-----Original Message-----
From: David Ingram [mailto:taxman at centa.com]
Sent: Tuesday, February 15, 2005 1:17 AM
To: sarsan at yahoo.com
Subject: RE: US Citizen moving to Canada
QUESTION:
Dear Mr. Ingram:
My wife, two children (6 and 8 years old) and I are US citizens. We took the
online point assessment and scored 72 and thus on paper we qualify for PR in
Canada. Because of the potential benefits of safety, education, health care
and retirement, my wife wants the entire family to move to Canada. Here are
my concerns:
1. Are these benefits real and do they conflict with any of the benefits
that we may receive in the US. Is the cost of obtaining these benefits worth
the cost that we may incur( double taxation? Paying taxes on social security
benefit, higher tax rate???)
2. If we are granted PR status how soon do we have to establish residency?
Can we continue to reside in the US while we look for employment in Canada.
3. Do we get the benefit for both US social security and OSP and do we get
taxed for receiving one or both by US or Canada?
4. If we have income in California will we be liable for taxes in both the
US and Canada?
Thank you
SXXXXXX
--------------------------------
david ingram replies
1. The benefits of living in Canada are great. However, they are not for all
people. It is a different place but it is NOT as different to move to
Vancouver from San Francisco as it would be to move from San Francisco to
the Appalachians or rural Alabama.
2, You have to move to Canada within 2 years and 11 months of getting your
PR card and then stay here for two full years. To maintain a PR card, you
have to live in Canada 2 out of 5 years, a much more humane treatment of
international people than the "green" resident alien status in the USA.
Therefore you can live in the US for a good 2 1/2 years while you wait for
employment in Canada.
3. You will collect both Social Security and OAS and CPP if you work in
Canada. All three pensions will be pro-rated by years of input and amounts
of income. If your income is less than $32,000 US (2005 rules), you will pay
tax on 85% of your Social Security in Canada while you do not have to pay
tax on Social Security until your income passes $32,000 or so in the USA.
4. As US citizens you are taxable on your world income no matter where you
live. Therefore you will be filing a US tax return even if you become a
Canadian Citizen unless you renounce your US citizenship. Depending on the
amount and type of income you may pay tax in the states first and then
calculate it again in Canada. Canada would usually allow you a credit for
all the tax you paid to the US. This credit is deducted from the Canadian
tax calculated on (usually) a dollar for dollar basis.
Sometimes there is a little double taxation. It may be necessary to move
investments into Canada.
What you should do is get us (or someone who can do it) to prepare a
pro-forma return based upon your expected income and type of income. This
will give you an idea of what to expect. For instance, although we can make
mortgage interest deductible in Canada with the proper planning, it is not
standard and automatic.
However, we give better moving expense deductions (except into Canada from
another country), union dues, medical expenses and another dozen deductions
and exemptions.
Hope this helps and remember
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth
Management and I, David Ingram host a LIVE talk show called "ITS YOUR
MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Local calls are taken at (604) 280-0600 and Long Distance calls are taken at
1( 866) 778-0600
Callers to the show are invited to attend free seminars on financial
planning with such specialities as deductible mortgage interest. They are
held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604) 731-8900
for more information.
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 Fax (604) 980-0325
Email to taxman at centa.com <mailto:taxman at centa.com>
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<http://www.david-ingram.com/>
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