US Citizen - Move to Canada - Work in USA

[tranquada]

My wife is a US citizen who works for a global company based in NJ. I am a dual citizen. We are considering moving back to Canada. My wife would like to continue to work in her NJ based job from our home in Canada. We are considering keeping a second home in NJ since we would both need to travel back a lot. Her company is interested in this arrangement, but would like to know how this would work. Her company does have operations in Canada, however, the job she wants is in their global headquarters, and not in the Canada branch. It may be very complicated from a budget standpoint to be paid from their Canadian operation, not to mention that her equivilent position in Canada is a much lower salary than in the global office.

I have a bunch of questions:
1) Can she stay on the US payroll, or would she need to be paid by the Canadian branch? Or would she need to switch to independent contractor status? If she has options, what works best?
2) If she does continue to be paid on a US payroll, do they deduct NJ taxes, or Ontario taxes? Will this create a problem in the US?
3) Does any of this matter if we have a second residence in the US? This second residence would not be our primary home, but could she take NJ withholding taxes during the year, and just make up the difference to CRA through quarterlies? Would the second residence help things, or make them more complicated?
4) Am I correct in assuming that the taxes in this situation as a whole are no higher than what any other Canadian resident would pay? (my understanding is the US taxes paid would be a credit against the Canadian ones)
5) Could we still contribute to IRAs and 401Ks in this situation, or are we stuck with RRSPs only?
6) Is there anything else we should be worrying about? (besides the obvious twisted logic of moving to Canada when the Canadian dollar is high)

Thanks for any initial guidance you can offer. We know we will need legal and tax help if go this path, but I am hoping to get some initial answers out of the way so we can decide if it is even worth the trouble.

[nelsona]

Since she would be working in Canada, she would have to be paid as a Cdn employee, not US. This shouldn't really be a big issue. OR She could become a contractor. The concern is not only income tax but payroll taxes.

The second residence doesn't matter for Cdn taxes. You may just be creating unnecessary NJ taxes.

It would be unwise to continue funding IRA/401(k0 at that point. In fact RRSPs are a better vehicle because (a) they are much mor eflexiblethan 401(k), and are more easilt withdrawn --with no penalty either.