Living in the US on a TN visa, and operating a web based company in Canada - international non-resident cross border income tax

My_question_is: Applicable to both US and Canada
Subject:        Living in the US on a TN visa, and operating a web based
company in Canada
Expert:         taxman at centa.com
Date:           Thursday January 04, 2007
Time:           05:48 PM -0500
QUESTION:
Is it possible to run a web based company ffrom my home in the USA, while
woring here on a TN visa, but claim that the business is Canadian based and
pay Canadian taxes on it?
-----------------------
david ingram replies:
You can call a toad a frog fifty times but it is still a toad.
If you are living in the USA, you are taxable on your world income.
If your web based business sells to Canadians only, it is legal.  If you are
selling to Americans from a business based in the US because its mind (your
mind) and control is in the US, it is taxable in the USA.  AND , AMD , AND
it is illegal for you to run that business from the US if it sells to
Americans.
If the web based business has Canadian clients only but is based upon your
mind and control in the US and has no fixed base in Canada, it is NOT
taxable in Canada.
So if it is selling to Canadians only and you are doing everything in the
USA, you will just report it on Schedule C of your US 1040.
You might want to spend some money and do a phone consultation with me.
Phone consultations are $400 for 15 minutes to 50 minutes (professional
hour). Please note that GST is added if product remains in Canada or a phone
consultation is in Canada.
This is not intended to be definitive but in general I am quoting $800 to
$2,400 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
$2,400 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.
--------------------------------------------------------
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. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance, preparation, or
consultation  in connection with personal or business affairs such as at
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