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Old 07-12-2007, 10:06 PM
 
Location: Marietta, GA
323 posts, read 940,131 times
Reputation: 259

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Hi everyone,

With any luck, tomorrow I will be making arrangements to fly out to Toronto fairly soon and get a job offer from a company there. I can live with the currency exchange rate issue to a degree, as most of my money WILL be spent in Canada (rent, utilities, food, gas, etc.) What concerns me though is what I will be paying in taxes.

I've made a few attempts at reading the U.S. Gov. IRS site to try and understand how it works, but within 5 mins. my eyeballs roll backward into my head and I want to go crazy! So far I've summarized this:

- I will be given a tax credit on my U.S. Taxes for what I pay in Canadian taxes.

- Accordingly, I could pay my U.S. taxes on an extended deadline once my Canadian taxes are completed so this credit is reflected accurately when I file US taxes.

What I still have questions on is:

- Is there any tax break on U.S. Taxes because I'm not using all services in the U.S.? i.e., "the paving of roads, the education system, etc."?

- Do I get any "tax breaks" for services I am not eligible for? Ex. lower CA tax rate because as a non-citizen I could not receive welfare?

- Will I still be paying into U.S. Social Security and Medicare taxes while I am in CA as a Permanent Resident? I'd like to know if I will get credit for Soc. Security at least!

- If I am paying into Soc. Security and Medicare, will my employer collect it from me and submit it to the U.S. Gov?

Finally, if ANYONE is a U.S. Citizen working in Windsor or Toronto please IM me your accountant's info! I'd really like to speak to a knowledgeable accountant before I take the offer so I can see what all will be involved. I'm optimistic that I will be made a fair offer, but I'm 3 years out of college not a seasoned veteran in my field, so I get the feeling that I'll need to keep close tabs on how much taxes will effect me.
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Old 08-25-2008, 04:14 PM
 
Location: Maui & Vancouver
21 posts, read 157,381 times
Reputation: 26
It's been a year since you've posted. How's it going? I'm an American looking into working in Canada. The US govt isn't real helpful. They want our $.

My investigations with working in Canada & US taxes say that if you live/work in Canada you get an $84,700/annual US tax break, plus moving expenses of $6000 that can be amortized over 2 years.

Yes, you will be taxed in the US, it's called a world tax. You'll also be paying taxes in Canada to cover Canadian infrastructure (and your health care here), and will get a break for paying taxes here on your US taxes in the form of either a tax credit or a tax break.

If you've found an accountant who understands both Canadian & American taxes, and how to sort them out, please pass on their info to me.

Thanks much & good luck,

Michelle
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Old 06-17-2010, 11:59 PM
 
Location: Marietta, GA
323 posts, read 940,131 times
Reputation: 259
Well I'm back at this again. I am talking to a company from Calgary instead now and I have the same general concerns as I did before. I didn't get quite as far as to talk to an accountant last time around because the Toronto company's business plan changed and they decided not to extend me a formal offer.
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Old 06-18-2010, 12:28 AM
 
1,863 posts, read 5,148,676 times
Reputation: 1282
Quote:
Originally Posted by Further North View Post
Well I'm back at this again. I am talking to a company from Calgary instead now and I have the same general concerns as I did before. I didn't get quite as far as to talk to an accountant last time around because the Toronto company's business plan changed and they decided not to extend me a formal offer.
You will not pay income taxes to the US. You'll pay taxes to Canada only and receive tax credit in the US for taxes paid to Canada. Because Canada has higher tax rate than the US, you will get full tax credit in the US for taxes paid to Canada, so no taxes due to the US. In addition, you can exclude first almost $100,000 ($91,400 for 2009) of your foreign EARNED income by filing the form 2555. Please note that I'm talking about EARNED income (income as an employee or self-employment income, in case you're self-employed in Canada).

Further, you'll be covered under Canadian social security system and will pay social security taxes in Canada. You will be exempt from the social security taxes in the US.

You'll have to file US tax returns, though. The deadline for US expatriates to file US tax returns is June 15. This date can further be extended to October 15 by filing extension form. You'll also have to report your foreign bank accounts with highest balances reached in every account in a given calendar year by filing form 90-22.1. This form is filed just for reporting purposes.

Don't listen to anybody who says you'll have to pay INCOME taxes to both Canada and the US.
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Old 06-18-2010, 01:00 AM
 
Location: Marietta, GA
323 posts, read 940,131 times
Reputation: 259
Quote:
Originally Posted by movingwiththewind View Post
You will not pay income taxes to the US. You'll pay taxes to Canada only and receive tax credit in the US for taxes paid to Canada. Because Canada has higher tax rate than the US, you will get full tax credit in the US for taxes paid to Canada, so no taxes due to the US. In addition, you can exclude first almost $100,000 ($91,400 for 2009) of your foreign EARNED income by filing the form 2555. Please note that I'm talking about EARNED income (income as an employee or self-employment income, in case you're self-employed in Canada).

