TN and Corp to Corp

B

bhalochele1947

Registered Users (C)
Hello TN Gurus !!

Would you know whether I can work on a corp to corp basis if I am incorporated in Canada? Will save on Corp taxes if i pay to CCRA? Currently, I am on a H1-B visa and am planning to switch to a TN with another company on an hourly rate...

Your responses would be greatly appreciated..
 
Don't give up your H1-B. They are like gold right now. You can get a green card a little easier - have you done this yet? Figure out a way to use your H the capacity that you want. You should talk to a tax lawyer and an immigration attorney.
 
Switching to TN, if you really have to, would not be 'giving up H1. By h1 regs, once you have had H1, you can always return to it as long as you have not used up your 6-year clock, regardless of the status you are currently in.

So, if you switch to TH, and you had 3 years left on your H1 clock, you could work in TN for 5 years, and still have a valid 3 years left for futuire H1, without being subject to quota.
 
Thanks folks.

From what I can interpret....
If I change from H1-B to TN-1, I can come back to a H1-B as long as I have not completed my 6 years...this seems to be good. Well !! I am still on H1-B but I was debating if I should come back to a TN-1.

By doing a Corp to Corp, I donot have to pay Social Security Taxes in the USA. This means more money in my pocket. As it is I will not be getting any Social Security Benefits since I am not a US citizen. So why pay this money for nothing......

When I was a software consultant in Canada, it seems I made more money remaining Corp to Corp. I could right off so many expenses. It seems I am loosing out now in US with all the taxes I need to pay on a W2.

I checked with someone yesterday. I think a Corp to Corp can be done remaining in a TN.
 
"By doing a Corp to Corp, I do not have to pay Social Security Taxes in the USA"
If you are living in canada, then your statement is true, otherwise WRONG.

This is only true if you maintain Cdn tax residency. You MUST pay eithe CPP or SS somewhere, either on your Cdn return (self-employed) or on your US return (SE tax).

IN fact, you will pay DOUBLE SS tax if you are living in US. You will get to clim expenses however, reducing your SEtax considerably. But you will have to pay some.

To do corp to corp you MUST remain in TN, H1 doesn't work for that.
 
Yes, I agree with you Nelson.

I am paying Canadian Taxes on my world income now. I do meet the residency requirement since I own property in Canada and get a small rental income. I do have to pay CPP - which is fine. However, if it is a Corp to Corp, why would I have tax obligations in US if I am incorporated in Canada?

Your opinion would be greatly appreciated.
 
bhalochele1947 said:
I am paying Canadian Taxes on my world income now. I do meet the residency requirement since I own property in Canada and get a small rental income.
Click to expand...

That alone shouldn't cause you to need to pay Canadian taxes. The fact that you are renting the property out should actually help you WRT non-residency.

I do have to pay CPP - which is fine. However, if it is a Corp to Corp, why would I have tax obligations in US if I am incorporated in Canada?
Click to expand...

If you meet SPT, then you'll certainly have to pay US taxes on whatever you get out of the corporation, if I'm not mistaken.

Nelson knows an awful lot more about taxation than I do, but I think in your quest to be smart and get out of some taxation you are paying too much and setting yourself up for a potential accounting or enforcement nightmare.
 
bhalochele1947 said:
Yes, I agree with you Nelson.

I am paying Canadian Taxes on my world income now. I do meet the residency requirement since I own property in Canada and get a small rental income. I do have to pay CPP - which is fine. However, if it is a Corp to Corp, why would I have tax obligations in US if I am incorporated in Canada?

Your opinion would be greatly appreciated.
Click to expand...

If you were living in US (and just because you have property in Canada does not make you taxable ther, nor does it prevent you from being taxed in US) then you are taxable on world income.

As was pointed out, you may already be paying so much more tax to canada that the minor savings you may be making by not paying SS are a joke.

Besides, you would be self-employed in US, regardless of how the payment was structured, and thus taxable there, including SE tax.
 
bhalochele1947 said:
Thanks Nelson....

However, does that mean, if I get incorporated in the US and work on a TN-1, it would be better?
Click to expand...

This isn't a tax forum.... However you can work on TN on 1099 basis regardless of how you set up the arrangement. A corp is only one way to go.

Where you incorporate, or even whether you should or not and in which way, is best left off here.
 
You must log in or register to reply here.
Top