Hi ,
I am a non resident (canadian) working in the US. I get my salary paid to my corporation in Canada. However ever since I started working in the US, I've opened bank accounts to and have gained some interests from my savings (I opened them mainly to establish credit and have US credit cards).
Recently I received 1099-INT and have questions on how I should proceed:
Please note: I have no employement income that's taxed in the US, we are just strictly talking taxable income from interests gained.
1) I am assuming I should be filing this as a non resident alien?
2) I have no experience filing taxes in the US. I was thinking of going to HR block. Any pros/cons?
3) Do I need to do this every year?
4)If anyone in my situation who had to file income tax in the US, I would to hear your thoughts.
non resident- should I file income tax in US?
Moderator: Mark T Serbinski CA CPA
1. US Non-residents are not subject to US taxation on their persoanl bank accounts.
2. Never take your cross-border taxes to HRB. From your post, it does not look like you need to file in US anywys. I guarantee they would botch all returns.
3. N/A.
4. I would only stress that the fact that you are working in the US, I assume as a contractor, *could* make you liable for US taxation, especially in the year 2010 and onward. The treaty clause that you have been using (independant services) is changed, and will take effect next year, whereby, even if you are a contractor (and the fact that you have a Cdn company is of little importannce) your DAYS in US will be the deciding factor. If you are in US more than 183 days in ANY 365 day period, you will become taxable in US on that income.
You may be taxable now. many people think that by merely setting up a Cdn comapnyt that they aren't taxable in US, even if they pay in canada. This is not necessarily true (and certainly won't be true in the near future). The fac tthat you have an SSN, would seem to indicate that you have more that 'visitor' status when you work in US, and thus you have a residence in US, albeit secondary to your Cdn one. As such you are borderline if not truly resident.
Just a caution.
2. Never take your cross-border taxes to HRB. From your post, it does not look like you need to file in US anywys. I guarantee they would botch all returns.
3. N/A.
4. I would only stress that the fact that you are working in the US, I assume as a contractor, *could* make you liable for US taxation, especially in the year 2010 and onward. The treaty clause that you have been using (independant services) is changed, and will take effect next year, whereby, even if you are a contractor (and the fact that you have a Cdn company is of little importannce) your DAYS in US will be the deciding factor. If you are in US more than 183 days in ANY 365 day period, you will become taxable in US on that income.
You may be taxable now. many people think that by merely setting up a Cdn comapnyt that they aren't taxable in US, even if they pay in canada. This is not necessarily true (and certainly won't be true in the near future). The fac tthat you have an SSN, would seem to indicate that you have more that 'visitor' status when you work in US, and thus you have a residence in US, albeit secondary to your Cdn one. As such you are borderline if not truly resident.
Just a caution.
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
Nelsona,
Thank you for replying to my posts right away- I really appreciate it!
Now to clarify a few things:
1) I used to work full time in the US for a very long time ago, hence how I obtained an SSN. With this I was able to open up bank accounts and establish credit going forward.
2) The taxable income is from the interests. Years ago I had inherrited some money (not much) which I had put in a US bank on a GIC type savings acct. Now the bank has sent me a 1099 form.
3) Yes, you are right. I work as an independent contractor in the US but live in Canada. As I had mentioned before my US employers would always paid my company in Canada.
Having said all that, does that change your initial answer in any ways? Given I made interests from Savngs acct, do I not need to pay uncle sam some $$? I just want to make sure I do the right thing so one day I don't get pulled at the border by tax cops :)
Thank you for replying to my posts right away- I really appreciate it!
Now to clarify a few things:
1) I used to work full time in the US for a very long time ago, hence how I obtained an SSN. With this I was able to open up bank accounts and establish credit going forward.
2) The taxable income is from the interests. Years ago I had inherrited some money (not much) which I had put in a US bank on a GIC type savings acct. Now the bank has sent me a 1099 form.
3) Yes, you are right. I work as an independent contractor in the US but live in Canada. As I had mentioned before my US employers would always paid my company in Canada.
Having said all that, does that change your initial answer in any ways? Given I made interests from Savngs acct, do I not need to pay uncle sam some $$? I just want to make sure I do the right thing so one day I don't get pulled at the border by tax cops :)