QUESTION: I have been working in the USA on a TN-1 visa scince 2005. I have a alberta incorperated company that I work for and am the only employee. My company is contracted to another Canadian company which in turn contracts me to a USA company(which is Canadaian owned). So FAr so good? I have been doing my company taxes and personal taxes every year like Im suppose to. Now I find out that Im required to pay USA tax as well? And To complicate things more I recently(last oct) got married to a American. And Am going through the whole green card thing. My employer never had me sign any tax(w7) forms and therefore never with held any tax or cpp. Am I requried to pay USA personal and corperate tax? One or both...Help this is all so confusing.... xxxxx ------------------------------------david ingram replies:
Your situation is NOT complicated. I hate to be rude, but it is just plain silly.
If your visa was issued by a US company, you are supposed to be working int he US for 'THAT' company. You did not have a visa to work for your company in the US. If you were working for your company in the US, you were working illegally AND not paying tax. Yikes~!
You were required to pay US Federal and State (if in a taxed state) and Social Security taxes to the US from the first day you started working there. How anyone smart enough or qualified enough to get a TN visa would not realize that is beyond me. If you paid someone to do those Canadian returns for you and he or she did not say "Whoa!, something is wrong here", make a note to yourself that you should not be using that person in the future. They should have their sign taken down and burned. Their phone and Internet connection should also be canceled. They certainly should NOT be in the income tax preparation business.
You need to file those US returns as soon as possible and then claim a tax credit or refund back from Canada. You likely did not owe anything to Canada if you have been living and working enough in the US to get married. You sure as hell owe tax to the United States.
No one who is capable can help you can look after you in the next few days. We are all too busy. File a 4868 extension for the 2007 return (your wife as well) and get someone like us to straighten it out for you in May or June. U=You need help.
As a US resident with a Canadian Corporation, you also need to file form US form 5471 as well. Failure to file this US form to report your Canadian corporation's internal earnings can result in a $50,000 per year fine. Read the form and instructions at www.irs.gov.
If you do not want to send it here, some other possibilities and hints are:
HINT one.
You should only use a December 31 year end for the Canadian company because the US 5471 forms will be much cheaper if you are set up as a Dec 31st year end. By the way, failure to file the 5471 forms is a minimum penalty of $10,000 for the first 90 days and $10,000 every 30 days thereafter to a maximum of $50,000 a year per shareholder of the Canadian company.
In addition the Canadian Company will also likely end up with more than $10,000 in its account at some time and that necessitates the filing of form TDF 90-22.1 which has a minimum fine of $10,000 to a maximum fine of $500,000 plus up to 5 years in jail for failure to file.
Hint two.
When you are trying to find an accountant on either side of the border, start off by asking them what the rules are for when a 5471 and a TDF 90-22.1 and an 8891 have to be filed. If they can not answer immediately, then you do not want to be their guinea pig. Now, it will be likely that the person who answers the phone does not know so do not ask them so that they can write it down, say no one is available and then have someone else phone you back after getting a chance to look up the answers.
Save the questions for the actual tax person.
Hint three.
I would forget about the corporation unless you know it is going to make you a fortune. It 'reallllly' complicates your life! there is no way that being the president of a non-resident CANADIAN corporation is worth the hassles unless it is making you $100,000 a year or more in my opinion.
But you still have and had the corporation.
Some hints to get them done. Who could look after you if you do not send it here?
Gary Gauvin is absolutely qualified to deal with you. He is an old business partner of mine from Ottawa. He now practices outside of Dallas Texas as a one or two person office. If you deal with Gary, you will deal with Gary. He is a US enrolled agent. You can find his website easily. Type - income Tax Expert - into
google. Gary will come up as number one or two. Why, because he is. If I am looking for a first or second opinion, I call Gary. Disadvantage -
Gary is a one person office. Advantage - You will always get to talk to Gary.
Gary likes corporations. I and my three associates do not like them. I like dealing with individuals who deal cross-border withOUT corporations.
