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My question is: Applicable to both US and Canada
QUESTION: I am a US citizen-single, considering migrating to
Canada. I intend living off interest income only. If the
investments were in US and I recd interest in USD -approx 25000.
Can you tell me what would be my approximate Canadian and US tax
liability? I need to figure out if it makes sense to migrate
financially
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David Ingram Replies:
Tax rates have changed so much that it is a very difficult
question to answer. I have used the 2002 rates in my computer
system and have made no attempt to adjust for the new tax bill,
mainly because it will not affect you as much as a married person
with three kids and stock market investments.
Also, I do not know what state you are in.
So - On $25,000, the US Federal Tax is $ 2,299
If you lived in Washington, Florida, Alaska, Texas, Nevada,
Wyoming or South Dakota, there is no State tax, so your bill
would be just $2,299
However, if you lived in different states, state amounts would be
Federal 2299 Total
Canadian dollar equivalent
California 469 2768
3792
New York 787 3086
4227
Arizona 570 2869
3930
Minnesota 966 3265
4473
Georgia 1013 3312
4537
Illinois 690 2989
4094
Massachusetts 1143 3442
4715
Indiana 816 3115
4267
Oregon 1575 3874
5307
Montana 942 3241
4440
Hawaii 1316 3615
4952
Pennsylvania 700 2999
4108
Utah 1062 3361
4604
And now for the Drum roll - Your $25,000 transfers at 1.37 to
$34,250 in Canadian Dollars.
This translates to 4413 Canadian Federal Taxes plus
1675 British Columbia tax in Canadian Dollars for a total of
about 6088 Canadian Dollars which at current exchange rates will
be somewhere around $4,500.00 US.
This Canadian Tax is less than the tax in Georgia, Mass., Oregon,
Hawaii and Utah.
Other Canadian provinces will have different rates. British
Columbia is close to being the lowest tax.
This does not take into account difference in cost of living,
medical premiums, provincial or state sales taxes, etc.
For instance Washington State has no State Income Tax but Oregon
with the High State Income Tax has no state sales tax.
BC has a medical insurance premium plus a 7.5% sales tax.
Alberta with a similar provincial income tax rate has NO medical
premium and NO provincial sales tax.
Property taxes, rents and other services are generally cheaper in
BC (in adjusted dollars) than those same items in California or
New York.
Hope this helps and remember, we do this for a living. By the
way, I enjoyed this question.
david ingram
david ingram - [email protected] <mailto:[email protected]>
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - (604) 913-9123 www.centa.com
<http://www.centa.com>
Cell is (604) 657-8451 (10 AM to 10 PM seven days a week)
US / CANADA / MEXICO
Working Visa and Income Tax Specialists
Be ALERT, the world needs more "lerts"
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