Hello,
I've been in the US since 2000, on TNs and H1Bs. Through a couple of legal screw ups my GC never completed so when I got unexpectantly laid off in July I've had to return to Canada. (My house I own in the US is still yet to sell but that is a whole different discussion).
I've gotten a hit from my professional network that is looking like it will lead to some contract work for an old client. I'm looking to subcontract through my US collegues consulting company to the ultimate client.
I know I can get a TN with a 1099 which is the route I'm looking to pursue as I'm no longer at all interested in immigrating to the US.
My question is what is the best way for me to set this all up so I don't get murdered in taxes.
My thought is to set up a consulting company of my own in Canada (just a sole proprietership) but I'm a little unsure of how it will all work.
I THINK that I can get a TN via my friends company, then file my US taxes as a non-resident. I believe that would mean I would have to pay US tax on my 1099 earnings but would then get a foriegn tax credit when I do my Canadian taxes. Will I have to pay Social security or medicare taxes in the US?
The majority of the work will be done onsite in the US and I'm likely to be commuting to seattle from vancouver mon- friday. (Is this going to make me a US resident for tax purposes regardless?)
Any thoughts on the best way to do this?
Moving back to Canada , looking to do 1099 for US company
Moderator: Mark T Serbinski CA CPA
If you keep a Cdn residence, you will always be a Cdn tax resident, unless you have overwhelming ties in US.
You don;t seem to want to give up that, so you will pay Can/BC tax.
If you spend 183 days in any 365 day period, the 1099 income becomes taxable in US as well, so you could carefull count ypur days at all times and avoid this. But this will not reduce your overall tax
You don;t seem to want to give up that, so you will pay Can/BC tax.
If you spend 183 days in any 365 day period, the 1099 income becomes taxable in US as well, so you could carefull count ypur days at all times and avoid this. But this will not reduce your overall tax
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
[quote="nelsona"]If you keep a Cdn residence, you will always be a Cdn tax resident, unless you have overwhelming ties in US.
You don;t seem to want to give up that, so you will pay Can/BC tax.
If you spend 183 days in any 365 day period, the 1099 income becomes taxable in US as well, so you could carefull count ypur days at all times and avoid this. But this will not reduce your overall tax[/quote]
I'm not really trying to avoid paying Cdn/BC tax I'm just trying to avoid getting double taxed or having to pay into both SS/FICA and CCP. At this point I'd actually rather just establish my Canadian residency and pay my taxes north of the line. I'm just trying to figure out how it would be best to structure things to minimize my tax burden.
IE do I set up a sole proprietorship (me consulting) and have my 1099 payments made to that or should I incorporate (me consulting inc)
You don;t seem to want to give up that, so you will pay Can/BC tax.
If you spend 183 days in any 365 day period, the 1099 income becomes taxable in US as well, so you could carefull count ypur days at all times and avoid this. But this will not reduce your overall tax[/quote]
I'm not really trying to avoid paying Cdn/BC tax I'm just trying to avoid getting double taxed or having to pay into both SS/FICA and CCP. At this point I'd actually rather just establish my Canadian residency and pay my taxes north of the line. I'm just trying to figure out how it would be best to structure things to minimize my tax burden.
IE do I set up a sole proprietorship (me consulting) and have my 1099 payments made to that or should I incorporate (me consulting inc)
It doesn't matter.
You would only pay CPP/EI if you live in Canada. You never pay both sides of FICA and CPP.
Be warned that SE tax in US is prooably more than your income tax, so keeping your home in Canada is probably best.
You would only pay CPP/EI if you live in Canada. You never pay both sides of FICA and CPP.
Be warned that SE tax in US is prooably more than your income tax, so keeping your home in Canada is probably best.
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
[quote="Grabba"][quote="nelsona"]
If you spend 183 days in any 365 day period, the 1099 income becomes taxable in US as well, so you could carefull count ypur days at all times and avoid this.)[/quote]
So a follow up question to this. I'm sure I'm boned on this for 2012 since I was W2 through the beginning of June.
But for 2013, how exactly are the 183 days counted? Is it just work days? Normally we spend our weekends at our US property, do these vacation/weekend days count towards the 183?
What about split days?
For example if I start a monday in Canada then commute to the US to work does the monday count against the 183? And on the end of the week, if I start the friday in the US but then return to Canada friday afternoon does that day count towards the 183?
If you spend 183 days in any 365 day period, the 1099 income becomes taxable in US as well, so you could carefull count ypur days at all times and avoid this.)[/quote]
So a follow up question to this. I'm sure I'm boned on this for 2012 since I was W2 through the beginning of June.
But for 2013, how exactly are the 183 days counted? Is it just work days? Normally we spend our weekends at our US property, do these vacation/weekend days count towards the 183?
What about split days?
For example if I start a monday in Canada then commute to the US to work does the monday count against the 183? And on the end of the week, if I start the friday in the US but then return to Canada friday afternoon does that day count towards the 183?