I am resending this old question out again because of an unusual phone call today which asked the same question.
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David
I am an American citizen and my wife is a Dual American/Canadian Citizen.
1.. She wants us to retire to Vancouver Island and I would like to know what our tax position will be.
Our income will be (in US dollars)
My US Social Security will be about $14,000
My Wife's US social Security will be about $7,000
My wife's Canadian CPP and OAS will be about $3,000 US
I have a company pension which will be about $10,000
we should have close to $12,000 US a year from Interest and Dividends $12,000
There is rarely any capital gains
We will therefore have a combined income of about $46,000 US $46,000 US
We live in Mendocino, California now - I am 64 and my wife is 63.
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david ingram replies:
My Canadian readers will not like this answer but here goes:
1. From the figures you have given me, by filing a joint return and taking a standard deduction for you as if you were both 65, your US federal tx would be a mere $553.00 US dollars
2. Your California tax would be Nil, Zero, Nothing
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Canada does not have a joint tax return and the incomes have to be split as follows.
Your income (in Canadian Dollars at the 2003 exchange rate of 1.401462 rate is as follows:
Husband Company pension $10,000 US $14,014.62 Cdn
Social security $14,000 $19620.46 Cdn
less 15% exempt - 2943.07
taxable social secutiry $16677.39 Cdn
Interest $3,000 $ 4204.39
Dividends $3,000 4204.39 Cdn
Total taxable income for Canada equals $39,100.
Total Tax payable in Canada equals $6,934.39 Cdn or about $4,947 US
Wife Canadian Pension plans about 4,204.39
US social Security 85% taxable 8,338.69
Interest $3,000 $ 4,204.39
Dividends $3,000 4,204.39 Cdn
Total Taxable in Canada equals $20,951.87
Total Tax payable in Canada equals about $ 1,824.87 or about $1,302.12 US
In addition, you would have to pay about $1380 BC medical or $984.69 US
For a total of about $7,234.77 US
less the $553 which was owing to the US - 553.01
Extra Tax and Medicare paid to Canada equals about $6,681.77
Of course, quality of life and cost of living also enter the picture.
You are in one of my favourite areas. I would love to retire to Mendicino County and Mendocino itself in particular.
However, the cost of living in Mendicino is likely 25% higher than the cost of living in Vancouver, 50% higher than the cost of living in Sooke, BC and 75% higher (just my guess) than it would be in Port Alberni.
Good luck
david ingram
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