Live in Canada, work across the border

Canada Immigration Forum (discussion group)            
Subject: Live in Canada, work across the border
  Question for one and all. I am little confused about tax implications.

If I live (reside) in Canada, but work for a US company (say over the internet) how will my tax be deducted from the paycheck ? Same as its been happening in the US ?

Would I owe taxes to Canada too ? (I guess I will !) If yes, what % of the paycheck will be my residual income (in the bank) ? (hope its in the double digits LOL !)

Also, will my residence count towards the "time" done to satisfy 2 of the 5 years in Canada clause ?

Thanx guys !!

(in reply to: Live in Canada, work across the border)
What I know that if you have a job outside Canada your taxes will become higher, but let us wait for the experts in this forum to give some answers because I want to know too.
Tax implication (in reply to: Live in Canada, work across the border)
I think you need to talk to a tax expert to analyse your situation in detail and give you a proper answer.

However, here´s my unprofessional opinion. If you live in Canada, then you are a Canadian Tax resident. There are exceptions and proviso to this rule, but they may not be applicable in your case. If you are Canadian Tax resident, then you are subject to Canadian Tax laws, not US tax laws.

With regards to your source of income, this is a little bit tricky. The tax treaty between US and Canada would override local legislations. A tax expert should be able to determine if your income falls within the definition of the incomes that are within the scope of this tax treaty.

If your service is provided to a US company for a US related service, then their payments to you would be a payment to a non-resident of US (for tax purposes), hence a standard deduction is applicable. You must also, understand that in US, there are not only federal tax laws, but also individual State tax laws. So it can get complicated.

The US tax deduction would be considered for a Foreign tax credit, when calculating your Canadian Income tax.

These kinds of cross-border income tax related matters, can get very complicated. This is why there are separate departments within accounting firms, that deals exclusively with international tax.

The amount of information, that you´ve given is not much. You would need to give a whole lot more, just to arrive at a reasonable sound answer.

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