PDA

View Full Version : US citizen working for a US company in another country


Seven
10-26-2005, 03:48 PM
My family and I are in the last stage of moving to Vancouver BC (we’re just waiting on work visas). After the move I will still retain a US mailing address and bank account.

Currently I’m a US citizen living in the US and an employee of a US company. This company is playing with the idea of allowing me to continue work after I move. I’m in the process of writing up the details on how telecommuting for my position would technically work. This position would remain indefinitely.

The one thing I’m not sure of is how to arrange my work position. The concept now would be I remain an employee of the company and move from full time salary to part-time hourly. If I understand correctly I would still pay my Federal and State (Oregon) taxes in the US. My check would be direct deposited into my US bank account and I would write myself a check when I needed to transfer funds to my Canadian account.

Question 1) Would I need to pay any sort of Canadian income tax using this method? I wouldn’t think so because I’d remain an employee of a US company.

The other method would be I become an independent contractor based in Canada. As I’m not up on how Canadian business licenses and taxes work, I’d rather not go this direction straight away.

Question 2) Is the idea of being a US citizen telecommuting across the border for a US company the best position? Is there another way to set this up that might work better?

I don’t know if it makes a difference but my wife will begin working for a Canadian company after the move. It is that job that gives us both the Canadian work visas.

Crandolph
10-26-2005, 04:11 PM
My understanding is that you have to be working/living abroad for 50 of 52 weeks in a calendar year to be exempt from US federal income tax, or at least this was the case 4 years ago. If you're not going to be away for that long other factors might become moot. That's one of the first things I'd check on.

I don't know what the rules are on the Canadian side of things, nor how Oregon would deal with you.

Cliffy
10-26-2005, 04:16 PM
Question 1) Would I need to pay any sort of Canadian income tax using this method? I wouldn’t think so because I’d remain an employee of a US company.
I have no idea what the answer is, but I do not think this is a safe assumption. That's not even how it works in some states. Your company HR or Payroll department may be able to assist you with this, although you should make sure to independently verify any advice they give you.

--Cliffy

Seven
10-26-2005, 06:15 PM
My understanding is that you have to be working/living abroad for 50 of 52 weeks in a calendar year to be exempt from US federal income tax, or at least this was the case 4 years ago. If you're not going to be away for that long other factors might become moot. That's one of the first things I'd check on.

I don't know what the rules are on the Canadian side of things, nor how Oregon would deal with you.

If I remained an employee of the company I expected to pay fed tax.

I know people who live in Washington but work in Oregon. They pay state income tax in Oregon because that is where the income is coming from. The people who live in Oregon and work in Washington do not pay income tax. They get the best of both worlds because Oregon doesn't have sales tax.

ishamael69
10-26-2005, 06:51 PM
See IRS publication 54 for general information on working abroad.(indirect link) (http://www.irs.gov/businesses/small/international/article/0,,id=96796,00.html)

See this page (http://www.irs.gov/publications/p597/ar02.html#d0e619) for some other info.

As far as state taxes, I would assume that you would pretty much wind up exempt, since you are no longer a resident. However, I don't know.

Cerowyn
10-26-2005, 09:36 PM
You will be required to fill out Canadian tax forms as a Canadian resident. However, you will be credited with any taxes you pay to the US if they require you to; that is, it will be deducted from any money you owe to Canada. As you can probably glean from the information above, US citizens always have to file, regardless of where they live (although, I believe they have a simple 'non-compliance' form that you can fill out if you've been remiss but don't owe anything for the years you failed to file).

You're getting the reverse treatment of why Canadians love to work in countries that only tax citizens (such as much of the Middle East); we don't have to file Canadian taxes unless we are resident in Canada.

Send questions for Cecil Adams to: cecil@straightdope.com

Send comments about this website to: webmaster@straightdope.com

Terms of Use / Privacy Policy

Advertise on the Straight Dope!
(Your direct line to thousands of the smartest, hippest people on the planet, plus a few total dipsticks.)

Copyright © 2018 STM Reader, LLC.