Hi, here are some of the facts:
-I am a Dual US/Canadian Citizen
-I work for a Canadian company, pay Canadian income taxes. I work via my computer in Texas, just like I would if I was at my desk in Canada.
-I live in the US (at least I am in the US 80% of the year, heading back to Canada once a quarter)
-I am married to a US Citizen who has no ties to Canada, and has US Income
How should my taxes be handled?
-should I still be paying Canadian income taxes on my Canadian earnings? (yes, it's a Canadian company, paid in Canadian funds, deposited into a Canadian bank account) However I am doing the work from my desktop in Texas.
-where should I still file taxes? in Canada? in the US? both?
Is the only way to figure this out to fill out a "determination of residency status" form with the Canada Revenue Agency?
Help! this is so confusing even tax professionals here are having trouble with it...
Working for Canadian company from the US
Moderator: Mark T Serbinski CA CPA
additional facts
Additional facts:
-when I came to the US I did not intend to stay, or at least I did not know what would happen. Then my job said they would let me work via computer from the US so now I only go back about 40 days a year. It has now been about a year, and I filed my last tax return in Canada as a Canadian resident not taking into account any of the US stuff
-my wife in the US files quarterly returns and right now I am being included in that US tax return filing and the tax prepares are trying to figure out how to handle it. They have a copy of my pay stub.
How should this be done? Should I not file in Canada, should I fine in Canada, and then use those tax payments to offset any taxes due in the US once I file here with my wife? huughh
-when I came to the US I did not intend to stay, or at least I did not know what would happen. Then my job said they would let me work via computer from the US so now I only go back about 40 days a year. It has now been about a year, and I filed my last tax return in Canada as a Canadian resident not taking into account any of the US stuff
-my wife in the US files quarterly returns and right now I am being included in that US tax return filing and the tax prepares are trying to figure out how to handle it. They have a copy of my pay stub.
How should this be done? Should I not file in Canada, should I fine in Canada, and then use those tax payments to offset any taxes due in the US once I file here with my wife? huughh
You should only be paying tax in US. The Cdn firm, if you are an employee, should be paying you thru a US payroll. If you are self-employed, they should simply be cutting you a check.
There is no determination to be made: you have no ties in Canada.
There is no determination to be made: you have no ties in Canada.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
what are the options if I continue to get paid through Canadian payroll? i.e.
-continue to withhold Canadian taxes, continue to file in Canada, file also in US and put the taxes already paid in Canada against those due in US
-continue to withhold Canadian taxes, but stop filing in Canada, only file in US
etc.
I'd assume the tax agreement between Canada/US allows for a person working for a Canadian company but living in the US 80% of the time to stil be paid in Canadian funds.
-continue to withhold Canadian taxes, continue to file in Canada, file also in US and put the taxes already paid in Canada against those due in US
-continue to withhold Canadian taxes, but stop filing in Canada, only file in US
etc.
I'd assume the tax agreement between Canada/US allows for a person working for a Canadian company but living in the US 80% of the time to stil be paid in Canadian funds.
Its not a question of residency. You live in US, and are thus to be paid as a US worker, including FICA and IRS withholding. Your employer also has to pay their portion of FICA.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
follow-up
Nelsona, are you sure that there is no way whatsoever that I can continue to be paid in Canadian funds?
For 2011: my employer is not going to change the agreement we have. I am a salaried employee paid in Canadian funds. What I am looking for is what options I have after that fact.
-could I still get paid in Canadian finds BUT NOT have taxes withheld and NOT file with the CRA and ONLY file with IRS?
-could I still get paid in Canadian funds and STILL have taxes withheld and Still file with the CRA and file with the IRS also, using my Canadian withheld taxes as credits against my US taxes due?
I understand there may be easier ways at doing this, such as going on a contract or getting paid on a US payroll, but those options are not available to me at this point. So rather than worrying about those points I really need an objective view on the other options (i.e. question #1 and #2 above, and any other option I have not thought of that does not alter my employment status and/or Canadian payroll status)
Again, please try to think outside of the box here. I do not want to push my company to get involved in the US tax system. I am their only telecommuter and really want to keep my job thus am trying to make this as easy as possible for them. I would really appreciate more than a quick response, if possible, based on what I "should" be doing, rather looking for what I "can" be doing.
Respectfully
For 2011: my employer is not going to change the agreement we have. I am a salaried employee paid in Canadian funds. What I am looking for is what options I have after that fact.
-could I still get paid in Canadian finds BUT NOT have taxes withheld and NOT file with the CRA and ONLY file with IRS?
-could I still get paid in Canadian funds and STILL have taxes withheld and Still file with the CRA and file with the IRS also, using my Canadian withheld taxes as credits against my US taxes due?
I understand there may be easier ways at doing this, such as going on a contract or getting paid on a US payroll, but those options are not available to me at this point. So rather than worrying about those points I really need an objective view on the other options (i.e. question #1 and #2 above, and any other option I have not thought of that does not alter my employment status and/or Canadian payroll status)
Again, please try to think outside of the box here. I do not want to push my company to get involved in the US tax system. I am their only telecommuter and really want to keep my job thus am trying to make this as easy as possible for them. I would really appreciate more than a quick response, if possible, based on what I "should" be doing, rather looking for what I "can" be doing.
Respectfully
Cdn FUNDS merely means Canadian dollars. You can be paid in whatever currency you and employer agrre on.
It is the payroll that must be in US.
The firm is acting illegally by not fulfilling their obligation to remit withholding and FICA to US govt.
It is the payroll that must be in US.
The firm is acting illegally by not fulfilling their obligation to remit withholding and FICA to US govt.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
payroll
OK, I see, I did not realize one can get paid in Canadian currency while being on a US payroll.
So how would that work. If i get paid on a US payroll, in Canadian currency, would I still have Canadian taxes withheld per paycheck? Or would I only have US taxes withheld because I'm on the US payroll.
So how would that work. If i get paid on a US payroll, in Canadian currency, would I still have Canadian taxes withheld per paycheck? Or would I only have US taxes withheld because I'm on the US payroll.
The company must remit to IRS in USD. Why would they bother paying you in a different currency, and have to track that other currency's exchange rate?
In any event, you need to start some serious discussions with your employer. I think we're done on this thread, no?
In any event, you need to start some serious discussions with your employer. I think we're done on this thread, no?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best