Canadian Self-Employed working in US

[AndyC]

Hi,
As a Canadian, can I register a company in Canada and work and live in US? I can do contract service work for an IT company in US and invoice them.

Is that legal?

[Steven]

"A corporation is located where the work of the corporation is ordinarily performed." Which is a relatively famous piece of caselaw.

You have no work authorization in the US I assume, so the answer is "no". Even if you did it doesn't make sense because as a non-resident the Canadian corporation would be subject to the full whack of Part 1 tax rather than the reduced CCPC rate, plus it would be subject to US corporation taxes because you're doing the work in the US, not Canada (so it would have to claim a foreign tax credit and file a US tax return). And the corporation would have to have an EIN in the US and a US payroll in order to pay you (in addition to a Canadian business number), which is needlessly complex.

Far simpler to set up a US corporation and work for it in the US. If you want to set up your own business in the US the usual way of doing it is to get an E-2 visa: http://toronto.usconsulate.gov/content/ ... ment=evisa

[stephenw]

Steven, I have been searching for this type of info for a long time. Thank you so much for sounding like you know a bit about this topic.
Can I ask your opinion on this senerio, I am Canadian, live in vancouver, want to buy a coffee shop in usa, will set up a usa corporation. With that usa corp., will I be able to pay employees and live there 6 months minus a day.
Taxes through usa corp??
payroll through usa corp??
no work visa or green card because I work for my usa corp??

Your thoughts,

Stephen w

[agnelson]

You can buy the shop, but you absolutely cannot do any work there, including paying bills, hiring, etc -- unless you get an E2 visa.

So one of your employees would be a full-power manager.

[saccharine]

Hi everyone,

I have a similar question. I immigrated to the US on a k-1 visa and subsequently received a work permit and just a few months ago, a Green Card.

My previous employer in Canada has hired me to be an independent contractor. So, I created a sole proprietorship business and filed for an EIN with the IRS.

I have been working for the Canadian company, getting paid in CDN$ which is deposited in a CDN bank account. I use a brokerage firm to transfer the CDN$ to my US$ bank account.

I know that I have to pay US taxes. I just need to know how I go about translating my CDN$ income to US$. Do I use the exchange rate for the date the funds are deposited in my CDN account to calculate the US$ equivalent? (I have supporting evidence of funds received through my contract as well as invoices.)

I have contacted two accountants in NYC and they have not been able to give me a straight answer. I hope you will! (My tax return should be pretty straightforward beyond this exchange rate dilemma.)

Thanks in advance for any feedback.

[agnelson]

The IRS prefers that you use the per transaction exchange rate. However, for several payments over many months, an average rate over that period can be used. You simply need to be consistent.

Bank of canada website has a tool that calcs average rates over any period of time you choose.

[Cleigh50]

I'm probably posting this in the wrong forum, if so I apologise. I'm a Canadian and my spouse and I would like to relocate to Arizona. I'm able to work in a telecommuting situation with my current employer. Are we able to purchase property and live there more than 6 months of the year?

[agnelson]

Telecommuting is a grey-area right now in terms of immigration policy as well as taxation. There are other threads on this.

However, even if telecommuting were considered legal and you correctly reported your income to all the proper taxing authorities, the problem is that you would not have a long-term legal status to (a) actually live in US, and (b) be able to give up your home in Canada.

So the best you could do is, like many snowbirds, have a second place in AZ, and stay there part-year, all the while maintaininga full-fledged home in Canada.

If you are willing to do this, then you and your firm can investigate the possibility of legally telecommuting.