Which country should the Canadian student file a tax return to?
My daughter is a resident of BC. Canada, she is a second year student of university of British Columbia. On this summer vacation, she became a subcontractor of Southwestern Advantage Company which is American company, she was relocated to Alberta to sell books door-to-door, she rent a basement and buy groceries cooking for herself. She predicts earning $8000 during the 4 months before class start on September.
My questions are:
1. Will she file a tax return to American? (Because she will get the $8000 cheque from the American company, and the company won’t deduct any tax on the cheque.
2. If she needs file a tax return to CRA on the year end, are the rents and groceries count be expenses?
- bw022Lv 76 years agoFavorite Answer
If she is a Canadian or lawful resident of Canada (i.e. has a work permit) then she may be required to file income tax returns in Canada. You must file if you owe taxes or if you are self-employed and earned more than $6,500 a year. If she was working as a contract (the company just sent her cheques without deducting Canadian taxes and did not send her a T4 slip at the end of the year), then she is self-employed and must declare any money as self employment income. If they deducted Canadian taxes, it would be on her pay cheques (listing CPP, EI, federal and provincial tax deductions) and on her T4s.
Self-employed people submit a separate schedule which includes a list of all money received and all expenses related to their business -- gas, mileage, certain meals, a portion of rent (home office), portion of phone bills, etc., etc. Anyone who is a student (self-employed or not) can also deduct certain expenses and living costs (typically a few hundred a month) during the time they were in school.
I wouldn't worry about either of these too much. Canada has a basic personal deduction of $11,800 or so. If you earn less than that... you won't owe any taxes anyway. Some educational expenses can be carried forward to future years, so she may want to include them. CPP amounts are based on income so she will own a small amount on that.
General tax returns were due April 30, self-employed (who don't own money) had until June 15th to file.
Personally, I'd just take all her bank statements, cheques from the company, receipts, etc. to a tax preparation agency. For $50-$75 or so, they'll do it for her. She'll get a copy and can see the things she needs to do next time. Tax preparation services are fully deductible or self-employed people.
If she is a non-Canadian without a work permit... she was not permitted to work in Canada (even for a foreign company). If she is a US citizen, 18 or older, she is required to also file US income taxes each year. As long as she has proof she paid taxes in Canada, there are usually no taxes in the US except on high incomes.
If she is an American citizen (18 or older) she is required by law to remit income tax returns each year.
- Anonymous6 years ago
Thank you, Rob. But I can’t find if the rental expenses are deductible for self-employed on CRA website. I think rental fee should be deductible, because it is 100% for the book sale purpose. She was relocated to another province, far away from home; learn independence, confidence by selling books. the program named “booksales internship for students”. If she doesn’t sale books, she won’t rent a place .so it is deductible, right?
- Anonymous6 years ago
At the company headquarters, we have a Dealer Services department for these students that is there to help with business management areas such as tax questions, accounting, inventory, account activity, etc.
You can reach the company at 1-615-391-2500 or 888-602-7867. Part of the job or your daughter's sales manager is also to help answer business management questions like these as well. They typically cover these questions with students at the end of summer during the checkout process, once their selling season is complete. Give us a call or email if we can help in the meantime: http://southwesternadvantage.com/contactus
- RobLv 76 years ago
she files in Canada not USA as she worked ONLY in Canada.
she needs books on self employment tax issues problems.
see a librarySource(s): employer