My_question_is: Applicable to both US and Canada
Subject: US Taxation
Expert: taxman at centa.com
Date: Tuesday October 25, 2005
Time: 01:12 PM -0700
QUESTION:
I am currently working in the US as an employee for a Canadian employer.
The employer is a consulting firm owned by my wife. I commute back and
forth weekly and have always stayed under the 183 days. All US based
clients have not withheld any tax on Corporate income due to the submission
of W-8BEN forms. I have worked in the following states - Wisconsin, New
York, Florida and Virginia. I am currently working in New Jersey. What US
income tax returns should the company be filing and which returns should I
file as an individual?
==================================================
david ingram replies:
You should be filing a US Federal 1040NR and the relevant non-resident State
tax returns for Wisconsin, New York and Virginia. There is no Florida state
income tax return. The federal return would report all of the money you
have earned in the US based upon your daily rate. I know that you have
washed the money through a corporation but you have received a salary or
something from the corporation as compensation. Break that up by the number
of days and report that amount to the individual states.
Unless you have established a branch office setup in the individual states,
the corporation does not likely have a tax return to file.
However, if you have established an office mail drop in any of the states so
that it looks like you are located there, you will have a nexus and should
be filing a state and federal US return. Go to www.centa.com and click on
"newsletters" in the top left hand box. Click on 1999 and then click on
November for an idea of when a Canadian Corporation with US business MUST
file tax returns.
The 183 days only applies to world income and does not likely apply to you
if you are commuting to the US and your home and personal interests are in
Canada. Article IV of the US / Canada Income Tax Convention would make you
a Canadian taxable resident for world income.
What I wonder about is the visa you are working under.
If you have TN visas for each employer that would be okay but you would need
one for each company unless your wife's company has a TN for you. However,
it is against the policy (as I understand it) for you to get a TN for a
family owned corporation where you and your spouse own a controlling
interest let alone 100%.
Glad to look after the returns for you. We can do them all by fax, email,
snailmail, or courier.
Answers to this and other similar questions can be obtained free on Air
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David Ingram's US/Canada Services
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