Taxes and deductions when contracting for a US company
My spouse has been offered an IT job for a US company. They require that he get a business number and work as an independent contractor. I do the taxes and accounting in our family so I want to make sure that I have a clear understanding of how to go about this. So far my understanding is that to do this properly he will need to register as a sole proprietorship. At the end of the year he will receive a W2 and be required to pay income tax based on this. During the year we should be putting aside the projected income tax amount and twice the normal CPP deduction because my understanding is that he will have to pay as both an employee and an employer. EI doesn’t seem worth paying into since it will only cover parental leave and illness and we are not planing on more children / have other arrangements if sick leave is required.
Am I missing anything here or is there a way that I can streamline this?
He will be getting payed in US funds so do I have to calculate conversion rates each time he is paid or only at the end of the year?
Can both income tax and CPP be paid when doing income taxes or should I set this up to be done on an ongoing or quarterly basis?
Any tips and tricks would be much appreciated.
Am I missing anything here or is there a way that I can streamline this?
He will be getting payed in US funds so do I have to calculate conversion rates each time he is paid or only at the end of the year?
Can both income tax and CPP be paid when doing income taxes or should I set this up to be done on an ongoing or quarterly basis?
Any tips and tricks would be much appreciated.