Canadian tax discussion

johninajijic wrote:Could awana be another susan?. Haven't heard from susan lately.

Could be one of those Canadians paying 56% income tax, that your imaginary friend told you about john.

Talk about being naive.

arbon wrote:

johninajijic wrote:Could awana be another susan?. Haven't heard from susan lately.

Could be one of those Canadians paying 56% income tax, that your imaginary friend told you about john.

Talk about being naive.

arbon - I don't have imaginary friends, maybe you do. Since you know nothing about Canadian income tax, if you make millions of $$$ a year there, which you never have, you could be paying more than that. When my friend returns in a few weeks I will ask him his tax bracket and let you know for sure.

John, if that's the same guy that gave you the "Vancouver" info you may want to take a pass.

In Canada we pay Federal Tax and Provincial tax. The federal tax scale remains the same for everyone however the provincial tax scale is different in every province.

The highest rate for Federal tax is 29%
The highest rate for Provincial tax is 21% (in Nova Scotia) The other provinces average around 14%.

So the highest overall tax rate in Canada is 50%. We do also have to pay a ton of other sales taxes such as HST, GST, PST and we don't get nearly as many "deductions" as our American friends.

I have to wonder what your total taxes are when you add ALL the others in.

If you earn over 150K per year, I have heard estimates of up to 75% if you live in Nova Scotia and factor in all the other various sales taxes, property taxes, luxury taxes on cars, sin taxes on booze, smokes and fuel, etc., etc., etc.

CanuckBob wrote:If you earn over 150K per year, I have heard estimates of up to 75% if you live in Nova Scotia and factor in all the other various sales taxes, property taxes, luxury taxes on cars, sin taxes on booze, smokes and fuel, etc., etc., etc.

I wouldn't bother answering this, but I just happened to be going thru this

$128,000.00 .... $46,000.00 deducted.... thatz less than 30%.... single income!!

My son's income deductions this year.... he's 25 :)

Of course there's sales tax in everyday spending

But the tax vs income exaggerations I keep hearing from some Yanks is bewildering....

Our tax situation .... even with Medicare.... isn't as severe as you have been led to believe....

But of course.... we aren't at War with Everyone!!

hockables wrote:

CanuckBob wrote:If you earn over 150K per year, I have heard estimates of up to 75% if you live in Nova Scotia and factor in all the other various sales taxes, property taxes, luxury taxes on cars, sin taxes on booze, smokes and fuel, etc., etc., etc.

I wouldn't bother answering this, but I just happened to be going thru this

$128,000.00 .... $46,000.00 deducted.... thatz less than 30%.... single income!!

My son's income deductions this year.... he's 25 :)

Of course there's sales tax in everyday spending

But the tax vs income exaggerations I keep hearing from some Yanks is bewildering....

Our tax situation .... even with Medicare.... isn't as severe as you have been led to believe....

But of course.... we aren't at War with Everyone!!

Hocks, that is 35.9% and you live in Saskatchewan where the highest provincial tax rate is 15% not 21% like Nova Scotia. Also in Saskatchewan you are not paying the same level of HST, fuel tax/road tax, provincial tax on liquor, smokes, etc. etc. as in many other provinces. The government has to find a way to lure people to live in Saskatchewan.........hahaha.

My example was stating the worst case scenario in the highest taxed province.

There did used to be a surtax, some years back which could bump one up into the 55% range. Presumably this has been dropped.

As for other taxes, number one son's estimate was about 75% in total taxes paid.

As someone who has lived and worked in both countries, I can say that financially, I was better off paying the higher taxes in Canada. Americans are nickeled and dimed for every little thing. And when you include the outrageous cost of Health insurance in the US, Canada comes out ahead even with all of the taxes.

mrum wrote:As someone who has lived and worked in both countries, I can say that financially, I was better off paying the higher taxes in Canada. Americans are nickeled and dimed for every little thing. And when you include the outrageous cost of Health insurance in the US, Canada comes out ahead even with all of the taxes.

A couple of things you didn't figure is in Canada, you pay higher taxes to get free medical AND your cost of living in Canada is much, much higher than in the US, groceries, houses. etc.

If you are an employee of a company, the company pays your health insurance and you pay a portion, not so high. Obviously, if you are self employed, you pay the whole tab. I was paying $ 400. a month 10 years ago as a self employed person for a good plan.

I would have to say that if you are over 65, the US is cheaper on taxes and health insurance. You pay $ 0 for Medicare. Part B is $ 99. a month. Then you need an MAPD (Medicare Advantage Prescription Drug) plan which you can get for $ 0 monthly premium up to $ 100 a month. There's no difference between the $ 0 premium and $ 100. premium plans. So, for $ 1,200. a year, you can have full medical coverage, except for some minor deductibles.

johninajijic wrote:

arbon wrote:Canadian INCOME TAX.

"Could be one of those Canadians paying 56% income tax, that your imaginary friend told you about john."

arbon - Are you Canadian? Like I said I will post the actual percentage of INCOME taxes for the Province of Ontario, after my friend arrives on March 31. He is in the "highest" bracket available in Canada. And you jerk, he's not imaginary.

