Moving to Canada from USA

Hi David, I ran across a posting of yours on the Internet about tax situations in the U.S. versus Canada. I was wondering if you could help me out...
I work from home for a company in Dallas. I want to move to Toronto and live (maybe eventually become a citizen) in Canada. If I move to Toronto, how does my company in Dallas handle payroll? Do I still pay Federal U.S. taxes, but no state or local? What about paying taxes in Ontario and Canada? How is that handled? Any information is greatly appreciated. You can call me or just email me if you have time...

Thanks so much for your time... you seem to be the most knowledgeable person I've come across on the Internet regarding these issues!


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david ingram replies:

I will answer this as an email for the newsletter and will not charge for this. If i phoned, I would charge $400.00 Cdn.

And, indeed, if you were living in Dallas, I would have you talk to Gary Gauvin, my old partner who has an office there but I know Cleveland well and stayed in Columbus for a while and was in Cleveland in 1998.

Your first problem is getting into Canada unless you happen to be a Canadian citizen because your mother or father was or you were born here for some reason or other.

If not, you can come to Caanda under our point system (similar to the one which the US just rejected) or you havce to marry a Canadian or you have to get a Canadian job and be sponsored for a working visa by the Canadian company.

http://www.cic.gc.ca/english/skilled/assess/index.html
This is the self-assessment test for an individual to determine his or her
eligibility to immigrate to Canada without being sponsored by a spouse.

If you do not get 67 points on the self-assessment or find a Canadian job you will need to find a Canadian to marry.

When and after you get here, the easiest way for the Ameircan company to pay you is on a 1099 basis.

You will not owe 'any' US Federal taxes under normal circumstances because the foreign tax credits and/or an earned inocome exemption will knock out US taxes.

You WILL have to pay Canadian CPP (like FICA) and Ontario and Federal Income taxes.

GOTO www.centa.com and read the Oct 1995 newsletter (top left hand box) and the US / Canada Taxation section (second box down on right hand side) for 40 pages of information. You can also read the Oct 1993 newsletter for info about dual citizenship.

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