Legal Considerations for Startups in the USA and Canada

According to Treasury Regulation Section 1.6012-2(a) and Section 11(b), every company in the world files a return and pays tax on its taxable income at a rate of 21%. This is how A C reports its global taxable income in the US. Note: Section 250(a)(1)(A) says that the C may have a lower tax rate on the part of its income that comes from non-US clients.Additionally, Section 6038A says that a C owned by a non-US person must file important Treasury information reports every year. This report is sent with the 1120 business tax return for our clients. As stated in subsection (d), if you don't file the information report or file it incompletely, you could be fined $25,000.

Based on what I've read, I think the C has service income. And Treasury sends money from service fees to the place where the company actually does the work

You work from Europe to provide these services for the C, so the C has income from a foreign source (Section 862(a)(3)).The letter C stands for a US tax resident because it is a domestic company, which means it was formed in a US state (Section 7701(a)(4)). However, a lot of European countries see a foreign company (US-based) that is run (effectively controlled) from their own country as a tax resident.Due to this matter, you most likely have a dual resident company, which means that it is tax resident in both the US and the European country where you run the C.In and of itself, this fact is not a big deal, but it could become a big deal if you don't handle your taxes properly. Because the C makes money in the country where you do business. That European country also wants you to file a foreign tax return and pay taxes on the C's taxable income from work that the C does in that country.They are not taxed twice, though, for the C. By taking a tax credit on their return, Section 901 restricted by Section 904 lets the C lower the taxes they pay on their foreign source income.

There might be problems if the C only filed in the US and not in the European country

So, if the three years haven't passed, the C would have to file a new tax return to receive the foreign tax credit. If not, C would have to pay tax twice on the same income.You make a T-4 for yourself and send it in at the end of the year. You put the slip under "income earned" on your tax return.You need to make a tax report for your business too. In that case, your salary is tax-free, and you can also subtract all of your costs. If you make money, you can take it out as a "Shareholder's dividend" the following year. Take it easy here, though. You can't give out a huge "shareholder's dividend" because you didn't pay yourself enough. You must balance this well, or you will be checked.No, you usually wouldn't have to tell any US government agency about any income you make. Do not make an IRS account. They tend to chase you for the rest of your life.Even if the boss makes you, don't do it. You shouldn't work for them; you should just be an adviser. They should NOT be able to reduce any US income tax. NEVER. You don't live or work in the USA.

If you live in Canada and are listed as an employee in the US, it won't help you in any way

They'll go "bonkers" with worry before someone tells them the truth about your situation, I know. (Been there, fought that, for a very long time.)People who have a "specialty occupation" can get this type of visa, which is very popular, and can be used for full day or part day work. If you need skilled skills to do your job, you have a specialty occupation. You should have at least a bachelor's degree or work experience that is related to the job. The process can also be hard to understand, and you may need a lawyer to help you through it.A person who works as an accountant, computer researcher, web programmer, web designer, or engineer can get an H-1B visa. Every year, the U.S. Congress gives out 65,000 H-1B visas to workers in certain fields who have job offers from U.S. businesses or groups.Also, 20,000 H-1B visas are available for people with higher degrees like Ph.D., M.D., J.D. If you are a Canadian and have a college degree in medicine, law, or another field, you might be able to get one of the 20,000 H-1B visas. This helps you because you won't have to compete with all the other people who want one of the 65,000 cards.With an H-1B visa, you can work in the U.S. if you are a fashion model from Canada. However, you do need to show "distinguished merit or ability" in order to become a fashion model. You do not need a bachelor's degree. To be considered, you must be well-known across the country or the world and have accomplished a lot in the fashion modeling business.If you are a Canadian business owner in the U.S. and have a bachelor's degree or better in a specific field, you can file for an H-1B visa on your own. If a Canadian with a law degree starts a specialty law business in the U.S., she can then apply for an H-1B and work as a lawyer at her own firm.