My husband and I have been offered employment in Ontario. We are very concerned about the tax implications. While the offered income is greater than what we are currently making in the US, we've heard that we will actually lose money at the bottom line due to taxation across both countries.
If all of my income is made in Canada, will I be exempt from US taxes?
And, if all of my income is made in Canada, I have been told that that at the end of the year, the actual net income difference will only vary by about 1% from what it would have been had worked only in the US with comparable earnings.
We've also been told that you cannot input money into US Social Security system and cannot participate in a 401K plan.
Can you advise us with answers to these questions?
What
Husband and Wife Team being offered employment in Ontario...
Moderator: Mark T Serbinski CA CPA
The taxrate in Ontario is comparable to Michigan for example. As a resident of anothr country you would be eligible for the foreign earned income exclusion and/or the foreign tax credit. The result should be no extra taxes in US.
As for SS, as Cn employees (unless you are being transferred to a sisiter canada for less that five years) you will be paying into the Cdn SS system, not the US one.
Cdn companies don't offer 401(k), they offer other types of pensions, and there is RRSP (the equivalent of IRA but witgh larger maximums. These are sheltered from tax in both US and canada.
As for SS, as Cn employees (unless you are being transferred to a sisiter canada for less that five years) you will be paying into the Cdn SS system, not the US one.
Cdn companies don't offer 401(k), they offer other types of pensions, and there is RRSP (the equivalent of IRA but witgh larger maximums. These are sheltered from tax in both US and canada.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best