Correct. I don't plan to start any investments in Canada since it is going to overly complicate managing them including taxation - an unnecessary overhead if one is employed in the US, and plans to return in the short term 2-5 years. This is just my opinion and approach, not a financial advice
Cross Border Tax
- Thread starter mayple
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Cool. Got it brother ! Keep posted if you hear anything otherwise. For now. even i do not have any plans to any investments here. I ll keep you posted if extra info i get to know. tc
I am in the same boat as you guys with "yes" to all the 5 questions asked. If we are filing US taxes as a NR (non-resident), do think about does it impact your H1B status ?
I have contacted my company's lawyer and he mentioned you shouldn’t be staying outside of US for more than 180 days if you are on H1B. This is because if you are outside of US for more than 180 days you become a US-NR. And if you are a US-NR, this means you are foreign employee for your organization who is offering you full time job. Now US Department of Labor wants all full time jobs should be taken by residents ONLY, so they impose extra taxes on the organizations who offer full time jobs to foreign workers.
By filing tax as a US-NR, you are making your employer do tax evasion ! If there is any enquiry on your H1b by USCIS asking your employer about your residency status and filing of taxes as a NR then it's an issue for your employer and you may get fired.
So this is the explanation which I got from my firm's lawyer but as per him this MAY happen, he does not know what kind of inquiry USCIS can do or will they even ask about residency status or even USCIS will check how we filed our taxes.
I filed my taxes as a resident in both countries last year and trust me it's A LOT of tax. Would like to hear from you guys if you heard anything different or is there a possibility to file as a NR ?
Hey so the point about staying more than 180 days out of US if you are on H1B is very debatable actually. For instance if one is working on H1B in US and his primary residence is Windsor ON, they will be commuting into work daily. Now according to IRS substantial presence test for the purpose of determining tax status states that one will have to not count the days during which they commuted to work from Canada or Mexico towards the 183 days count, in this case that person will become a NR for tax purposes, and as we know a lot of us are doing this and haven't heard any negative implications of this as well. Actually filling it as a tax resident in USA will make things even more worse, of residents IRS offers many kinds of itemized deductions for which NR's are not eligible, by getting these deductions you will end up paying less in taxes than you have too, you will also receive some refunds from the Taxes withheld if I am not wrong, now you are OK on CRA side because you will only claim credit for the tax paid to IRS, which at this points include fedral tax with held - tax refund + SSN tax + Medicare tax + State Tax + Local Tax, since you have a lot of ties to Canada you will be a resident so nothing to be worried about on this front. Whant happens if IRS decides to audit you? how do you prove you were present for more than 183 days in USA, days which didn't include your daily commute.
Immigration and taxes are two different departments and legal circumstances. Can you provide a legal basis/proof of 180 day physical presence requirement for H1b within the US? To my knowledge, there is NO such requirement. You are, however, encouraged to be in the US frequently while on H1b since your employment visa (whether is H1b, TN1 or any other) is for work in the US. If you're filing taxes in the US (based on whatever your residency status is) then you're not evading taxes. I cannot comment on your tax situation, so you should consult with a qualified tax accountant to get best advice on how you should be filing your taxes. Your H1b status is ONLY meaningful when you're in the US.