I am a citizen of canada and currently own a software consulting company that I have one canadian client that I do work for on a part-time basis. This work is all done at my own home and remotely connect to his company's server to do the work. I also have a full time job where I will be relocated on a temporary basis to the United States Branch and will be obtaining a TN Visa.
My question is if I can continue my software consulting company and bill my canadian client and file my income under Canada? And of course my US based employer income would be filed under the US. I'm assuming also that any income I generate in canada while i'm in the US would be reported as foreign income when filing for US Taxes???
Business in canada with TN Visa in the US
Moderator: Mark T Serbinski CA CPA
You must first determine your tax residency.
Since you will be working remotely, your company in canada is not creatinga tie in canada for you, so it will come down to your residential ties (house and spouse). If these are in US you are a US tax resident, since your job is there too.
Assuming this, then neither your TN income nor the consulting income (ie the you take from your company) will be taxable in canada. I don't know what structure you use for your company, but if you are merely self-employed rather than incorporated, then you will have no Cdn tax issues at all. everything will be reported in US. The Cdn client may have to withhold some taxes for canada, but you would get these back when filing your non-residnt return.
if you are still going to maintain a Cdn home (ie. live out of temp housing in US) then only your TN wages will be taxable in US. In canada all your income including the TN wages will be taxable. any US tax you pay on your TN wages can then be used as a credit on your Cdn return.
Since you will be working remotely, your company in canada is not creatinga tie in canada for you, so it will come down to your residential ties (house and spouse). If these are in US you are a US tax resident, since your job is there too.
Assuming this, then neither your TN income nor the consulting income (ie the you take from your company) will be taxable in canada. I don't know what structure you use for your company, but if you are merely self-employed rather than incorporated, then you will have no Cdn tax issues at all. everything will be reported in US. The Cdn client may have to withhold some taxes for canada, but you would get these back when filing your non-residnt return.
if you are still going to maintain a Cdn home (ie. live out of temp housing in US) then only your TN wages will be taxable in US. In canada all your income including the TN wages will be taxable. any US tax you pay on your TN wages can then be used as a credit on your Cdn return.
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