How do US green card holders file US taxes when one works in Canada on local contract & work permit, while the spouse works in US?

[scd3]

Scenario

1. I and my family are permanent residents (green card holders) in US. We file taxes in US as “Married filing jointly”
2. In future, I may be working in Canada on Canadian Work Permit, and Canada contract. In which case, I will be earning wages in Canadian $’s and deducting tax there, and traveling frequently back to US. I will be renting an apartment in Canada.
3. My spouse will continue work in the US. My spouse and the family will continue to be in US. She will be earning wages and deducting tax in US. My family will maintain a home in US.

Indicative approach to taxes - my understanding
 
1. In Canada, I will be deducting taxes on my Canadian wages which will be reported in T-4. I will file taxes as a resident in Canada on my Canadian income.
2. In US, I will be considered a resident for tax purposes since my spouse lives in US and I have a green card, and we will continue to jointly file taxes as US residents under “Married filing jointly” category.
3. Generally speaking, it is expected  that I will be able to completely offset taxes paid in Canada with my US Federal tax liability
4. In US, I will incur additional tax liability on account of State tax.
5. In Canada, public healthcare is available but additional private health insurance is required for dental, vision and medicines.
6. Question 1 – Is the above description to taxes and costs involved fairly accurate? Am I missing anything from a regulatory stand point or are there any aspects which have financial implications?
7. Question 2 - Will I be required to OR be able to contribute to Medicare and Social security tax in US if I want to to clock the minimum 10 years of contributing to FICA as soon as possible? If yes, will it be payable at the end of the year when I file taxes in the US and how will I deposit it?
8. Question 3 – Can TurboTax handle the filings as described in both US and Canada?

[jtax]

This is a *very* complicated area. You can figure it out but it requires effort.

See these resources:

https://turbotax.intuit.ca/tips/how-are-taxes-assessed-for-u-s-citizens-working-in-canada-347

https://www.thetaxadviser.com/newsletters/2018/feb/tax-treaty-benefits-us-citizens-residents.html

https://www.irs.gov/businesses/international-businesses/canada-tax-treaty-documents

A couple of key concepts/things to understand. Please realized this is a volunteer forum and while I have some experience in this, I do not have any direct US/Canadian experience and the details matter.

• you say you will be going back and forth. figure out how much presence or what type of presence is need to may you a Canadian tax-resident. https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-mo...
  • if Canada taxes you as a resident it may tax you on all of your income by default . the tax treaty may be very important in that case. If not and you are just taxed on your Canadian job income, everything will be much easier.
• generally if you earn wages in another country
  • the other country will tax based the location of the work
  • the US will tax based on citizenship (or perm residence status)
  • if you are in the other country for something like 330 days out any 12 months including any day in the tax year (I think) you can claim the foreign earned-income exclusion. That will remove the income from your US taxes (but your marginal rate will not decrease, it is still figured with your phantom income). This is complicated and detailed with various limits and requirements. See https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion and https://www.irs.gov/forms-pubs/about-form-2555
• If you don't qualify for that (or even if you do) there is also the US Foreign Tax Credit. For foreign source income like wages earned in another country you get a credit (much better than a deduction) for taxes (income only not social security or other) paid to a foreign country. Again various limits and conditions apply.  Generally foreign taxes are much higher than US taxes so this will usually wipe out any US tax owned on the foreign income. See https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit
• be careful of your green card status. e.g. be careful not to appear to be abandoning your US permanent residence. If you are going back and forth frequently I don't think that will be a problem. But if you have a place of abode there for long stretches of time just be careful. https://citizenpath.com/lose-permanent-resident-status/
• re: social security there is a "Totalization" Agreement (treaty) with Canada. check if and/or other research for details. It appears that you pay social taxes in whichever country you are physically working, but that you can somehow claim credit in either country for taxes paid to the other country. the devil may be in the details. 
  • https://www.ssa.gov/international/Agreement_Pamphlets/canada.html
  • https://www.ssa.gov/international/Agreement_Texts/canada.html
  • https://cardinalpointwealth.com/2019/04/10/understanding-the-canada-u-s-totalization-agreement/

[Opus 17]

Generally speaking, if you and your wife are green card holders, you are required to file a US tax return to report all your worldwide income and pay income tax on it, no matter where you lived or where you earned the money.  If you also pay foreign income taxes, you are allowed to claim either a deduction or a tax credit on your US tax return for foreign taxes that you pay.

I don’t know anything about Canadian tax law and can’t tell you how you would file in Canada, and whether you would be considered a resident or a non-resident.  You would prepare your Canadian tax return first and pay the tax, in order to know what credit or deduction to apply on your US federal income tax return.

You didn’t mention this, but it is likely that you will be required to file a joint state tax return with your spouse as well. Even if you are living out of the country for the majority of the year, you will still be considered a resident of your state unless you have completely surrendered your state domicile.  Your domicile is essentially your permanent tax home. If your job in Canada is in any way temporary and your spouse still lives in your state and you maintain a home with your spouse in your state, then you haven’t given up your state domicile, no matter how long you are away from the state.

If you are an independent contractor and file a schedule C, that would include self-employment tax, which gives you credits in the Social Security system. However, if you are an employee and you don’t file a schedule C, you will not get credits in the US Social Security system, and there is no legal way to report your income in such a way as to pay the extra tax and get those credits.

The US version of TurboTax can handle a situation where you work partly out of the country. There is a Canadian version of TurboTax but it is a different website and I have never used it.