Many people live in the US, but work in Canada and vice-versa. For many, it is easier to simply continue to live where they are now and simply work in another country. This makes the process easier since you do not have to apply for citizenship or residency, but it can be a nightmare come tax time. Luckily, there are companies that offer US cross-border taxation in Ontario, Canada. So what is involved and what do you need to know?
Dual Tax
One of the biggest disadvantages of working in a different country is the need to pay dual taxes. If you are a US citizen, then you are expected to pay income tax to the US government even if you do not work or live in the country. Since you are still living in the US, you will be expected to pay income tax on your wages as well as any applicable property tax or anything else you are taxed for in your area. This can increase your taxes a good bit, but it can be worth it depending on your position.
Resident vs. Non-Resident Taxes
If you are a US citizen working in Canada, then chances are you are not a Canadian resident. This will affect your taxes, but you will need to ask a tax professional who is familiar with cross-border tax filing to find out for sure. Tax laws are constantly changing, so be sure to check on the latest laws when you need to know how your residency will affect your tax filing.
If you are a US citizen working in Canada, then you should expect to pay more in taxes than you would if you were just working in the US, but this amount will depend on your situation. Since tax laws change so often, the best option is to speak with a tax expert who works with cross-border filings.
If you need a tax expert that is familiar with US cross-border taxation in Ontario, Canada, then contact The Taxperts Group.
