I have dual citizenship between Canada/USA. After spending a number of years living in the USA I have now married and moved back to Canada. I am still working for a USA based Company and conduct all of my business as if I was still based out of the WA state office.
What are the tax implications for me? I believe, according to Canada, I would be considered a permanent resident since I am on the healthcare system and married to a Canadian, own a home, etc. I really don't want to have to pay income tax in both countries.... My thought is that since I'm working in the USA and don't earn any money in Canada I would pay US taxes only. However; everything I've read indicates that I must file Canadian taxes on foreign income if I reside in the country?
Dual Citizen (USA & Canada) Lives in Canada but works in
Moderator: Mark T Serbinski CA CPA
You are a Cdn resident for tax purposes, and thus need to report all world income to CRA (and continue to report world income to IRS because of citizenship).
This became true the moment you moved to canada.
The result should be that you pay all your taxes in canada and nothing to US.
However, the problem is that you cannot bepaid as an employee of the WA office, since you live AND work in canada. Your comapny must either set up a Cdn payroll, or they must make you a contractor. they are failing to correctly withhold Cdn tax, EI, and CPP for you, which can only lead to trouble for you. Even now, you see that you having a lot withheld for IRS, even though you owe them nothing, and nothing withheld for CRA, to which you will owe $1000's. And you are paying FICA taxes wghich you should not.
This income is NOT foreign income, it is earned in canada.
This became true the moment you moved to canada.
The result should be that you pay all your taxes in canada and nothing to US.
However, the problem is that you cannot bepaid as an employee of the WA office, since you live AND work in canada. Your comapny must either set up a Cdn payroll, or they must make you a contractor. they are failing to correctly withhold Cdn tax, EI, and CPP for you, which can only lead to trouble for you. Even now, you see that you having a lot withheld for IRS, even though you owe them nothing, and nothing withheld for CRA, to which you will owe $1000's. And you are paying FICA taxes wghich you should not.
This income is NOT foreign income, it is earned in canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thanks for the info but this is not what I wanted to hear. My office isn't going to change the way they pay me. As far as they're concerned I still live in the USA. This is why I kept a US address.
I read about the ability to be exempt from tax in Canada if your base office is in the USA? To be clear, this organization has NO ties to Canada nor do I work with any Canadian clients. All my work is done with clients in the USA regardless of whether it's in person or over the telephone. I don't see why it should matter where I'm physically located.
I read about the ability to be exempt from tax in Canada if your base office is in the USA? To be clear, this organization has NO ties to Canada nor do I work with any Canadian clients. All my work is done with clients in the USA regardless of whether it's in person or over the telephone. I don't see why it should matter where I'm physically located.
For anyones reference. Please see below:
You mentioned the Can/USA tax treaty – what is it and how does it help you with your taxes? Are the taxes more complicated? Do you have an accountant?
There is a little used tax article in the US/Canadian tax treaty (Article XXV, paragraph 4) that basically states that a married individual that is a resident in Canada and a non-resident in the US, with income taxable in the US, shall not be taxed greater than a US citizen would be taxed. So basically what this means is that I would file in the US as if I were a resident, which results in a lower tax rate and means I write off my mortgage interest, property taxes, etc. like a US resident would. This should (and did) reduce my taxes payable in the US but didn’t make a huge difference in my taxes payable in Canada (it just meant I was able to use more of the foreign tax credit, which CANNOT be carried forward to following years). Using the tax treaty definitely makes the taxes more complicated but I managed (with some help from a great message board http://forums.serbinski.com/index.php) to do our taxes myself. I’m not sure there are many accountants in my area that have used this treaty much and though I managed to save about $2000US by doing our taxes this way, much, if not all of that would have been eaten up by the accountant. For people with a much larger mortgage, and higher interest rate, this could make a bigger difference in taxes paid (both in the US and Canada) so it is definitely something worth looking into.
You mentioned the Can/USA tax treaty – what is it and how does it help you with your taxes? Are the taxes more complicated? Do you have an accountant?
There is a little used tax article in the US/Canadian tax treaty (Article XXV, paragraph 4) that basically states that a married individual that is a resident in Canada and a non-resident in the US, with income taxable in the US, shall not be taxed greater than a US citizen would be taxed. So basically what this means is that I would file in the US as if I were a resident, which results in a lower tax rate and means I write off my mortgage interest, property taxes, etc. like a US resident would. This should (and did) reduce my taxes payable in the US but didn’t make a huge difference in my taxes payable in Canada (it just meant I was able to use more of the foreign tax credit, which CANNOT be carried forward to following years). Using the tax treaty definitely makes the taxes more complicated but I managed (with some help from a great message board http://forums.serbinski.com/index.php) to do our taxes myself. I’m not sure there are many accountants in my area that have used this treaty much and though I managed to save about $2000US by doing our taxes this way, much, if not all of that would have been eaten up by the accountant. For people with a much larger mortgage, and higher interest rate, this could make a bigger difference in taxes paid (both in the US and Canada) so it is definitely something worth looking into.
canada taxes based on residncy. You live in canada.Your problem is not US taxation issue, it is a jurisdictional one. Your US tax will not be that much, compared to BC tax.
canada will not accept that this income is earned in US.
i'm the one who promoted non-discrim returns in the first place.
canada will not accept that this income is earned in US.
i'm the one who promoted non-discrim returns in the first place.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing