work for Canadian clients while in the US

[kizza 1]

Hi!

I am wondering if anybody is in the same situation or would know anything about it.

I am self-employed, work from home on my computer and get all my work through the internet. In theory, I can work from anywhere in the world. All my clients are Canadian, I get paid in CAD$ in a Canadian bank account.

Am I allowed to continue this work while I am waiting for my EAD after I get my K1? I understand that I am not allowed to accept employment in the US until I get the EAD, but is earning money in Canada illegal?

Thanks!

[The_Dude 1,142]

I think the IRS would want a crack at those earnings. If your work product is generated in the U.S., then it is income that was derived from the U.S. and as such subject to income taxes regardless of where your clients, payment source and bank accounts are. I don't know what this would have to do with your EAD however.

[Spoom 8]

Almost certainly no. The law doesn't discriminate based on where your clients are located. If you're physically in the US, you can only work with authorization.

Whether or not USCIS would ever actually hear about it is left to your discretion.

[Udella&Wiz 325]

Almost certainly no. The law doesn't discriminate based on where your clients are located. If you're physically in the US, you can only work with authorization.

Whether or not USCIS would ever actually hear about it is left to your discretion.

not quite correct - EAD is to work in the US legally for a US employer- you can already legally work in Canada. This is not a 'where are you physically located thing' - it's can you work for a US employer (not yet), can you work for a Canadian employer (yes, you can)

There are many threads on this topic. Lots of folks have continued working in some way when they first moved here.

Just remember to report all world wide income when doing your taxes.

[Spoom 8]

Errr... really? Can you back that up with the relevant laws stating that work is defined as only working for a US-based employer and that telecommute work is exempted? Because I've never seen such a law (and it would be highly beneficial to me as I am basically in the same position as the OP, doing freelance web development, except that I'm playing it safe and not working while I'm in the US).

[Udella&Wiz 325]

Errr... really? Can you back that up with the relevant laws stating that work is defined as only working for a US-based employer and that telecommute work is exempted? Because I've never seen such a law (and it would be highly beneficial to me as I am basically in the same position as the OP, doing freelance web development, except that I'm playing it safe and not working while I'm in the US).

Someone else chime in here. I'll go off and search old threads

....oh here's one

http://www.visajourney.com/forums/index.ph...ork+while+in+US

Edited October 13, 2009 by Udella&Wiz

[Spoom 8]

Interesting. I'd still like to see the relevant laws, but it's reassuring that they can't just instantly kickban me from the country for doing something like that.

[thetreble 19]

Several people in the Canadian forum have done this successfully.

[The_Dude 1,142]

The IRS determines it's taxes based upon where the work product or service was performed. So according to their standards telecommuting employment is subject to U.S. taxes. As such, would that not be seen as work done in the U.S.?

[thetreble 19]

I'm not quite sure how it works, Rob. All I know is there are several people here who have done it and many have posted the actual laws in the threads as well. I'm sure they will see this and post.

[The_Dude 1,142]

I know for certain about the tax part, but wonder how the IRS' determination of taxes owed would or would not reflect how the USCIS would view income. It seems logical to me that if the IRS determined that the income was derived from and subject to U.S. taxes that it would be seen as a reflection of the overall government perspective. But then again, I know how much each government agency hates having to base their policy and decisions on what other agencies do.

[Udella&Wiz 325]

The IRS determines it's taxes based upon where the work product or service was performed. So according to their standards telecommuting employment is subject to U.S. taxes. As such, would that not be seen as work done in the U.S.?

Well - sort of. There's a tax agreement between the Us and Canada so you don't get taxed twice, but I still had to report Canadian income on my US taxes and vice versa - they just write it off more or less because it's already been taxed

[The_Dude 1,142]

The IRS determines it's taxes based upon where the work product or service was performed. So according to their standards telecommuting employment is subject to U.S. taxes. As such, would that not be seen as work done in the U.S.?

Well - sort of. There's a tax agreement between the Us and Canada so you don't get taxed twice, but I still had to report Canadian income on my US taxes and vice versa - they just write it off more or less because it's already been taxed

Interesting. I didn't know there was some sort of agreement between Canada and the U.S.. I knew someone who went through virtually the same thing, but ended up having to pay 2 years in back taxes and penalties, but that was another country (Germany).

[Udella&Wiz 325]

The IRS determines it's taxes based upon where the work product or service was performed. So according to their standards telecommuting employment is subject to U.S. taxes. As such, would that not be seen as work done in the U.S.?

Well - sort of. There's a tax agreement between the Us and Canada so you don't get taxed twice, but I still had to report Canadian income on my US taxes and vice versa - they just write it off more or less because it's already been taxed

Interesting. I didn't know there was some sort of agreement between Canada and the U.S.. I knew someone who went through virtually the same thing, but ended up having to pay 2 years in back taxes and penalties, but that was another country (Germany).

Countries who have Tax treaties with the US

http://www.irs.gov/businesses/internationa...d=96739,00.html

[The_Dude 1,142]

The IRS determines it's taxes based upon where the work product or service was performed. So according to their standards telecommuting employment is subject to U.S. taxes. As such, would that not be seen as work done in the U.S.?

Well - sort of. There's a tax agreement between the Us and Canada so you don't get taxed twice, but I still had to report Canadian income on my US taxes and vice versa - they just write it off more or less because it's already been taxed

Interesting. I didn't know there was some sort of agreement between Canada and the U.S.. I knew someone who went through virtually the same thing, but ended up having to pay 2 years in back taxes and penalties, but that was another country (Germany).

Countries who have Tax treaties with the US

http://www.irs.gov/businesses/internationa...d=96739,00.html

Hmmmm Germany is on that list, but I know that my friends Wife had to pay 2 years of federal and 2 years of state taxes. I'm going to have to call him on my lunch break because now I have to know