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401(K)
Sent: Wednesday, December 21, 2005 4:59 AM
To: taxman at centa.com
Subject: Joint taxes
David,
I recently married a girl from Maryland. I am a Canadian citizen
but have no property in Canada just a Bank account - OHIP - car
registration and Canada Pension ( I am 65)
My wife is five years younger and has a very good job.
We have been advised we have to file a joint tax return.
Does this mean my only source of income - my pension - is taxed
in Canada and then added to her income to be taxed again at a
really high rate in US ?
OR do they effectively add our incomes together and then average
them between two people so it lowers the rate she pays?
Is it worth me keeping Canadian citizenship and pension if the
former is the case?
How do they calculate the exchange rate as my pension is paid
monthly throughout the year?
Many thanks for your great source of info
---------------------------------------------------------------
david ingram replies:
If you are a resident of the US, your OHIP is no longer valid. If
you are living in the US, your Ontario car registration is no
longer valid either.
If you are living in Canada and married to an American, you are
still taxable as ever but have to include your wife's salary and
that will stop a claim for any renter's credit or GST credit you
have been receiving. However you can file a joint US return with
your wife and save significant US taxes.
If you are a resident of the United States, your Canada Pension
and OAS are no longer taxable in Canada.
They ARE taxable in the USA but are treated as Social Security.
Depending upon the family income, they may not be taxable. If
the income is high enough, the CPP and OAS will be taxable on a
sliding scale up to 85% worth. that does NOT mean the tax is
85%.
What it means is that you would pay tax at standard rates on a
maximum of 85% of the CPP or OAS.
Filing a joint return will definitely save your spouse money and
not cost you any more tax than you would pay in Canada.
You might want to send this first return off to us in North
Vancouver.
------------------
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
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Calls welcomed from 10 AM to 10 PM 7 days a week (please do not
fax or phone outside of those hours as this is a home office)
email to taxman at centa.com
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed
information or consultation and is to be regarded only as general
comment. Nothing in this message is or should be construed as
advice in any particular circumstances. No contract exists
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duties are expressly denied. All readers should obtain formal
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