CANADA Your gonna love this one.........its complicated -
Saturday, April 19 2008 @ 11:17 PM GMT-7
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 justplain silly.
If your visa was issued by a US company, you are supposed to be workingint he US for 'THAT' company. You did not have a visa towork for your company in the US. If you were working for your companyin 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) andSocial Security taxes to the US from the first day you started workingthere. How anyone smart enough or qualified enough to get a TN visawould not realize that is beyond me. If you paid someone to do thoseCanadian returns for you and he or she did not say "Whoa!, something iswrong here", make a note to yourself that you should not be using thatperson in the future. They should have their sign taken down andburned. 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 atax credit or refund back from Canada. You likely did not owe anythingto Canada if you have been living and working enough in the US to getmarried. 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 fewdays. 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 foryou in May or June. U You need help.
As a US resident with a Canadian Corporation, you also need to fileform US form 5471 as well. Failure to file this US form to report yourCanadian corporation's internal earnings can result in a $50,000 peryear fine. Read the form and instructions at www.irs.gov.
If you do not want to send it here, some other possibilities and hintsare:
HINT one.
You should only use a December 31 year end for the Canadian companybecause the US 5471 forms will be much cheaper if you are set up as aDec 31st year end. By the way, failure to file the 5471 forms is aminimum penalty of $10,000 for the first 90 days and $10,000 every 30days thereafter to a maximum of $50,000 a year per shareholder of theCanadian 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 ofform TDF 90-22.1 which has a minimum fine of $10,000 to a maximum fineof $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 TDF90-22.1 and an 8891 have to be filed. If they can not answerimmediately, then you do not want to be their guinea pig. Now, it willbe likely that the person who answers the phone does not know so do notask them so that they can write it down, say no one is available andthen have someone else phone you back after getting a chance to look upthe answers.
Save the questions for the actual tax person.
Hint three.
I would forget about the corporation unless you know it is going tomake you a fortune. It 'reallllly' complicates your life! there is noway that being the president of a non-resident CANADIAN corporation isworth the hassles unless it is making you $100,000 a year or more in myopinion.
But you still have and had the corporation.
Some hints to get them done. Who could look after you if you do notsend it here?
Gary Gauvin is absolutely qualified to deal with you. Heis an old business partner of mine from Ottawa. He now practicesoutside of Dallas Texas as a one or two person office. If you dealwith Gary, you will deal with Gary. He is a US enrolled agent. Youcan 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 talkto Gary.
Gary likes corporations. I and my three associates do not likethem. I like dealing with individuals who deal cross-border withOUTcorporations.
OR KPMG in Vancouver. The last time I checked theyhad 22 people in their US/Canada department. call (604) 691-3025. Advantage - Lots of Backup. Disadvantage - It will be hard to get thesame 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 oneor two hours a year. If I have a suggestion, it will be worth it. IfI can't come up with anything, you will know that what you are doing islikely the best track. I will compare it to my dentist. When I wentin the fall of 2005, I ended up with $16,000 to $18,000 of dentalbills, 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 findanything wrong except that I was not flossing. Which one did iappreciate more?
Well both - the first time was expensive but dealt with years ofneglect. The second said I am on the right track.
Why do i recommend others? I can't begin to look after the number ofcalls I get now. And, more importantly, business partnerships break up,marriages break up, people die and sometimes, there is a personalityclash. To my knowledge, I have never communicated with Steve Peters inHalifax. I only know of him from work I have seen. at that time, hewas on his own. He has joined KPMG since then.
I have never communicated with Kevin Nightingale either. Samereference. Good work and a reputation with Jonathon Chevreau of theNational 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 workand he is a class act. When he is not doing US / Canada tax returns,he plays in the Victoria symphony Orchestra.
Good luck.
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On April 6. 2008, DavidIngram wrote:
It is very unlikely that blind or unexpected email to me will beanswered. I receive anywhere from 100 to 700 unsolicited emails a dayand usually answer anywhere from 2 to 20 if they are not from existingclients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject lineand get answered first. I also refuse to be a slave to email and donot look at it every day and have never ever looked at it when I am outof town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and helpHowever, I regularly search for the words"PAYINGCUSTOMER" 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 notesto myself have been spammed out and as an example, as I wrote this onDec 25, 2007 since June 16th, my 'spammed out' box has47,941 unread messages, my deleted box has 16645 I have actually lookedat and deleted and I have actually answered 1234 email questions forclients and strangers without sending a bill. I have also put aside847 messages that I am maybe going to try and answer because they lookinteresting. -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 orphone 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 theCanadian return as a guide for seven years at a time will be from $150to$600.00 per year depending upon numbers of bank accounts, RRSP's,existence of rental houses, self employment, etc. Note that thesereturns tend to be informational rather than taxable. In fact, ifthere are children involved, we usually get refunds of $1,000 per childper year for 3 years. We have done several catch-ups where the clienthas received as much as $6,000 back for an $1,800 bill and one recentlywith 6 children is resulting in over $12,000 refund.
