I am living and working in US on H1 visa from the last 4 yrs. Recently I got my Canadian PR and am planning to move to Canada(July 1). I will be working for the same US company remotely from Canada as an independant contractor. I was previously a permanent full time employee for the same company.
What would be the tax implications with regards to the Revenue Canada and IRS?
What paperwork my employer need to do if I am working as an independent contractor? Any forms(1099, 3042.. etc) he needs to fill and send to me or IRS?
My employer will not be withholding any taxes so if i earn 1000$ he will wire transfer 1000$ to my bank account and I'll have to take care of taxes in Canada end of the year.
What types of forms/docs I'll be needing to file taxes in Canada.
Do I need to send invoicing to him?
Also my employer is planning to wire transfer money to my bank account in Canada, will that cause any issues for taxation?
He said he can pay me in either USD or CAD - would it matter in which currency I am getting paid? Do i need to pay any US taxes(I am guessing no)
Thanks a lot in advance for your help!
Moving to Canada as PR, teleworking/telecommuting for US Co.
Moderator: Mark T Serbinski CA CPA
It doesn't matter whay currency you are paid in or where the money is deposited, either by you or your client (your employer is going to become your client).
For CRA, You will become taxable in canada from the day you mve back on world income.
For IRS You may choose to become non-resident of US on that day and file asa part-year resident (dual-status return) , but most find that it is simpler, and lower US tax, to file as if you leave on dec 31 of the yeae (this doesn't change your Cdn tax).
If you choose to do part-year, your contractor income will not be reported to IRS. If you chose to file full year, you will report the CDn income (as self-employed) and then take credit for the Cdn tax you paid. You will probably need to get a letter from CRA to indicate that you should not have to pay SE tax in US on your self-employment inocome, since you will be paying CPP in Canada (you may simply choose to pay both).
For CRA, You will become taxable in canada from the day you mve back on world income.
For IRS You may choose to become non-resident of US on that day and file asa part-year resident (dual-status return) , but most find that it is simpler, and lower US tax, to file as if you leave on dec 31 of the yeae (this doesn't change your Cdn tax).
If you choose to do part-year, your contractor income will not be reported to IRS. If you chose to file full year, you will report the CDn income (as self-employed) and then take credit for the Cdn tax you paid. You will probably need to get a letter from CRA to indicate that you should not have to pay SE tax in US on your self-employment inocome, since you will be paying CPP in Canada (you may simply choose to pay both).
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best