Corp to Corp on TN visa

atyagi · Post by **atyagi** » Thu May 25, 2006 1:06 pm

Hi Nelson,
I would be in US on a TN visa under computer systems analyst title soon, I plan to live in US for 2-3 years, I would occasionally visit canada every few months during this time.

Currently I have a canadian corp that I use to bill my clients in canada.

I would like to use my same Canadian corporation to bill my clients in US as well.

Questions:
1) Do I need to get the US EIN number for this canadian corp or just Ontario business no would be sufficient to provide for the US companies to give cheques.

2) For opening the businnes account in US for my canadain corp, do I need an EIN or would ontario business no would do.

3) How would Canada/US tax affect me, do I need to fill both the taxes or just canadaian taxes.

Any help is appreciated.

Thanks
Abhishek

nelsona · Post by **nelsona** » Thu May 25, 2006 1:35 pm

If you are living in US, you should probably not continue to use your Cdn corp, as this is creating an unnecessary reporting burden in Canada.

set up a US corp (if you really think you need a corp -- you do not need one to work as a TN in a 1099 basis), and pay all your taxes in US.

atyagi · Post by **atyagi** » Thu May 25, 2006 1:49 pm

Hi Nelson,

Thank for your reply

1) The reason behind using the canadian corp is to minimize the taxes and claim as much deductions as possible i.e travel expenses, rental expenses, meals etc and also because we would still be contributing for our kids RESP (No tax deductions there) and will also be getting child tax benifits in canada.

2) On the other hand on 1099 can we claim all the expenses. Do we need to set up a company for this and what should be the entity type?

3) If we set up a US corp what should be the entity type. Again we want to minimize taxes and claim deductions. Would delaware company be Ok. Can we open a US account in bank of america or other national bank.
Would setting up using this link be ok, www.myUScompany.com

Thanks you soo much for all your help.

Regards
Abhishek

nelsona · Post by **nelsona** » Thu May 25, 2006 3:10 pm

The fact that you live in US will make you a non-resident of canada. Your corp shell in canada will not make you resident of canada, and continuing to pay taxes in canada just for the marginal 'privilege' contributing to an RESP is not a viable reason to do this.

as to what form of US company you need in US, that will depend more on professional liability than on taxes. Even a self-employed can claim all the expenses you mention.

talk to a US accountant.

nelsona · Post by **nelsona** » Thu May 25, 2006 3:18 pm

as to the website you mentionned, I doubt that it is for you.

You will be living in US under TN, and thus your non-TN activities will be limited, and you will have full access to any US resources on your own.
This scheme looks like it is for off-shore clients.

atyagi · Post by **atyagi** » Thu May 25, 2006 3:40 pm

Thanks once again Nelson,

So you are saying that i can open a US company and use it to bill my clients in US while living in US without affecting my TN status or raising any red flag to the immigration or IRS. But wouldn't that lead to self employment.

I understand that using the canadian corp does not make much sense here, so probably i am going to drop the idea.

For 1099, you are saying that i dont have to register the company and still can use thoses deductions right. Dont employers need some sort of EIN before they can issue a cheque even on 1099.

Thanks for the clarifying that that link is not for my senario.

Do Mark help in all the taxation issues, like setting up the company and filing taxes etc

nelsona · Post by **nelsona** » Thu May 25, 2006 4:31 pm

You will need a TN for each of your clients.

You will be able to get an SSN once you get your first TN; this is sufficient.

atyagi · Post by **atyagi** » Thu May 25, 2006 4:56 pm

Hi Nelson,

I understand that i need to get TN for every new client. Can you please clarify this,

So you are saying that i can open a US company and use it to bill my clients in US while living in US without affecting my TN status or raising any red flag to the immigration or IRS. But wouldn't that lead to self employment.

I will try to get in touch with Mark soon.

I appreciate all your help.

Regards
Abhishek

nelsona · Post by **nelsona** » Fri May 26, 2006 6:14 am

I thought I just did clarify:

You need to be sponsored by EACH of your US clients, this is self-employment, which is allowed on TN (that is what is meant by being paid on 1099), It is NOT self-sponsorship, which is not allowed.

atyagi · Post by **atyagi** » Fri May 26, 2006 12:52 pm

Thank you soo much Nelson. You did clarify lot of my doubts.

bhaskarc2000 · Post by **bhaskarc2000** » Thu Jul 12, 2012 8:00 pm

[quote="nelsona"]I thought I just did clarify:

You need to be sponsored by EACH of your US clients, this is self-employment, which is allowed on TN (that is what is meant by being paid on 1099), It is NOT [u]self-sponsorship[/u], which is not allowed.[/quote]

I am working on Corp to Corp Basis on TN1 and I have my Client Name on my I-94. My corporation is incorporated in Delaware. I could have used my Canadian Corporation but my client forced me to use a US corporation.

Now how to pay myself from my US corporation. Should I run a payroll in US through my US corporation. There lies the dilema:

Does US Immigration law allow me to run a IRS payroll through my
Delaware corporation even though myI-94 has my client name written on it ?
I went over your posting. It does not talk anything about running of
payroll for Corp to Corp TN1 basis.
Won't it create conflict between what IRS sees as employer (my Company) and what USCIS views as employer (my client) according to my I-94.

This is the contradiction that is bothering me in the Corp-to-Corp TN1.
Your clarification regarding running of payroll would be greatly appreciated.