Further, you'll be covered under Canadian social security system and will pay social security taxes in Canada. You will be exempt from the social security taxes in the US.

You'll have to file US tax returns, though. The deadline for US expatriates to file US tax returns is June 15. This date can further be extended to October 15 by filing extension form. You'll also have to report your foreign bank accounts with highest balances reached in every account in a given calendar year by filing form 90-22.1. This form is filed just for reporting purposes.

Don't listen to anybody who says you'll have to pay INCOME taxes to both Canada and the US.
Thank you so much for this info!

I do have one more question that this brings up though.

What happens to my Social Security contributions balance?

Does it esssentially become "suspended" until I return to the US if I am only in Canada on a work permit?

I honestly see myself working in Calgary for 3-5 years, I don't anticipate this being a permanent move.
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Old 06-18-2010, 01:09 AM
 
1,863 posts, read 5,148,676 times
Reputation: 1282
Quote:
Originally Posted by Further North View Post
Thank you so much for this info!

I do have one more question that this brings up though.

What happens to my Social Security contributions balance?

Does it esssentially become "suspended" until I return to the US if I am only in Canada on a work permit?

I honestly see myself working in Calgary for 3-5 years, I don't anticipate this being a permanent move.
Try this. I didn't read it yet, though. I just googled it. Let me know if it was helpful.

Description of the U.S.-Canadian Social Security Agreement

The info regarding income taxes I gave you before was not googled, though. I know it firsthand.
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Old 06-18-2010, 01:24 AM
 
Location: Marietta, GA
323 posts, read 940,131 times
Reputation: 259
Quote:
Originally Posted by movingwiththewind View Post
Try this. I didn't read it yet, though. I just googled it. Let me know if it was helpful.

Description of the U.S.-Canadian Social Security Agreement

The info regarding income taxes I gave you before was not googled, though. I know it firsthand.
Yes that seems to clear it up pretty well.

Are you currently working in Vancouver?

If you have a particular account doing taxes for you could you PM me their info?

If this job does become a reality I'd really like to talk to an accountant before I accept any offer. I'm sure there's many more accountants in WA. dealing with taxes for US citizens in Vancouver then there are US accountants in Montana dealing with Alberta!
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Old 06-18-2010, 08:25 AM
 
Location: Hougary, Texberta
9,019 posts, read 14,285,161 times
Reputation: 11032
With the large US expat population in Calgary, there are likely tons of accountants on the ground there that can help you out.
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Old 04-19-2017, 10:58 AM
 
3 posts, read 5,730 times
Reputation: 10
Default Income Taxes - US Aerospace Contractor Working in Canada

Hello all-

I anticipate being a non-resident worker (in Canada) for at least 8 months
while maintaining my permanent household in Texas. I will be a contractor
paid in Canadian Dollars.

I am wondering if the tax hardship, potentially incurred, far outweighs the
fairly, decent-paying contract.

Will I have to file a Canadian and a US return? I am thinking, yes.
If I file a Canadian return, will I pay both a federal and a provincial income tax? I am thinking, yes.
I am also assuming that I will pay Canadian Social Security.

On my US return, I am looking at utilizing the FEIE
(Foreign Earned Income Exemption) on the first $102,100 USD
and the FTC (Foreign Tax Credit) on any income over the $102K amount.

My anticipated wages for one year would be approximately
in the $130,000-$150,000 (CDN) range.

I am doing a very rough guesstimate of my overall scenario
to try and wrap my feeble brain around this.

My GUESSTIMATE:
Canadian Taxes
Assuming $150,000 (CDN) earned and taxed by CRA at
approximately 47% (Federal & Quebec Provincial tax combined)
equals $70,500. So take-home is $79,500 (CDN).

US TAXES
In US dollars, I've earned about $111,470 (take-home $59,079).
Now using my FEIE US tax credit (2017- $102,100 US),
I pay no additional taxes on the first $102,100.
On the remainder: $9,370 ($111,470 minus $102,100), I take the Foreign Tax Credit.

So, I will pay no US tax and accrue credit that carries over on the tax for $9,370? Is this correct?

Any information will be appreciated .
Am I generally close? Or am I way off the mark?

Thanks very much in advance to all who reply!
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Old 04-19-2017, 11:26 AM
 
Location: Hougary, Texberta
9,019 posts, read 14,285,161 times
Reputation: 11032
You're close.


The US just wants to ensure that you paid someone. There are tax treaties between the countries, so it's pretty straight forward. It's just that if you don't pay, then the IRS has their hand out.
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