Hi and thank you in advance! I will have an opportunity to work as an engineering manager at an US company. I am planning to keep my home in Canada and my wife will be coming and going. That means I will have to file a return in Canada taking in account taxes paid in the US. My question is, the total amount of taxes I will have to pay in that way will be similar to what I pay in Canada (from a Canadian job with same salary) or higher? The second question is whether declaring that income in Canada as income of an Ontario corporation (I am incorporated) gives any tax advantage (wife does not have income) making the total tax load (US and Canada) slightly lower?
Thanks
Canadian working in US under TN1 maintaining ties to Canada.
Moderator: Mark T Serbinski CA CPA
You need to be careful here. If you are living and working in the US with any degree of permanence, and your wife is coming to visit you instead of you coming back to visit her in Canada; you may be considered a deemed non-resident of Canada via treaty and need to file a departure return and abide by all of CRA's departure rules.
This would include your corporation losing it's CCPC status, you being deemed to sell the shares of the corporation on departure (which means you would have to pay a firm to value the company), being deemed to sell any other non-registered investments, etc.
Having a home and even a spouse in Canada is not enough to maintain your residency status. You need to come back to visit your spouse fairly regularly.
Assuming you take the necessary steps to maintain your residency status, US tax rates are generally lower than Canadian rates, so the TOTAL amount of taxes you pay will basically be the same as if you were working in Canada. The US tax will likely be lower than what you would pay working here, but you still have to make up the difference on the Canadian side.
Hope this helps.
This would include your corporation losing it's CCPC status, you being deemed to sell the shares of the corporation on departure (which means you would have to pay a firm to value the company), being deemed to sell any other non-registered investments, etc.
Having a home and even a spouse in Canada is not enough to maintain your residency status. You need to come back to visit your spouse fairly regularly.
Assuming you take the necessary steps to maintain your residency status, US tax rates are generally lower than Canadian rates, so the TOTAL amount of taxes you pay will basically be the same as if you were working in Canada. The US tax will likely be lower than what you would pay working here, but you still have to make up the difference on the Canadian side.
Hope this helps.