OR KPMG in Vancouver. The last time I checked they had 22 people in their US/Canada department. call (604) 691-3025. Advantage - Lots of Backup. Disadvantage - It will be hard to get the same person to deal with you three times in a row.
OR Steve Peters with KPMG in Halifax (902) 492-6011
OR Kevin Nightingale in Toronto (416) 733-9595
OR Len Vandenberg with BDO Dunwoody in Kelowna, BC. (250) 763-7600
OR Steve Katz in Vancouver at (604) 732-1513
OR Brad Howland in Victoria, BC at (250) 598-6258
Whoever you choose, you would likely do well to consult with me for one or two hours a year. If I have a suggestion, it will be worth it. If I can't come up with anything, you will know that what you are doing is likely the best track. I will compare it to my dentist. When I went in the fall of 2005, I ended up with $16,000 to $18,000 of dental bills, a bunch of pain, and a lot of nice new caps, etc.
When I went for an inspection on Jan 29, 2008, he could not find anything wrong except that I was not flossing. Which one did i appreciate more?
Well both - the first time was expensive but dealt with years of neglect. The second said I am on the right track.
Why do i recommend others? I can't begin to look after the number of calls I get now. And, more importantly, business partnerships break up, marriages break up, people die and sometimes, there is a personality clash. To my knowledge, I have never communicated with Steve Peters in Halifax. I only know of him from work I have seen. at that time, he was on his own. He has joined KPMG since then.
I have never communicated with Kevin Nightingale either. Same reference. Good work and a reputation with Jonathon Chevreau of the National Post.
I have never met Len Vandenberg. same story. good work.
Steve Katz and Gary Gauvin worked for me at one time.
I have met Brad Howland once. However, he seems to do very good work and he is a class act. When he is not doing US / Canada tax returns, he plays in the Victoria symphony Orchestra.
Good luck.
-------------------------------
On April 6. 2008, David
Ingram wrote:
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
However, I regularly search for the words"PAYING
CUSTOMER" and always answer them first if they did not get spammed out.
For the last two weeks, I have just found out that my own email notes
to myself have been spammed out and as an example, as I wrote this on
Dec 25, 2007 since June 16th, my 'spammed out' box has
47,941 unread messages, my deleted box has 16645 I have actually looked
at and deleted and I have actually answered 1234 email questions for
clients and strangers without sending a bill. I have also put aside
847 messages that I am maybe going to try and answer because they look
interesting. -e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
$1,700 would be for two people with income from two countries
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
David Ingram expert income tax service and immigration help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty advice on bankruptcy dual citizenship
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
Therefore, if an email is not answered in 24 to
48 hours, it is likely lost in space.
You can try and resend it but if important AND YOU TRULY WANT OR NEED
AN ANSWER from 'me', you will have to phone to make an appointment.
Gillian Bryan generally accepts appointment requests for me between
10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los
Angeles) time at (604) 980-0321. david ingram expert
US Canada Canadian American Mexican Income Tax service and help.
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
Disclaimer:
This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing
in this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and
any and all non-contractual duties are expressly denied. All readers
should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist for expert
help, assistance, preparation, or consultation in connection with
personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be
included." e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help.
David Ingram
gives expert income tax service & immigration help to non-resident
Americans & Canadians from New York to California to Mexico
family, estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence & authority -
dual citizenship
Phone consultations
are $450 for 15 minutes to 50 minutes (professional hour). Please note
that GST is added if product remains in Canada or is to be returned to
Canada or a phone consultation is in Canada. ($472.50 with GST if in
Canada) expert US Canada Canadian American
Mexican
Income Tax service and help.
This is not intended to be definitive
but in general I am quoting $900 to $3,000 for a dual country tax
return.
$900 would be one T4 slip one W2 slip
one or two interest slips and you lived in one country only (but were
filing both countries) - no self employment or rentals or capital gains
- you did not move into or out of the country in this year.
