Canadian Citizen on TN in USA
Hello Taxman!!
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> I have a question for you. I am an IT Consultant working in the USA on a TN Visa, but with a Canadian Citizenship. I had been doing this for over a year with my former Canadian employer. This tax year, I submitted US federal and state income tax returns with foreign income, and then I filed a Canadian return. This coming year, my situation will change. I plan to incorporate myself in either Canada or the USA , I was thinking a Delaware LLC, but I’m not sure which would be more beneficial for me. I will be getting contracts on 1099 with no tax withholdings. My residence is in New Jersey , but I have real estate in Ontario as well. What will be my tax liabilities? I’m assuming I still have to do returns for both countries, personal and corporate, but who would I actually pay tax to, and to which country would I be reporting as foreign income?
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> Also, I’m wondering about RRSP’s? Are these deductible in the USA too, or do I need to open up an American IRA?
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> I will most likely dump off all my receipts to an international accountant and let them do it all for me. But I guess I could use some advice on what would save me the most in tax dollars. BTW, what are your fees like, to do personal and corporate returns, Canada and US?
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> Thanks a lot.
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> david ingram replies:
Watch out - incorporating could end up with your being denied a TN visa. Remember that you need a separate TN for each company you consult for unless you are an employee of one company that is selling your service. If so, you can NOT be the controlling or even a major shareholder.
Your tax liabilities depends upon where you are deemed to be a residient under Article IVof the US/Canada Tax Treaty.
An RRSP does you no good in the USA. It also requires you to file forms TDF 90 and 8891. If you already have an RRSP, these must be filed already.
If you are a resident =of the US, you will pay tax on your world income to the US. If you have Canadaian income, you will pay tax to Canada first on that income and then claim foreign tax credits in the US on form 1116 for the tax paid to Caanda.
>
> I have a question for you. I am an IT Consultant working in the USA on a TN Visa, but with a Canadian Citizenship. I had been doing this for over a year with my former Canadian employer. This tax year, I submitted US federal and state income tax returns with foreign income, and then I filed a Canadian return. This coming year, my situation will change. I plan to incorporate myself in either Canada or the USA , I was thinking a Delaware LLC, but I’m not sure which would be more beneficial for me. I will be getting contracts on 1099 with no tax withholdings. My residence is in New Jersey , but I have real estate in Ontario as well. What will be my tax liabilities? I’m assuming I still have to do returns for both countries, personal and corporate, but who would I actually pay tax to, and to which country would I be reporting as foreign income?
>
> Also, I’m wondering about RRSP’s? Are these deductible in the USA too, or do I need to open up an American IRA?
>
> I will most likely dump off all my receipts to an international accountant and let them do it all for me. But I guess I could use some advice on what would save me the most in tax dollars. BTW, what are your fees like, to do personal and corporate returns, Canada and US?
>
>
> Thanks a lot.
>
>
> -----------------------------------------
>
>
>
> david ingram replies:
Watch out - incorporating could end up with your being denied a TN visa. Remember that you need a separate TN for each company you consult for unless you are an employee of one company that is selling your service. If so, you can NOT be the controlling or even a major shareholder.
Your tax liabilities depends upon where you are deemed to be a residient under Article IVof the US/Canada Tax Treaty.
An RRSP does you no good in the USA. It also requires you to file forms TDF 90 and 8891. If you already have an RRSP, these must be filed already.
If you are a resident =of the US, you will pay tax on your world income to the US. If you have Canadaian income, you will pay tax to Canada first on that income and then claim foreign tax credits in the US on form 1116 for the tax paid to Caanda.
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