Would love any opinions on whether I Can / Should I keep my US S Corporation for my income, whether I should discontinue it and/or incorporate in Canada.
I'm a US citizen, run my own S Corporation from 2005-to present. Moved to Canada last year with Canadian wife, and I'm now a Permanent residence, though we may return to US sometime 6 months to 3 years from now, hard to tell.
I make all my income through my US-based S Corporation. All clients and money are paid in US funds from US clients, though I don't have to really travel there.
Is it OK / legal / Advisable for me to just keep my US S corp running, receive all the income I make through it, and just report it on my Canadian taxes first ? Is this OK by the USG and the Canadian Government?
At first glance, it makes the most sense for me to keep my US S Corp. 1) cleaner if we move back 2) it makes it easy (as a book publisher) to provide this tax number to all the distributors/eTailors we use to pubish books. Any disadvantages?
Do I have to remove the Canadian (now non US-resident) from the S Corp officer list? Can we send her publishing/speaking income through the S corp still? Should we?
US Cit with S Corp now a PR in Canada? Keep S Corp?
Moderator: Mark T Serbinski CA CPA
S corps as you know flow the income from the corp directly to the shareholder who picks up the income on their personal 1040.
Only US citizens or US residents can be shareholders and ALL must be either of these 2 criteria. So an CND who is a shareholder will disqualify the corps existence so yes non residents must be removed as shareholders and officers.
In Canada you report the income as business income as if it were from a partnership but first you report it in your 1040 and then any tax you paid on this you claim it as a tax credit on your T1.
Only US citizens or US residents can be shareholders and ALL must be either of these 2 criteria. So an CND who is a shareholder will disqualify the corps existence so yes non residents must be removed as shareholders and officers.
In Canada you report the income as business income as if it were from a partnership but first you report it in your 1040 and then any tax you paid on this you claim it as a tax credit on your T1.
JG