$1,200 would be the same with one
rental
$1,300 would be the same with one
business no rental
$1,300 would be the minimum with a
move in or out of the country. These are complicated because of the
back and forth foreign tax credits. - The IRS says a foreign tax credit
takes 1 hour and 53 minutes.
$1,600 would be the minimum with a
rental or two in the country you do not live in or a rental and a
business and foreign tax credits no move in or out
$1,700 would be for two people with income from two countries
$3,000 would be all of the above and
you moved in and out of the country.
This is just a guideline for US /
Canadian returns
We will still prepare Canadian only
(lives in Canada, no US connection period) with two or three slips and
no capital gains, etc. for $200.00 up.
With a Rental for $400, two or three
rentals for $550 to $700 (i.e. $150 per rental) First year Rental -
plus $250.
A Business for $400 - Rental and
business likely $550 to $700
And an American only (lives in the US
with no Canadian income or filing period) with about the same things in
the same range with a little bit more if there is a state return.
Moving in or out of the country or
part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the
first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to
$100.00 each.
18 RRSPs would be $900.00 - (maybe
amalgamate a couple)
Capital gains *sales) are likely
$50.00 for the first and $20.00 each after that.
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
This is a
guideline not etched in stone. If you do
your own TDF-90 forms, it is to your advantage. However, if we put them
in the first year, the computer carries them forward beautifully.
This from "ask an income trusts tax service and
immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax
returns with multi jurisdictional cross and trans border expatriate
problems for the United States, Canada, Mexico, Great Britain, United
Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan,
China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia,
Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida,
Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan,
Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St
Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states
with state tax returns, etc. Rockwall, Dallas, San Antonio Houston,
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and
Immigration Tips, Income Tax Immigration Wizard Antarctica
Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6
Non-Resident Real Estate tax specialist expert preparer expatriate anti
money laundering money seasoning FINTRAC E677 E667 105 106
TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba
Zimbabwe South Africa Namibia help USA US Income Tax Convention. Advice
on bankruptcy e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help .
David Ingram expert income tax service and immigration help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty advice on bankruptcy dual citizenship
New York, Boston, Sacramento,
Minneapolis, Salem, Wheeling, Philadelphia, Pittsburgh, Atlanta,
Pensacola, Miami, St Petersburg, Naples, Fort Myers, Cape Coral,
Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay, Minot,
Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City,
Tulsa, Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello,
Bellingham, Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas
City, Lawrence, Houston, Albany, Framingham, Cambridge, London, Paris,
Prince George, Prince Rupert, Whitehorse, Anchorage, Fairbanks,
Frankfurt, The Hague, Lisbon, Madrid, Atlanta, Myrtle Beach, Key West,
Cape Coral, Fort Meyers, Berlin, Hamburg, Warsaw, Auckland,
Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing, Shanghai, Tokyo,
Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds, Medicine
Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey,
Edinburgh, Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney,
Nanaimo, Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne,
Zurich, Kyoto, Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos
Aries, Squamish, Churchill, Lima, Santiago, Abbotsford, Cologne,
Yorkshire, Hope, Penticton, Kelowna, Vernon, Fort MacLeod, Deer Lodge,
Springfield, St Louis, Centralia, Bradford, Stratford on Avon, Niagara
Falls, Atlin, Fort Nelson, Fort St James, Red Deer, Drumheller,
Fortune, Red Bank, Marystown, Cape Spears, Truro, Charlottetown,
Summerside, Niagara Falls, income trust, Income Tax Treaty Convention. - e bankruptcy
expert US Canada Canadian American Mexican Income Tax service and
help.
david
ingram
International non-resident cross border expert income tax service &
immigration help estate family trust assistance expert preparation
& immigration consultant, income trusts experts on rentals mutual
funds RRSP RESP IRA 401(K) & divorce preparer preparers
consultants Income Tax Convention Treaty. advice
on bankruptcy expert US Canada Canadian American Mexican Income Tax
help dual citizenship
Be ALERT, the world needs more "lerts". bankruptcy expert US Canada
Canadian American Mexican Income Tax service help. -
expert us Canada Canadian Mexico income tax
service and help help
