Taxes


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akscanada   
Member since: Jun 07
Posts: 227
Location: GTA, ONTATIO, CANADA

Post ID: #PID Posted on: 13-08-08 11:27:26

If I am working in US, paying taxes at source in US and my Wife is living in Canada, not working,
Do I need to pay taxes in Canada too when I file my return in Canada?

Thanks.



dimple2001   
Member since: Apr 04
Posts: 2873
Location: Western Hemisphere

Post ID: #PID Posted on: 13-08-08 11:53:21

You may have to find out if you are a resident of Canada for tax purposes to determine whether you need to file taxes or not in Canada.

Since you have implied that you are or will file taxes in Canada, whether you actually will owe any money to Canada depends on what your calculations show.

In very simple terms, you calculate your US taxes and Canadian taxes separately. If you owe $10000 in US taxes and $11000 in Cdn taxes, and assuming 1 to 1 exchange rates, you can take a foreign tax credit of $10000 in your Cdn return, thereby, owing $1000 to Canada.

Usually, if you invest in 401k or if the exchange rates are wide between US and Canada or if you don't have deductions available off your RSP, chances are you may owe money to Canada. However, you may be able to take credits/deductions for your non-working spouse and offset whatever you may be be required to pay.


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Dimple2001




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