US tax questions

sheri · Post by **sheri** » Fri Feb 04, 2011 3:17 pm

Hello,
I am Canadian working on a TN visa in the US. I live in Canada but work some days in the US. The US clients pay my company (which I own and is incorporated in Canada), I get paid in Canadian funds and file all my taxes both personal and corporate in Canada. I have not received any W2 or 1099. All the US clients pay directly to my company. I have two bank accounts in the US which bear interest and I have recently purchased an investment property in Florida in 2010. I have two questions.

1. Does my company have to file US taxes?
2. Do I have to file US taxes for years prior to 2010? I have had two accounts in the US for a few years now but only recently purchased the rental property. I heard that non-residents do not need to file taxes for interest income.

nelsona · Post by **nelsona** » Fri Feb 04, 2011 5:14 pm

You should not file in US, since you are neither resident there, nor an wemployee of a US firm, not present sufficient amount of days (183 days per year) to make you taxable, nor is any tax being withheld from you.

nelsona · Post by **nelsona** » Fri Feb 04, 2011 5:16 pm

Your US rental income however will need to be reported to IRS and state (and canada of course) on a 1040.

nelsona · Post by **nelsona** » Fri Feb 04, 2011 5:23 pm

... that's a 1040NR for non-resident.

JGCA · Post by **JGCA** » Sat Feb 05, 2011 1:04 pm

Depending on the amounts involved it is correct you do not owe tax to the US but you may want to file a 1120F treaty based return to make sure that you are never requested to file a corp tax return in the US, there will be no tax owing its jaust a precaution to defend the filing position of not filing, but again it depends on the amount involved if you wish to take this into account.

On the Canadian side please note if you are a CCPC ( Canadian controoled private corp) and you are filing the corp T2 tax return and are claiming the small business deduction tax rate depending on your province of residence say 16% for Ontario, the income you are earning from the US is NOT eligible for the low corp tax rate and will be subject t the high rate of tax 0f say 31% in Ontario because it was not earned in Canada.