Self-Employment - Transborder Taxes

[elsoar 3]

Is anyone in a situation where they are self-employed (eg, not an employee), based in the US and working for a Canadian company (eg, work is performed in the US, by computer, for instance)? I am trying to understand the tax implications of such a situation. I think I understand that when you are self-employed, it is like you are a mini-business. So the Canadian company is your client. So you don't pay Canadian taxes, since you neither live nor work in Canada (you just have a Canadian client), but you do pay US taxes on the income you earn from your contract/work for the client.

Can anyone back this up from experience, and/or point me in the direction of official documents that confirm this is how it is? Also, if anyone has any pointers on getting started being self-employed, I'd appreciate it - so far I've just read the irs.gov site and a few web forums...

Thanks for any advice - this stuff is going to drive me crazy!

Elly.

[shawna7 4]

Is anyone in a situation where they are self-employed (eg, not an employee), based in the US and working for a Canadian company (eg, work is performed in the US, by computer, for instance)? I am trying to understand the tax implications of such a situation. I think I understand that when you are self-employed, it is like you are a mini-business. So the Canadian company is your client. So you don't pay Canadian taxes, since you neither live nor work in Canada (you just have a Canadian client), but you do pay US taxes on the income you earn from your contract/work for the client.

Can anyone back this up from experience, and/or point me in the direction of official documents that confirm this is how it is? Also, if anyone has any pointers on getting started being self-employed, I'd appreciate it - so far I've just read the irs.gov site and a few web forums...

Thanks for any advice - this stuff is going to drive me crazy!

Elly.

I can't help you completely with your question..but I can tell you what I was told by the international tax office in canada..

I work in the usa as a hairstylist..but when I'm in canada(every 6-8 weeks) I work a couple of freelance days..as long as the money I earn in canada does not exceed 10,000 in the tax year..I simply claim it on my US taxes( theres a different way to claim it then regular income.. but thats a whole other story..lol) but if I make more than 10,000..I will have to pay canadian taxes..

I hope this helps a bit

[tbaygrrl 2]

If I recall right,

My accountant, who has many expat Canadians as clients ( I was one) did say that you could call your self a consultant and therefore you are consulting with a Canadian company, but you, yourself are working and based out of the USA. Therefore, as long as all your pay stubs have your US address on it and they are mailed to the US you are only required to file with the IRS and not with Revenue Canada.

If you have an accountant near you, just call and see if you could just set up a 5-10 minute consultation with them. Can't hurt, and it will clear your mind and put you at ease.