Outside projects other than Employment (Canadian in US)

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penjoy777
Posts: 34
Joined: Mon Mar 09, 2009 7:27 pm

Outside projects other than Employment (Canadian in US)

Post by penjoy777 »

I am a Canadian citizen working on H1 visa in US. My family and I have cut all my ties with Canada since 2008 (departure return filed). I have been offered a project (fixed price) from a small company in Canada. Based on the current market trend, it seems I might be able to get more projects to work (after hours) beside my current employment from Canada as well as US.
My question is –
1)Can I work or take this/these project/s legally? If so, on what basis? Do I need a visa to take this work?
2)Can I open a small business (sole proprietorship) company based in Canada and then bill my clients?
3) If I can, how does the taxation work?
4)As far as taxation goes, how will this work if 1) and 2) is possible. Do I pay taxes in Canada (company based in Canada) or US?
These are a few basic questions, I have for now! Please advise?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

1) As long as the work is either performed in canad, or if performed in US, it cannot be for any US clients.
2) You can set up what you want. Its where you work that matters.
3/4) If you set up a companmy in canada, you will definitely pay tax in Canada. Otherwise, you will only pay tax in canada if you spens a lot of time there.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
penjoy777
Posts: 34
Joined: Mon Mar 09, 2009 7:27 pm

Post by penjoy777 »

Thanks for the response! However, based on your answers, I have further questions -
1) The client is not US, but the work will be performed from US since I work full time here on a H1. As indicated earlier this will be as if I am doing freelance work. So it seems that I can work and raise extra income here in US as long as the company is in Canada. That is good news!
2) As for setting up my own small business, I believe, I have no choice but to set it up in Canada! Correct? Can I register a small business here in US if I am on H1 visa?
3/4) So for the taxes in Canada, I would be paying only the taxes on the income I generate from this extra work and not from my employment.
And say if I can register a small business here in US, then it seems that I will have to pay no taxes in Canada!!!

Thanks
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

1. as long as the client is in canada, and has no US affilaitions. Where the company (yours or theirs) is located doesn't matter.
2. You don't need to register anything if you are self-employed. But you can resgister a business on H1. You simply cannot do any unauthorized work for any business.
3/4) that is what I said.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
penjoy777
Posts: 34
Joined: Mon Mar 09, 2009 7:27 pm

Post by penjoy777 »

1. The company is in Canada and has no US affiliations, so it seems I am ok
2. I am in US on H1 visa. The reason I want to register for a sole proprietorship is to not get taxed on top of my personal income (employment). When you say I can register a business on H1; does it mean in the US? If so, then can I run that business and pick up projects from the Canadian company? Is it legit? As i thought being on H1, I am not authorized to do any other work.
3/4) that is what I said.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You will be taxed as self-employed income on top of your wages.
It doesn't matter where the business is registered.
You cannot do any work in US that would require authorization. I answered your question as to what would constitute work not requiring work authorization: . as long as the client is in canada, and has no US affilaitions. Where the company (yours or theirs) is located doesn't matter.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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