Working on TN1 Visa in US as Canadian Citizen, how my Tax declaration should going to work? I am a bit confused. I have to pay Uncle Sam W2/W4 I guess and do I have declare my T4 income in Canada at the same time? Pay Double Tax? I have a house and am incorporated in Canada as Computer professional but that corp doesn't come into play for my US contract. I am under W2 there. Please clear me with an example. Let's say I make 100/Hrs or $100000 annualy in US as an example. How I am going to pay the min tax to US and Canada? any web sites / accountants specific for these kind of situations. Thanks Guys.
You should be able to claim a credit in Canada for the US tax paid on your income reported in both countries (at least that's the way it works Stateside). I think it's on Schedule
This is going to depend on a couple of factors. Unlike the US, which taxes the worldwide income of all of its citizens, Canada taxes only people they consider to be "residents". The definition is a bit complicated and leaves a lot of room for interpretation, but if you have "cut your ties" from Canada, then you will not owe tax during that time. No one factor is a determining one, but if you still own a home in Canada, your immediate family stayed there, you still hold a driving license, medical card, etc there, then you are still a Canadian resident, and will stil have to file a return. If you can say no to all those things, then you are likely a non-resident. (But please don't try to interpret that list too much -- get the list and see if it applies to you, or ask someone knowledgeable.) By the way, if you have a "home" waiting for you in Canada, you are a Canadian resident. Many of my Canadian clients working in the US have a "rental property" in Canada and are non-residents who happen to still have a Canadian investment. Planning!!!
The year you move to the US will be confusing. You will have one of a few situations: If you are no longer a Canadian resident, you will have a T-1 return for the income you made there at the start of the year. You will then have a US return: Either a 1040 return showing all of your income during the year, or a Dual Status return, taxing only your US income but with more restrictive rules. If you are still considered a Canadian resident, you will have both a T-1 showing all of your worldwide income, and one of the US returns shown above.
Actually, no. If you are filing returns that show the same income in both countries, then you will be able to take a credit on your Canadian return for the income tax paid on US income. From your example below, this is probably the case (but again, someone is going to need more details to make a determination). You will not be paying double tax on any income, but you *will* end up paying the higher of the two taxes. However, there is another issue here. Many states will also tax your income -- and there may be some double taxation depending upon the state involved. You can get a Canadian foreign tax credit for state taxes paid, but they might be more than the credit. I have
Frankly, if you expect to have this kind of income, it would be well worth investing an hour or two of time with an accountant knowledgeable with taxes on both sides of the border. You have some things that probably should be sorted out before you start the US job, or at least early on in your stay. The discussion should be specific to your situation, since the answers may not depend only on your current situation (avoid double taxation) but also to future considerations (where should I put my retirement account contributions). The CRA website has an international section with publications specific to your situation Find them and read them. But get some specific advice, too. Good luck!
Bryan
-- Bryan Kellar, EA Oregon Tax Help, Inc. -- Portland, Oregon
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