Source of Income through small business

penjoy777 · Post by **penjoy777** » Wed Jun 12, 2013 10:02 am

First of all, I was not sure if this question belongs to the tax forum or the immigration one. However, since it was related more to the income source, I planned to post it here -
I am currently working in US (Canadian citizen) with a construction company (based in US). Now, I understand that I can open a small business (XYZ) for which either I can have my wife or I running it on the EAD status on a part time basis. (Please correct me if I am wrong)
I plan to get most of the work (drafting) from a Canadian company under this company (XYZ)
How do I go about on the taxes, since my source of income will be from a Canadian company? At the end of the year does XYZ or I owe taxes in Canada? Or the taxes are just to be paid in UStates.

Thanks

nelsona · Post by **nelsona** » Wed Jun 12, 2013 10:55 am

If you have an EAD (or later a GC), you can do what you want, immigratiion-wise.

You will basicaly be self-employed. So you will pay US tax on all this income. There should be no Cdn tax UNLESS you spend an inordinate amount of time in canada (more than 1/2 your time for a period of a year or more).

Now, the Cdn fimr may withhold income tax because you are non-resident, but you would recoup all of this by filing a year-end return.

Others may weigh-in on a corporate strcture you might prefer (or even need) and how this would impact taxes.

penjoy777 · Post by **penjoy777** » Wed Jun 12, 2013 6:10 pm

Thanks Nelsona. So the income I generate with extra work will be income in addition to my income through employment. Somehow I always thought that in addition to the income from work, with my current status I am not legally allowed to generate income. And that I am restricted to work/duties related to what original labor application was filed.
Can I open a LLC and just get work under it. At the end of the year just file taxes as a company rather than including it in the personal return.
Would that be cleaner than the first option?
As always thanks for your response

nelsona · Post by **nelsona** » Thu Jun 13, 2013 12:39 am

You said you had an EAD. That implies that you do not have a specific non-immigrant status that requires a sponsor. If this is not the case, then how do you have an EAD?

Someone else will have to answer the LLC question.

JGCA · Post by **JGCA** » Sun Jun 16, 2013 10:57 am

For income to be taxed in a corp vs taxed in your hands you can either get a c corp or as you said a single member LLC which you would own, the reason why you require a single member LLC is because by default the LLC income is considered a Hybrid entity that is the income will flow through to you as if you earned it personally ( Which is not what you want ) but the IRS allows all the members to elect by checking the box on the return to treat the LLC as a corp. Of couse no matter what you select a c corp or an LLC ( with box checked off) any distributions to you will be considered as dividends so you have to leave the money in the company, this may not be possible if you need the money to live off.

emilycao · Post by **emilycao** » Mon Jun 17, 2013 10:53 pm

I think game is a good way to explore small business and I want to have a try.
You know I am a game lover to swtor, when I need cheap swtor credits, I go to swtorcredits.upitems.com.
My question here is, can I have my own small business through swtor?
I would be so happy to hear any of your ideas.
Thanks so much!