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You may get this twice --- if so, just delete.
Please note my new temporary email address is "taxman@centa.com
theemail:
XXXXX@nyc.com
My question is: Applicable to both US and Canada QUESTION: I am a Canadian Citizen residing in New York for the past two years on TN status. I have been paying my taxes here (33% of my annual salary). I want to sponsor my parents to Canada. I have been told I would have to file taxes on 28000 canadian dollars in Canada to be eligible to sponsor them. Can the taxes that i pay here not account for this. I donot want to pay taxes in two countries. Please help, as I really do need to sponsor my parents urgently
INGRAM replies
You cannot just pay tax to Canada on $28,000.
If you want to be treated as a
Factual Resident of Canada which you can do on a TN visa, then you have to
report all your US income to Canada.
Therefore, as an example, if
you earned $60,000 US, you have to report it to Canada in Canadian Dollars of
(2001 rates which is one of the years you have to file) of 92,904.98
Canadian and would owe tax to Canada on the whole $92,905.
The Canadian and BC tax on
$92905 is $28,418.16.
The relevant taxes you would
pay on $60,000 as a resident of New York City would be about $3,720 FICA,
$870 Medicare, $11,077.00 Federal and $3,201 for New York State.
Depending on where you live in
NYC, there may be a Borough tax of another $150.00 or so.
However, the ones I know
of total $18,868.00 US and convert to $29,215.52 in Canadian Dollars.
When plugged into the Foreign
tax formula, you would owe no tax to Canada because the tax to the US is MORE
than the Canadian Tax.
So, the answer is, you can work
in New York and file in Canada as well.
That is what we do here for a
living and we would be happy to help you out with the back filing for 2000 and
2001.
I have assumed in the above
exampe that you are single. If you were married and filing a joint US
return, the federal tax would only be $7,172 and the New York State taxes would
be $2,400.
In this case, you would owe
Canada about $7,500 because the foreign tax credit would not be as big.
The reason for the difference
is that the income has been split in half and taxed at a lower rate plus there
is a larger standard deduction and another personal US exemption.
And the income is all in one
name.
If you and your wife earned
$30,000 US each ($60,000 total) and we had to do the Canadian returns for
$30,000 each, the Canadian Tax would now only be $10,506.00 each and the
foreign tax credits for tax paid to the US would be enough to wipe out the tax.
In other words, it is the
ability to file a joint tax return in the US which makes the US rate lower for
many people.
A TN visa holder accompanied by
a spouse who is not working looks at his or her taxes and compares it to his
single rate in Canada and thinks he has died and gone to heaven. If both
spouses are working in the US and make about equal income, the tax gap between
Canada and the US narrows dramatically.
the only extra deduction that
an American really gets is property taxes. I do not count mortgage
interest because any Canadian who wants to take the time, can rearrange hjis or
her affairs to make their Canadian Mortgage deductible.
In addition, the US makes you
spend 7.5% of your net income on medical before you can deduct medical and
Union dues and other things are only deductible when they exceed 2%. therefore
a person with a US income of $100,000 only gets a $500 deduction for $8,000
worth of medical bills and $100 deduction for $2,100 of Union or
professional dues.
In addition, to claim the
itemized deductions in the US, one has to give up their Standard deduction
which for a senior couple can be $8,000.
Canadians have to realize that
they cannot apply for a visa to go and work in the USA except in very
exceptional circumstances. A US employer must provide the letters and
paperwork for the visa.
This seminar will tell you how
to stay out of trouble if you or your spouse are already working in the US and
I could not explain it any better than to include another question I received
this morning.
To set the scene, Mother and
Father are BOTH workin gin the US with professional visas. However, they
do not have Green Cards which means that their 18 year old son cannot work.
He chose to return to Canada to
get a job and borrowed his mother's car. When he arrived at the Canadian
border, they told him (correctly) that if he was coming back to live in Canda,
he could not bring the car into Canada without paying duty and turned him
around.
He, being 18 and full of beans,
then tried to get across at another border where they confiscated the car.
Mother managed to get it back by paying $1,800 worth of GST and BC PST.
Now, she has to import it and the US Governemtn will not let her export the
car. Hence, the email I am adding in here.
I do not know "for sure" the
answers here. What is silly is that they have a car they took down from
Canada and he could have just driven it home. (If only they had asked
first).
If anyone has had a similar
situation and knows the answer, please send it back to me. Otherwise, I
will be calling Gail Stewart of Customs on Monday.
Here is the question - Do you
have the answer?
Hello Mr. Ingram,
I have a problems to import a car to Canada.
The car is on my name and my son wants to drive it in Canada.
I told you that I paid $1800 (25%) import tax
because of my son's mistake. This car needs to be return to US because it has
2 recalls ( modifications), what have to be done here in US, before the
technical inspection in Canada. My son turned back in US to do this and they
stopped him on the US border. They told him that he first has to export the
car from US and after import it to Canada. There were 6 requirements for this.
We don't have 2 of them: no title and we have a loan of the car. The US
officer wrote on the Canadian vehicle import form K-22 that export denied and
the reasons for this. This means that my son cannot enter Canada with this car
again. I need minimum 6 weeks to have these documents. It will be absolutely
not possible to have them as Canada customs requires ( about 45 days, 2 weeks
already left). There are two options:
1.Can we stop the importation of this car and
take back $1800 as board tax from Canadian customs, because of US document. (
I have another car what my son can take it and import to Canada and I have a
title for it)
2.If we can not take the money back, can we
extended this 45 days period to register the car in Canada.
I'll be very appreciate if you answer me
tomorrow, because I'll try to import another my car on Sunday. My son has to
turn back to work on Monday but he can use a bus for this.
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