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New Member
posted May 30, 2020 6:38:29 PM

How should I fill in income if I'm a freelancer that works for companies in the US plus already pay taxes in the US for it?

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1 Replies
Employee Tax Expert
Jun 1, 2020 5:49:55 PM

Foreign business income and foreign tax paid can be complicated. Here are some general items to be considered:

 

If you are a resident of Canada you are taxed by Canada on your world-wide income. Foreign- sourced income must be converted to Canadian dollars at exchange rates prevailing at the time the income was earned. The form for reporting business income is the T2125. Tax withheld on foreign-sourced income presents an issue of double taxation. There is a tax treaty between Canada and the USA to reduce double taxation. There is a deduction on the Canadian T1 return for treaty exempt income on line 25600. There is a federal tax credit for non-treaty exempt foreign business income which is taken on line 40500 of the T1 return. There is also a provincial tax credit. There is a carryover provision for foreign tax paid that cannot be recovered by tax credit in the year it was paid.

 

Unfortunately a more precise answer depends on the details of your situation.