Escaping Canadian Tax - Detroit - Windsor -

Sent: Sunday, February 04, 2007 5:08 AM
To: taxman@centa.com
Subject: US USA / CANADA Income Tax Help - Escaping Canadian Tax

Hello,

I saw an answer you posted in December and gather you are a CAN-US taxation expert.  I will have need of such expertise when I file my 2007 tax return.

I was hoping you could point me in the right direction insofar as my situation is concerned.  I am presently a Canadian, in terms of citizenship and residency.  I have been offered a position in Detroit with an income of ~$100K USD.  I'm also planning on purchasing a house.

I am considering living in Windsor but working in Detroit, to benefit from the additional purchasing power of making US$ and spending CDN$.  However, it occurs to me that with taxation, I may actually be losing big if I do this.

Can you suggest some factors that I should consider and resources I should consult?

Sincerely,
 ---------------------------------------------------------------
david ingram replies:
 
The only way for you to decide is to analyse the cost of the housing, the commute time, the cost of the commute and the after tax dollar you will receive.
 
In general if you are married and your spouse does not work, your tax will be lower in Detroit than Canada because of the joint tax return.
 
On the other hand, if you are single and are paying cash for your house, the difference in your personal income tax will not be big enough to worry about where you are living because of tax.  You will pick amenities and quality of life.  If you are a target shooter with guns, for instance, you will be more comfortable in Detroit.
 
The only way to tell is to prepare pro-forma returns showing the "what if" of both scenarios.
 
In the meantime, goto www.centa.com and read the Nov 2001 Newsletter in the top left hand box to get ideas about how to make your mortgage interest deductible in Canada.
 
Canadian Tax is not necessarily higher than the US anymore.  When you add ALL the taxes including CPP, EI, Medicare and US FICA (Social Security) plus State, Federal, and Provincial taxes, a single person paying rent almost always pays more tax in the US now.
-
------------------------------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office)
 
 
Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
 
Be ALERT,  the world needs more "lerts"
 
 
David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
 
Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada.
 
This is not intended to be definitive but in general I am quoting $800 to $2,400 for a dual country tax return.
 
$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,000 would be the same with one rental
 
$1,200 would be the same with one business no rental
 
$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out
 
$2,400 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.
 
With a Rental for $350
 
A Business for $350 - Rental and business likely $450
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.
 
Just a guideline not etched in stone. 
This from "ask an income trusts tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with:
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