David, If a US business hires a Canadian contractor, they would issue them a T4A, correct? In accordance with U.S. Treasury Circular 230, we are required to inform you that any tax advice contained in this communication (including attachments) was not intended or written to be used for and cannot be used for the purpose of avoiding tax penalties or in connection with promoting, marketing, or recommending any transaction or tax-related matter. --------------------------------------------------------------------- david ingram replies: I wish I had a perfect answer but can tell you that after 44 years of this, it is not easy. If your US business had a building project in Canada and had hired Canadian drywall, Canadian electrical and Canadian Foundation contractors, the law is very clear that all sub trades in the construction business must be issued a T4A no matter what their business status is/was. (However, this law is only five years old and applies to building trrades only. The rest is sort of handled by tradition.) However, if your US company had sold a million dollar computer system and hired a Canadian company to do the installation and the Canadian company had its own payroll, and several employees, there would be absolutely NO need to issue a T4A (or a 1099). The problem usually arises when there is a single individual involved. Again, if the person has an ad in the yellow pages and a website offering computer services and was clearly a self employed person with multiple customers and issued a numbered invoice to the US firm, in my opinion, no T4A or 1099 would be required. On the other hand if a US company hired someone for a job that would usually be recognized as an employer/employee relationship and outsiders would assume that that individual was an employee if asked but the person wants to be treated as a sub-contractor, a T4A and/or a 1099 is clearly the way to go. And, in this situation, the 'employer' company is at risk. I have seen it a hundred times in my 44 years in this business. Someone wants to be treated as a self-employed person and works like that for four or five years and then the contract is over or a dispute arises and they (the self-employed person) can't get another job. The person who 'wanted' to be self-employed goes to the unemployment insurance body and puts in a claim and now lists out 'all' the reasons that they were really an employee but the big bad company refused to make deductions. In these cases, if the employee worked at the employer's premises, used the employer's tools (could be computer for instance) and had a business card identifying him or her as a rep of the big bad company, it is common for the Unemployment Commission to rule that the person 'was' an employee and collect both sides of the insurance premiums retroactively for years 'from the big bad company'. As a consequence, many large organizations (who have been burned and burned and burned by this) refuse to hire anyone as a contractor unless they are incorporated. A famous case took place in Chicago a dozen or more years ago. It was a delivery/messenger service with 300 self-employed people on foot, roller blades, bicycles, scooters, motorcycles, vans and big trucks. They were all ruled to be employees retractively even though they did not alwasy come in to work and supplied their own vehicles or method of transportation. At the time, I thought it was the sillies thing I had seen. I have just spent half an hour on the web trying to find a reference to the case and could not. If anyone else has a reference, please send it to me because it was a good case. I read it in some business publication like Fortune or Business Week (not TIME or NEWSWEEK) or maybe even a Trucking magazine. I did keep the article but have moved offices twice since and the article is buried somewhere or was turfed by an overzealous 'get it organized' person - I am always having to go thrugh the garbage to get my stuff. ---------------------------------------------------------------------------------- On December 25, 2007, 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 write 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 Therefore, if an email is not answered in 24 to 36 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: 4466 Prospect Road 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. email to taxman at centa.com www.centa.com www.david-ingram.com 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 & 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. Phone consultations are $400 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. 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 $2,900 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. $1,100 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 $2,900 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 $150 to $500.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Just a guideline not etched in stone. 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. 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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 -------------- next part -------------- An HTML attachment was scrubbed... URL: http://www.centa.com/CEN-TAPEDE/centapede-us/attachments/20080117/725ca560/attachment-0001.html
