Canadian in US on dependent visa working telephone to Canada

[worryfreeinvestor]

Here's a scenario on which I'd value input. A Canadian man resides/works in the U.S. on a TN1 or H1B or whatever. Wife has the appropriate dependent visa and cannot work in U.S. Wife is a consultant who sits in a home office in the U.S. and consults by telephone to Canadian clients in Canada. Canadian clients pay fees into wife's Canadian bank account (which is registered in her name as a non-resident).

I expect that this activity is legal under Canadian law, because a Canadian can surely always work in Canada, even if not residing in Canada.

However, is this legal under U.S. law? Or, is she "working" in the US even though the business is happening on the other end of the phone, in Canada?

If it's kosher, I figure she'd pay Canadian income taxes and claim a credit on husband's 1040, "married filling jointly."

Any suggestions? Or should I tell her to put down the phone and get out of the house before Homeland Security busts in and ships her to Guantanamo Bay?

[nelsona]

She is working in US, and needs US permission.

The fact that the money is sent to a Cdn bank is, of course, meaningless. She would not be liable for Cdn tax: she isn't working in Canada.

She *might* ba allowed under the reasoning that her job is not involve in any way with US (ie. the firm she is working thru has no US presence) and that her clients are not benefitting from her being in US, but this would be a legal issue to ask a US immig lawyer.

In your scenario, a US citizen would have absolutely no problem doing what she plans, because a US citizen, not a Cdn citizen, is quite free to work from an office in US, and call whomever they wish worldwide.

She would be taxable in US regardless of whether she files jointly with you or not:she is a US tax resident even without you.

[worryfreeinvestor]

Thanks. Guantanamo Bay it is, I guess.