Employee vs. Subcontractor working in Canada as a US citizen

bullrider · Post by **bullrider** » Sat Jan 22, 2011 2:47 pm

I am a US citizen. I have been presented with the opportunity to work in Alberta, Canada. The company said I could either come as a employee paying the applicable Canadian taxes or a subcontractor. The company said if I go contractor they would hold 15% out of my check and send me a T-4A form.
Now I don't know if I will be over the 183 days or not at this point.
I would ideally like to pay taxes in the US; but if there are tax deductions as a subcontractor (non-resident) in Canada; would it really matter?

nelsona · Post by **nelsona** » Sat Jan 22, 2011 4:58 pm

If you are en employee, you will definitely pay tax in canada.
If you are contractor, you might avoid Cdn tax, and even if you do end up being taxable, self-employed would likely be better for expense purposes.

bullrider · Post by **bullrider** » Sat Jan 22, 2011 10:11 pm

Well, that is better news then the 183 day rule.
I guess that is the route I will go and if I stay over 183 days, I will let my accountant deal with all the paper work for me to pay what I owe to Canada.
Is there any other hurdles that you may know of going the subcontractor route? I read other information on the web to not go LLC because Canada sees that as a corporation and I wouldn't have the same taxation benefits afforded to me like my wife's LLC business here in the states.
Thanks for you help. You seem very knowledgable in these matters.