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Right. A visitor visa accompanying my wife whose on a student visa; converting to a 1099, paying Canadian tax in advance of PR using a temporary tax id provided by the international division of CRA. Actually, what's likely to happen - based on some feedback from Immigration Canada - is that we'll li...

As it turns out, Immigration Canada already answered the question regarding my telecommuting while accompanying my wife (who entered Canada on a student visa). All I needed to do was look at my visa. I had not noticed prior to posting earlier, but my visa contains an accurate description of my circu...

All good information. Thanks again for all your help.

Thanks for your follow-up. Regarding my status as a contractor, I may be required to go back have my visa updated to allow me to work - which I can legally do under my wife's student visa. Recall she was in the reverse situation 5 years back. Bottom line is I may have to follow-up with Immigration C...

Thanks for your response. Information below is not germane to the tax issues and really should be posted elsewhere, but I do not want others reading this to assume that they cannot do precisely what we've done in terms of entering Canada on a student visa and visitor visa respectively and continuing...

At the border we figured we were in good standing because we spoke with staff who where responsible for issuing our visas. Staff had access to our file with Immigration Canada had and could see where we were at in the immigration process. My hope is the staff issuing visas was sufficiently knowledge...

Thanks much for your reply. I wanted to follow-up on one point you made, regarding our being ineligible to work in Canada without status Canada Customs (i.e. boarder crossing) understood we were entering the country my wife's student Visa. They indicated I'd be able to continue to work for my U.S.-b...

Many thanks to the principal contributors and others who participate in this forum. What follows below is a somewhat generic case where an American couple arrives in Canada but continues to work with US-based employers. This subject has been covered at length in various postings. "Next Steps" (below) are based on our understanding of these previous postings. Clarifications or corrections to "Next Steps" are much appreciated.

Profile:
1. Married couple (U.S. citizens) submitted application for permanent residency on September 2006. Physicals conducted June 2007.
2. Couple entered Nova Scotia on July 1st with 2 children. Wife on student visa. Husband on visitor visa.
3. Couple continues to work for firms based in U.S. (i.e. no Canadian presence). Husband and wife worked out of home office in U.S.
4. Household income $150K with $110K/$40K split.
5. The following holds true for both husband and wife since arriving in Canada:

...a. Paid as employees (i.e. not contractors).
...b. Contributing to Roth IRA.
...c. Contributing to 401K
...d. Company matching 401K

Next Steps:

1. Immediately change employment status from ‘employee’ to ‘contractor.’ After the switch over, company matches to 401K and profit sharing will appear on 1099 as taxable income. (We recognize this should have been done prior to departing the U.S.)

Q1-a. Is it possible to still contribute the maximum amount to our 401K this year?
Q1-b. If it is possible, is it a matter of writing a check or is it simply not possible to contribute the full $15K because we were only half-year residents?

2. Apply for Individual Tax Numbers from CRA (i.e. not eligible for SIN until PR is granted.)

Q2-a. Given that we’ll be working as contractors, we'd assume that quarterly payments to CPA will be required. Correct/Incorrect?

3. File return with CPA for all income earned since arriving in Canada on July 1st. (i.e. wages, interest, capital gains). A byproduct of the return is a foreign tax credit used when filing with the IRS.

4. Do ONE of the following: file 1040 (full year) and use a foreign tax credit to offset taxes owed to IRS or file a 1040NR.

Q4-a. We're not clear on the implications of filing a 1040 vs a 1040R. Generally speaking, when would you file a 1040 vs a 1040R?

Note: The fact we delayed in cutting over from a W-2 to a 1099 means that we’ve overpaid the IRS. We’d expect to get it back only after filing (and claiming the all important foreign tax credit.)

5. Stop Roth IRA contributions. Canadian residents are not technically permitted to trade a US-based firm irrespective of citizenship or visa status. (We deal with Vanguard.)

Q5-a. Prior to the most recent amendment to tax treaty, Roth IRAs were considered taxable in Canada so there would be no benefit to making contributions. Recent forum contributions indicate the Roth may be treated identically on both sides of the border. Is our read correct/incorrect?

6. Begin contributing to an RRSP at the earliest possible point in time. We understand that we cannot contribute to an RRSP this first year.

Q6-a. In the likelihood that we don’t receive PR until the next calendar year, would we still be able to contribute to an RRSP?

7. Rollover 401K (established with current firms) to IRAs in our existing Vanguard portfolio.

Q7-a. Based on Forum information, this is not possible because we’re not permitted to do anything but sell once we reside in Canada. Have we got the correct understanding?
b. If we cannot “legitimatelyâ€￾ roll over to an IRA, and there’s no avenue for mapping it to a RRSP equivalent, then it would appear that the money needs to remain in the current account until we retire in 2+ decades. Correct/Incorrect?

8. Follow up with a tax professional (e.g. Mark).