Canadian Living in US under TN Visa---Help with tax needed

peters · Post by **peters** » Wed Apr 01, 2009 4:32 am

I mean, because I wasn't self employed in the US.

nelsona · Post by **nelsona** » Wed Apr 01, 2009 4:46 am

Self employed is sef-employed.

You're using software I hope. It can handle that.

peters · Post by **peters** » Wed Apr 01, 2009 4:58 am

Well I am using a software (TT), but I guess I have to upgrade to SE version. I am also trying to look into real forms to understand what I am fillin in.

BTW is there any difference between TurboTax boxed vs. Online version or it's only a matter of personal preference?

nelsona · Post by **nelsona** » Wed Apr 01, 2009 5:01 am

The boxed and the non-free online one are the same.

peters · Post by **peters** » Wed Apr 01, 2009 2:38 pm

[quote="nelsona"]Self employed income, schedule SE. You hould not have to pay SE tax on t however, just income tax. And you may be able to eclude it using 2555 if that is the route you choose.[/quote]

Why can I opt out of SE tax?

nelsona · Post by **nelsona** » Wed Apr 01, 2009 2:42 pm

Because you live in canada and are paying CPP there. The agrreements between US and Canada are such that you should only pay Social security taxes in one country at a time: the country you live in at the time you earned the money.

As you know, when you do your Cdn departure return, you will be paying CPP on your SE income.

nelsona · Post by **nelsona** » Wed Apr 01, 2009 2:44 pm

LIVED in Canada

nelsona · Post by **nelsona** » Wed Apr 01, 2009 2:49 pm

Note that when I make reference to Schedule SE, I'm also implying that you've filled Schedule . Sched C is the real schedule for self-employed income to be reported. SE is the one that calculates the extra SE tax. You should not have tyo fill that, based on the totalization agreement. There are instructions on the SSA website on how to get a "Compliance letter" for foreign self-employeds to exempt SE tax.

It would be worth your while.

peters · Post by **peters** » Wed Apr 01, 2009 5:18 pm

Any idea how long it would take to get this compliance letter ? I would have to mail to Canada. Should I apply for an extension and pay taxes in the US later in the year when I get the letter ?

peters · Post by **peters** » Wed Apr 01, 2009 5:28 pm

Turbotax shows schedule C, but doesn't allow me to drop schedule SE.

nelsona · Post by **nelsona** » Wed Apr 01, 2009 8:23 pm

Sometimes you have to override software. You aren' e-filing this year anyways, so just override.

peters · Post by **peters** » Thu Apr 02, 2009 4:20 am

I checked my Canadian return, I have to pay about 300 in CPP which is better then the us 800 SE tax.
About the "compliance letter" though, do I need to send it with my tax report or just hold on to it until they ask me to produce it?

nelsona · Post by **nelsona** » Thu Apr 02, 2009 7:55 am

I would get it first.

peters · Post by **peters** » Thu Apr 02, 2009 9:40 am

In that case, do I file Form 4868 asking for extension until I receive the letter? I did overpaid and expecting return so it shouldn't be a problem I guess.

nelsona · Post by **nelsona** » Thu Apr 02, 2009 11:16 am

Sure, why not. technically you only have to send request for extension if you owe money (and you should pay wit hthe extension), but its a good practice to send.

Because SE tax is really SS money, it is best not to submit the SE schedule and then try to retract it, as they could argue that they've already credited your SS account with the contribution.