i can haz tax advice?

[Caladan 19]

C. working for a Canadian company as a K-1 authorized to work. Since he worked for them before, they just issued his paycheck in Canadian funds and took out all of the Canadian taxes under his SIN and all the rest.

Now, obviously, since we're in the U.S., they have to cut us a new check in American funds because I am neither sitting on a check for six weeks for it to clear or having Bank of America charge us a fee....

But C. will still owe taxes to Canada, right? So should I have them withhold his Canadian taxes or his American ones? They've had him fill out a W-4 and he has his SSN, but I'm wondering if it might be better for him to stay 'Canadian' with this employer.

Anyone else in a similar boat? Anyone have a link to a decent summary about how taxes work with a couple that's straddling a border?

[zyggy 9]

C. working for a Canadian company as a K-1 authorized to work. Since he worked for them before, they just issued his paycheck in Canadian funds and took out all of the Canadian taxes under his SIN and all the rest.

Now, obviously, since we're in the U.S., they have to cut us a new check in American funds because I am neither sitting on a check for six weeks for it to clear or having Bank of America charge us a fee....

But C. will still owe taxes to Canada, right? So should I have them withhold his Canadian taxes or his American ones? They've had him fill out a W-4 and he has his SSN, but I'm wondering if it might be better for him to stay 'Canadian' with this employer.

Anyone else in a similar boat? Anyone have a link to a decent summary about how taxes work with a couple that's straddling a border?

Get US Taxes withheld if they're willing to do that. Getting Canadian Taxes witheld would be much more expensive. If he's working in the US, there will be no Canadian taxes due once he enters the US and leaves Canada. In fact, if he's going to live in the US, it would be MUCH better if they didn't withold anything, pay you in full and send your US taxes to the IRS and to the State yourself.

Having Canadian taxes witheld while you're living and working in the US is bad...

[Caladan 19]

Okay, so at the end of 2007, he's not going to owe taxes to Canada for anything in 2007 post his entry to the U.S.?

[misa 2]

As long as his employer re-submits his cheque in USD and does NOT withhold Canadian taxes or uses his SIN, he will not owe Canadian taxes post US entry.

[Tinker 0]

I'd assume the taxes withheld, while using his SIN number would be under his Canadian Income Tax,(this year to date) but once they start using his SSN instead,because he's living in the US now, that would be American.

I'm thinking like you, he's going to have to file half the year for Canada and half for the US.......

Zyggy?

[zyggy 9]

I'd assume the taxes withheld, while using his SIN number would be under his Canadian Income Tax,(this year to date) but once they start using his SSN instead,because he's living in the US now, that would be American.

I'm thinking like you, he's going to have to file half the year for Canada and half for the US.......

Zyggy?

Correct.. For Canada, you will have to file a leaving Canada return for the income that you earned in Canada up to the date that you left.

For the US, you will have to report his income made during all of 2007, but will be able to exclude the income that was earned while he was resident in Canada.

[Caladan 19]

Thanks. He has to file as married for 2007, right, even though the money earned there was before we married.

Also, uh, if his employer is Canadian, he really doesn't need an EAD, does he? (We have one, but even so...)

[zyggy 9]

Thanks. He has to file as married for 2007, right, even though the money earned there was before we married.

Also, uh, if his employer is Canadian, he really doesn't need an EAD, does he? (We have one, but even so...)

Yes, you put your marital status as of December 31, but it doesn't matter for Canadian taxes really. Where it asks for the SIN of your spouse, you put US Citizen

It doesn't matter if his employer is Canadian, Russian, or whereever.. if you're doing work in the US, an EAD is required.

Just a point of clarification, for your US taxes, you do have to report what he made in Canada as well, but it is excludeable income to a certain amount depending on the time he was residing outside the US.

Edited July 3, 2007 by zyggy

[Billy_boy 0]

ok, so...sorry to sound DUMB here. But my employer, (i sub-contract for a major electronics manufacturer) has offered me the opportunity to finish my Canadian contract, while in the US on the initial 90 days of my K1. We were actually quite happy about this opportunity because we need to save as much as we can...we were just gonna bank the Canadian pay as per usual in my bank account , and convert it to USD when my contract is up, which would be the end of October....my employer does not want to hire someone else and go through training when there is such little time left on contract anyways.

SO....I can't reside in the US, complete my Canadian contract within the 90 days? Even though the money would just be deposited in my Canadian bank acct, minus my Canadian tax deductions etc?? So.....i have no choice but to NOT work or earn an income on my K1??

That's confusing. I honestly did not think there would be any issues with this....looks like i was wrong.