Question by : Can I file for taxes in the States for my American home-based business conducted in Canada?
I live in Canada, but am not a resident or citizen yet. My home-based business is American, but I conduct it in Canada. Can I file for taxes in the States, even though I don’t live there anymore?
Answer by Bash Limpbutt’s Oozing Cyst©
Are you a US citizen or lawful permanent resident (Green Card holder) of the US? If so you are REQUIRED to file a US return and possibly pay US income taxes. You will pay US self-employment taxes of roughly 14.1% of the net profit. You may be able to exclude up to $ 91,400 from income taxes if you meet the bona-fide foreign residence test for the entire year or the substantial presence test (330 days out of a full year), or you can claim a credit for the Canadian income taxes paid.
If you are not a US citizen or resident you would not pay US income taxes unless you were physically present in the US to run your business or created a US entity (corporation or LLC) that would be subject to US taxation.
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