Chamber of Commerce or the Vancouver Board of Trade to buy you a Canadian Group benefits plan. You, we, or the company would then file a Canadian T-4 slip for you by Feb 28th, 2005 for the 2004 tax year. There is NO US tax liability for you if you are not physically present in the USA when performing your duties for the US company. Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. Old shows are archived at the site. This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate: multi jurisdictional cross and trans border expatriate gambling refunds for the United States, Canada Mexico Great Britain the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc. income tax wizard wizzard guru advisor advisors experts specialist specialists consultants taxmen taxman tax woman planner planning preparer of Alaska, Alabama, Arkansas, Arizona, California Denver Colorado, Connecticut, Delaware District of Columbia Miami Florida, Garland Georgia, Honolulu Hawaii, Idaho, Illinois, Indiana Des Moines Iowa Kansas Kentucky, Louisiana Bangor Maine Maryland Boston, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Paris, Rome, Sydney, Australia Hilton Pennsylvania, Rhode Island, Rockwall, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Houston Rockwall Garland Texas Taxman and Tax Guru and wizzard wizard - David Ingram's US/Canada Services US/Canada/Mexico Tax Immigration & working Visa Specialists US / Canada Real Estate Specialists 4466 Prospect Road (Personal residence by appointment only please) North Vancouver, BC, CANADA, V7N 3L7 Calls accepted from 10 AM to 10 PM 7 days a week Res (604) 980-3578 Cell (604) 657-8451 Bus (604) 980-0321 Fax (604) 980- 0325 davidingram at shaw.ca 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 & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If y ----------------------------------------------------------------- --------------- ----------------------------------------------------------------- List-Unsubscribe: <http://lists.centa.com/mailman/listinfo/centapede>, <mailto:centapede-request at lists.centa.com?subject=unsubscribe& gt; --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.747 / Virus Database: 499 - Release Date: 9/1/04 -------------- next part -------------- An HTML attachment was scrubbed... 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CEN-TA Cross Border Services - Tax, Visas, Immigration
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