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Reading Time: 4 minutes You’re running an e-commerce business. You’ve set up your store(s), ensured sales tax is administered appropriately, set up your initial shipping fees, and added your
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Reading Time: 2 minutes Your liabilities are any debts that you have that must be paid. These can be things like loans, employee salaries, income and sales tax, lease
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Reading Time: 3 minutes Whether you’re a mid-tier enterprise with an office staff and team of independent contractors, a small business owner drawing your salary, or an agency working
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Reading Time: 3 minutes If there’s anything the internet has provided us with, it’s seemingly infinite options. Type “local CPA near me” into any search platform and you are
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Reading Time: 3 minutes As the foundation for accurate financial records and data in any organization, bookkeeping becomes critical when financial reporting and analysis is required. Bookkeeping is the
Reading Time: 4 minutes There are three main tiers of businesses in the United States: Small Businesses, Mid-Sized Businesses, and Enterprise Level Businesses. Each category is typically determined by
Reading Time: 4 minutes There’s plenty of guidance out there for switching accounting software, most of which comes from software providers themselves. But, what do we as CPAs and
Reading Time: 3 minutes Bookkeeping plays a critical role in accounting. Ensuring your financial records are accurate and organized helps your company make better financial decisions, assists with evaluating
Reading Time: 5 minutes Small businesses often face numerous challenges when it comes to managing their finances. They have to ensure that their accounting records are accurate and up-to-date,
Reading Time: 3 minutes Why do small businesses outsource their accounting services? It’s simple. Accounting is a time-intensive, risk- and error-prone element of running a business that impacts everything
As an international firm with offices in Houston and Toronto, our certified tax professionals can help you with US Tax compliance and tax consultancy for tax savings. We are here to help so contact us now.
Empower your organization by putting your finances to work. Our experts help you navigate urgent challenges and a fluctuating economy while improving shareholder value and maximizing business performance.
…or any US resident or citizen living anywhere else in the world, income tax returns need to be filed in the US using the customary Form 1040. This can be filed either separately or jointly (if married).
If you are employed by a US company in Canada, then you fall under the Canada US Income Tax Convention. This means that your employment income is exempt from taxation by Canada unless it is above $10,000 per year. If higher than $10,000, your income is exempt if:
The individual resided in Canada for less than 183 days in any Calendar year
The exemption is not borne by a Canadian citizen or a Canadian resident employer with a fixed base in Canada
If you are self employed US citizen/resident in Canada, aside from filing Form 1040 and Schedule C in the US to declare your worldwide earnings there are other things involved. Based on your current residence, you are required to either pay the US’s self-employment tax (15.3% for incomes up to $118,500) or Canadian Pension Plan (CPP) premiums to cover your social security taxes.
Whether you are considered employed or not in Canada is dependent on whether your primary work place falls under the definition of “Permanent Establishment” as per the Canada-US Tax Treaty.
As a proven resident of both countries, you are at risk for double taxation on your worldwide earnings if you are not careful. The Canada US Income Tax Convention provides solutions for this.
As a U.S citizen or resident alien having a tax home in a foreign country (i.e., place of business/employment permanently or indefinitely based in a foreign country) and meeting the criteria of either the Bona Fide Residence Test or Physical presence Test, you can elect “Foreign Earned Income Exclusion”.
Foreign housing cost is also excludable for payments made by an employer either on your behalf or as a reimbursement for incurred housing cost. This amount is taxable foreign earned income. (Availing this may in some cases offset your earned income exclusion).
Foreign Tax Credits (FTC): If you are a US citizen or expat paying foreign income taxes, the same foreign income will become a US tax liability. To alleviate that burden of 2-country double taxation, you are provided with appropriate tax credits on your US tax liability.
For assistance in planning and transferring your U.S. assets to Canada, please contact our colleague Phil Hogan, CPA, CA, CPA at (25) 661-9417 or phil@philhogan.com