John, the absolute highest income tax rate in Ontario is 40.16% (29% Federal & 11.16% provincial). He may be in the highest bracket in Ontario but not Canada. As I already pointed out Nova Scotia has a rate of 50% (29% Federal & 21% provincial). If your friend tries to tell you otherwise you can tell him he is full of BS and direct him to this site:

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

The 15%, 22%, 29% Federal tax rate is from the TAXABLE INCOME not the TOTAL INCOME.

line 260 right?

Yes, that is after personal exemptions and deductions.

Comparing U.S. taxes with anything is pretty meaningless these days since the country is borrowing 40 percent of its budget. In other words, the "taxes" on the borrowed money are taxes being put on the unborn.

Shortly, the U.S. will reach the former Greek levels as far as debt to GNP is concerned. The Greek solution was to renege on 70 percent of the money owed. I expect that solution to become real popular in places like Portugal, Spain, Italy, and later, the U.S.

Permit me a small Segway on this convenient topic.

Are there any Canadians out there who have declared themselves non residents of Canada for income tax purposes? If so could I get the benefit of their experience through PMs or on this forum?

I’ve enquired and recently received an assessment from the CRA (Canada Revenue Agency, the IRS equivalent) that I qualify for non resident taxation status.

For some reason I’m a little confused and intimidated by the 12 separate web entries (one a 70 page explanation of implications) and 5 multi-page PDF forms that the CRA gleefully directs me to for specific information.

I have a simple tax situation – pensions and a stock portfolio and have always prepared my own tax returns. Thus I don’t have the services of a tax accountant or advisor.

Can anyone help based on their experience?

Many thanks
SunFan

We have been (offically) non-residents of Canada since '97...have an official letter from the Canadian Government stating that fact for each of us.
Our portfolio is with TD Waterhouse and a flat income tax of 15% is deducted on interest and dividends at their end and they submit. On our CPP and OAS, the government deducts a flat 15% as well.
At the end of the year, we receive statements from each of TD Waterhouse, OAS and CPP stating total "income" and how much tax was deducted...therefore, we file no returns but just keep and file the info.
That is OUR experience because our tax situation is fairly simple. YOURS may not be and you really should get the advice of a tax specialist that will better understand YOUR situation and what works best for YOU.

On TOB, a good website was posted by Ajijic and I replied to it...
http://www.chapala.com/webboard/index.php?showtopic=34633

You may find some of the information pertinent.

Ferret:

How did you make it to that discussion when a far more earth shattering discussion about "shoehorns" is drawing plenty of attention?

We followed all of the rules of "Deemed Disposition"when we left to come to the US 10 years ago. There were no problems at all. Kept one bank account, one charge card, and our RRSP accounts. Nothing else. Had the expert advice of Ernst and Young to do the initial tax changeover. Going on to Mexico should be straightforward from the Canadian perspective and a non-issue from the US perspective. But you want to make sure to follow the rues and have good advice from experts.

CheenaGringo wrote:Ferret:

How did you make it to that discussion when a far more earth shattering discussion about "shoehorns" is drawing plenty of attention?

:) Didn't even read the discussion about shoehorns 'cuz I gave up trying to find them in Mexico a while ago. I bought various sizes (lengths of handle) in Canada...end story...except for my hubby's favourite which is held together with a wood splint and duct tape

We will be declaring non-residents of Canada for tax purposes when we move down there at the end of this year. We have disposed of virtually all assets except for RRSPs and a bank account using my son's address in Canada.
We are looking at Section 217 of the Income Tax Act. It states one can, depending on income and after declaring non-resident status, voluntarily file a return every year and pay less than the 15%.
It will be a few years before we receive CPP and, apparently even more years before we receive OAS. We want to find the "sweet spot" in the income/tax equation.
Has anyone there been filing as per Section 217?

The sweet spot is to take your personal exemption out of your RRSP monies every year ($11,500 each) and then top it up with dividend monies from your non-registered investments. After tax credits, dividend monies are virtually tax free. If you do it right you will pay almost ZERO income tax (assuming you can live on under 40K per year). If you withdraw less than 5K at a time from your RRSP's (like monthly) they will only withhold 10% in taxes but you will get it all back when you file your taxes at the end of the year.

It sounds like U have done your homework...

Interest bearing investments inside RRSPs.... dividend income outside...

A good Accountant, is worth every penny!!

hockables wrote:It sounds like U have done your homework...

Interest bearing investments inside RRSPs.... dividend income outside...

A good Accountant, is worth every penny!!

Yep, right on Hocks.

Get a good accountant (for tax advise) and a good money manager (to invest and actively manage your monies)............

Further to SunFan's query (of 2 years ago). My wife and will move from Canada to Ajijic full-time in July 2015. We will have taxable income from RSPs in Canada.
As full-time residents of Mexico, are we obligated to pay Mexican tax on Canadian taxable income?
Does it make a difference whether we keep Canadian tax residency, or declare ourselves non-tax-residents of Canada?
BTW, I think Mexican tax rates are higher than in Canada.