Tips to File Your US Taxes in Canada. Or, Hire a US Tax Accountant

You may live in Canada and work for a US company. Thus, you can worry about managing and navigating your tax obligations. Here are some of the questions that may lead you to wonder about your tax obligations:

  1. Do I have to pay US taxes?
  2. How does paying US taxes may impact my Canadian taxes?
  3. Can I charge Canaina sale tax to the US clients?
  4. Where and how exactly do I pay taxes if I’m a Canadian who works and lives in the US? 

Hiring a US tax accountant in Canada is a solution to finding and filing your taxes. Moreover, hiring a tax accountant from a professional accounting firm, GTA Accounting can also help you meet your tax obligations. Nonetheless, we shall also give you some tips regarding filing your US taxes in Canada.

Tax Implications on Canadians Who Work for a US Company

Firstly, Canadians can legally work for a US company. Many US companies can employ Canadians for a multitude of reasons. One of the reasons is the lower cost of hiring Canadian workers. Or to provide specific services or education that only Canadians can provide for the US firm. Moreover, Canadians who work for US companies have tax obligations that they have to meet. 

Tips on Filing Your US Taxes in Canada

Here are some tips you should keep in mind to file your US taxes in Canada:

Correctly Report Your US Income on Tax Return:

Whether you are a Canadian freelancer or business owner in Canada, you must report your year-round income to the CRA. It doesn’t matter you earn income through contracts or full-time employment; you must file your US income on tax returns. Remember to report your income in CAD instead of USD when submitting your T1. Additionally, you will get a W-2 form at year-end for tax reporting to outline your earned income in USD. Here are things to remember to file your tax report correctly:

Document all of your foreign income on line 104 of the T1 form

Use Accredit Bank’s Exchange Rate like Bank of Canada Report to convert the amount into CAD from USD. 

Provide information about US taxes, benefits, or retirement plans if available, on line 207 of your Canadian tax return. You may qualify for deducting these contributions under the Federal Foreign Tax Credit. 

File Your Tax Return Even If You Don’t Get W-2 Form:

Any US tax accountant in Canada will emphasize paying your taxes on time. You will still need to pay your taxes if your US employer doesn’t send you the W-2 form. In case the employer doesn’t send you the W-2 form, you must report all of your earned income to the CRA. You have obligations to pay taxes on time in Canada; otherwise, be prepared for tax penalties from the CRA. 

Realize If You are US Tax Exempt:

Canadian freelancers or independent contractors who serve an American client of a US company are US tax-exempt. Nevertheless, you must report all of your income on your tax return as a self-employed worker in Canada irrespective of your clients.

Filing Your Taxes If You Live and Work in the US as a Canadian:

If you live and work outside Canada exceeding 183 days in a year, consider yourself a non-resident Candian for taxes. Non-resident Canadians must file taxes on income they earn through Canadian sources. For example, you own a rental province in the Canadian province and work for a US company. Then, you have to pay your Canadian income tax on the rental income you earn throughout the year.

Keep these things in mind to file your US taxes in Canada. Nevertheless, hiring a US tax accountant will overcome the burdens of reporting your US income on your Canadian tax return.

Conclusion

You may work for a US company in Canada and worry about filing your taxes to the CRA. Nevertheless, Canadians who work for US companies have to meet tax obligations. Keeping the following four things in mind can aid you in filing your US taxes:

  1. Correctly Report Your US Income on Tax Return
  2. File Your Tax Return Even If You Don’t Get W-2 Form
  3. Realize If You are US Tax Exempt
  4. Filing Your Taxes If You Live and Work in the US as a Canadian

Lastly, hire a US tax accountant to file your US taxes in Canada with minimum tax burdens. 

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By Cary Grant

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