Discussion:Internet work--foreign earned income?
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| Revision as of 21:44, 24 January 2008 Dennis (Talk | contribs) ← Previous diff |
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| {{ForumReplyPost|UserID=Dennis|Date=24 January 2008|Text=Not with dual citizenship and Canadian residence? Perhaps not. Somewhere I thought there was a tiebreaker election. }} | {{ForumReplyPost|UserID=Dennis|Date=24 January 2008|Text=Not with dual citizenship and Canadian residence? Perhaps not. Somewhere I thought there was a tiebreaker election. }} | ||
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| + | {{ForumReplyPost|UserID=LKfromCANADA|Date=24 January 2008|Text=There are only certain treaty items available to U.S. citizens. The only "double taxation" items available to U.S. citizens in the Canada-U.S. tax treaty address how the foreign tax credits work. | ||
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Current revision
Discussion Forum Index --> Advanced Tax Questions --> Internet work--foreign earned income?
Discussion Forum Index --> Tax Questions --> Internet work--foreign earned income?
| 23 January 2008 | |
| Hello, hope someone can clear this up. I work for a US company based in MD. I recently started working from home, in MD. If I were to move to Canada and continue working (all my work is done on the internet) would this income be considered foreign earned income? I'm a citizen of both countries if that makes a difference. | |
| 23 January 2008 | |
| Check out the Regs for Sec. 911, specifically Reg. Sec. 1.911-3. This situation is a little different and I didn't see anything out there really addressing it. The Code seems pretty straight-forward on this, but it doesn't specifically address this situtation. | |
| 23 January 2008 | |
| If you are a citizen of CDA and you have CDN source income (earned in that state) then CDA gets to tax you on this as well as other worldwide income. As such the US taxes you on worldwide income but you can take a treaty position to not pay taxes to both CDA and the US on the same earned income. | |
LKfromCANADA (talk|edits) said: | 24 January 2008 |
| SandySea, Canada does not tax its citizens. You have to live in Canada or earn income from Canada to be taxable here. A Canadian citizen living in the U.S. and earning all their income in the U.S. is not subject to Canadian tax. A Canadian living in Canada is taxed on his worldwide income.
Jules can move back to Canada. The income would be now be considered Canadian income as his services are performed in Canada. As long as you meet the tests for the foreign earned income exclusion, you should be entitled to the exclusion as the income is "foreign" and "earned". You should check out the Canadian tax consequences as usually tax is higher in Canada than in the U.S.!! | |
| 24 January 2008 | |
| If the tax in Canada is higher than in the U.S. you may want to use the foreign tax credit as any excess credits can be carried over. Make sure to calulate them both. The income exclusion seems less attractive now with the "stacking" calculation. | |
| 24 January 2008 | |
| As Greg has indicated, the foreign tax credit and foreign earned income exclusion may prevent double taxation for U.S. citizens earning income in Canada. However, I am not aware of the treaty provision that Sandysea refers to that prevents double taxation in these circumstances. If such a provison exists, I would be interested in hearing about it. | |
| 24 January 2008 | |
| Personal Service income with no fixed base base of operations in US? | |
| 24 January 2008 | |
| As a U.S. citizen, the savings clause would require U.S. tax on the individual's worldwide income. Thus, personal services performed in Canada (with no fixed based in the U.S.) would still be subject to U.S. tax. | |
| 24 January 2008 | |
| Not with dual citizenship and Canadian residence? Perhaps not. Somewhere I thought there was a tiebreaker election. | |
LKfromCANADA (talk|edits) said: | 24 January 2008 |
| There are only certain treaty items available to U.S. citizens. The only "double taxation" items available to U.S. citizens in the Canada-U.S. tax treaty address how the foreign tax credits work. | |