David Ingram expert income tax service and immigration help andpreparation of US Canada Mexiconon-resident and cross border returns with rental dividend wagesself-employed and royalty foreign tax credits family estate trust trustsincome tax convention treaty advice on bankruptcy dual citizenship
It is very unlikely that blind or unexpected email to me will beanswered. I receive anywhere from 100 to 700 unsolicited emails a dayand usually answer anywhere from 2 to 20 if they are not from existingclients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject lineand get answered first. I also refuse to be a slave to email and donot look at it every day and have never ever looked at it when I am outof town. e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help
Therefore, if an email is not answered in 24 to48 hours, it is likely lost in space. You can try and resend it but if important AND YOU TRULY WANT OR NEEDAN ANSWER from 'me', you will have to phone to make an appointment. Gillian Bryan generally accepts appointment requests for me between10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, LosAngeles) time at (604) 980-0321. david ingram expert US Canada Canadian American Mexican Income Tax service and help.
david ingram's US / Canada Services
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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:
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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 orphone 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 orconsultation and is to be regarded only as general comment. Nothingin this message is or should be construed as advice in any particularcircumstances. No contract exists between the reader and the author andany and all non-contractual duties are expressly denied. All readersshould obtain formal advice from a competent andappropriately qualified legal practitioner or tax specialist for experthelp, assistance, preparation, or consultation in connection withpersonal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must beincluded." e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help.
David Ingramgives expert income tax service & immigration help to non-residentAmericans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen - out ofcountry investments are all handled with competence & authority -dual citizenship
Phone consultationsare $450 for 15 minutes to 50 minutes (professional hour). Please notethat GST is added if product remains in Canada or is to be returned toCanada or a phone consultation is in Canada. ($472.50 with GST if inCanada) expert US Canada Canadian American MexicanIncome Tax service and help.
This is not intended to be definitivebut in general I am quoting $900 to $3,000 for a dual country taxreturn.
$900 would be one T4 slip one W2 slipone or two interest slips and you lived in one country only (but werefiling 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 onerental
$1,300 would be the same with onebusiness no rental
$1,300 would be the minimum with amove in or out of the country. These are complicated because of theback and forth foreign tax credits. - The IRS says a foreign tax credittakes 1 hour and 53 minutes.
$1,600 would be the minimum with arental or two in the country you do not live in or a rental and abusiness 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 andyou 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 andno capital gains, etc. for $200.00 up.
With a Rental for $400, two or threerentals for $550 to $700 (i.e. $150 per rental) First year Rental -plus $250.
A Business for $400 - Rental andbusiness likely $550 to $700
And an American only (lives in the USwith no Canadian income or filing period) with about the same things inthe same range with a little bit more if there is a state return.
Moving in or out of the country orpart year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for thefirst 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 - (maybeamalgamate 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 theCanadian return as a guide for seven years at a time will be from $150to$600.00 per year depending upon numbers of bank accounts, RRSP's,existence of rental houses, self employment, etc. Note that thesereturns tend to be informational rather than taxable. In fact, ifthere are children involved, we usually get refunds of $1,000 per childper year for 3 years. We have done several catch-ups where the clienthas received as much as $6,000 back for an $1,800 bill and one recentlywith 6 children is resulting in over $12,000 refund.
This is aguideline not etched in stone. If you doyour own TDF-90 forms, it is to your advantage. However, if we put themin the first year, the computer carries them forward beautifully.
This from "ask an income trusts tax service andimmigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate taxreturns with multi jurisdictional cross and trans border expatriateproblems for the United States, Canada, Mexico, Great Britain, UnitedKingdom, 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, StVincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 stateswith state tax returns, etc. Rockwall, Dallas, San Antonio Houston,Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax andImmigration Tips, Income Tax Immigration Wizard AntarcticaRwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6Non-Resident Real Estate tax specialist expert preparer expatriate antimoney laundering money seasoning FINTRAC E677 E667 105 106TDF-90 Reporting $10,000 cross border transactions Grand Cayman ArubaZimbabwe South Africa Namibia help USA US Income Tax Convention. Adviceon bankruptcy e bankruptcy expert US Canada Canadian American Mexican Income Tax service and help .
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