American in Canada - Self Employed

[warmweather]

This is a great forum so I wanted to share what I have learned in the past few days. As a dual american and canadian citizen, living in Canada, you have to file US income taxes.

If you are self employed in Canada, and paying Canadian taxes, there can be a headache involved because you obliged to pay US social security taxes on Self Employment Income.

But there is a tax treaty that can help you out, so you dont pay double taxes. But you do need to get a certificate that shows you have paid into CPP

Here is what to do: On your 1040, enter "exempt see attached statement" on line 56

Then you will need to go to the CRA website and download this document
http://www.cra-arc.gc.ca/E/pbg/tf/cpt56/cpt56-07b.pdf

and wait 2-3 weeks for someone there to fill it in. Fax it back to 613-954-3398 or call 1-877-598-2408 for any questions

Hope that helps someone in a similar situation

[nelsona]

Known issue.
But, thanks for the reminder, and the details.

This comes up because, although the SE income is excludable by FEIE, that doesn't take care of Fica (SE tax).

Just to be precise, It's the Social Security Totalization agreement, and not the tax treaty, that spells out cross-border compliance.