TAX Canadian in US, then Canada, then back to US

Hi Guys,

I will try to keep this one fairly simple. I lived and worked in the US for 8 yrs on TNs and H1B. I then left the US and moved to back to Canada. I didn't work for any reporting employer while I was there (was a ski bum). However, I did get a medical card, opened bank/investment accounts and moved my cash into Canada.

I am now going back to my old employer, but it looks like I will be working in the USA for about 6 months a year. I'm debating whether I should.

1. Cancel all my canadian ties ASAP, and file with the US only like the last 8 yrs.

2. Get normal salaray, but file in US/Canada as recommended in a few places on this board.

3. Setup a canadian based consulting company, bill the US a consulting fee and then pay tax under a canadian business.

....know that this is complicated sounding. If anyone has contact info for a good accountant (not too $$$) I would appreciate it.

thanks,

John Brodie

You're not clear on the dates, how long have you been in Canada?

If you've only been here a few months and never worked, I can't see any reason why you can't just sever ties again and move back to the US.

However if you're living in Canada and that is your principal residence, then you have to file in Canada as a resident and as a non-resident in the US. So in that situation you would file all the paperwork to move your tax home back to Canada.

Setting up a company if you physically plan on doing the work in the US will be complicated from a tax standpoint because you have to pay taxes proportionally based on where the work is performed. The simplest way around that problem is to be directly employed while in the US and get a W-2 and be registered self-employed in Canada and invoice them for the work done in Canada which is the usual method for "one-off" Canadian-based employees who work in the US part of the year. But you would be resident in Canada, which of course means you will pay Canadian income taxes (after a foreign tax credit for the US tax) on your income.

On TN-1 or H-1B you have to be directly employed anyway while in the US.

Sorry about the confusion with the dates.

I will have been in canada September thru Jun. I only filed US taxes this year, so I will basically look like I've been in canada from Jan - Jun (5 months). I'm planning on going back to BC to ski for the winter (Jan - May) again next year. Do I have to close all of my accounts? Seems like a bad time to bet on the US dollar for long term savings!

appreciate the info, this site is great,

John

You don't have to close any of your accounts in Canada, but you do need to tell them you are not resident for tax purposes.

Frankly to me it sounds like you've just been on a long vacation, the only reason it's not is because you got a healthcare card, you need to get rid of it and any other things only a resident could get, like a DL.