US citizen in the US working remotely for Canadian company

[Marsillius]

Hi. I was curious how it worked out for you to work remotely in the US for a Canadian company as a US citizen. Did your employer end up considering you self-employed? Did they stop withholding Canadian taxes and start withholding US taxes? Or something else? I'm considering a similar situation myself.

Thanks

[rememberstarfox]

So here's what I ended up doing:

1. Form an LLC
2. Have the Canadian company pay the LLC as a direct funds transfer
3. LLC pays me (you can use a payroll company if you have multiple people or pay yourself)
4. Canadian company can concern themselves with their taxes
5. I concern myself with LLC taxes

Hope that helps 🙂

[MYanni11]

I too have this same question but haven't seen a response.  

[AliciaP1]

You've posted on an older thread - can you clarify your specific question?

@MYanni11

[pk]

@MYanni11 , agreeing with @AliciaP1 , it would be very nice ( and clean ) if you could start a new thread .

But in the meantime and in general:

1. IRS generally requiring sourcing of income to the place of work -- thus if you are living in California   and working remotely  for a company in Germany, then the income for IRS purposes is not foreign but sourced to California --- Federal and State.

2. To achieve  (a) domestic sourced income    and    (b) pay FICA /SECA -- Social Security & Medicare taxes at 15.3%,  you file as Self-Employed --- Schedule C and Schedule-SE.   TurboTax will do all this for you once you tell it that you have Self-Employed income.

3. Additionally is the foreign entity withholds taxes on the income i.e. you pay foreign taxes , you can file form 1116 for foreign tax credit  or if you itemize claim these taxes as part of State & Local taxes  ( note that this is limited to US$10,000  -- SALT limit).

Does this help ?  If you need more help , please consider starting a new thread

pk