QUESTION:
What are the "pains" of taxation for a Canadian citizen who works in the
United States (lives in Canada) and contributes to a 401K -vs- the employer
giving the employee a 'bonus' to deposit into the Canadian Pension Plan
Thanks so much
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david ingram replies:
Do not join the 401(K). The Canadian CRA does NOT recognize the deduction
and you pay tax in Canada now anyway. Then when you cash it in years from
now, you have to pay tax to the US on money you never got to deduct.
Have the employer bonus you for the amount he, she or it would put into
the 401(K).
Then you have the choice of buying an RRSP or paying down your mortgage. I
recommend paying down your mortgage.
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