Moved to US in Oct. 2005, will file as MFJ. I have the opotion of claiming on US return the Canadian tax on interest. What percentage/amount I shoud claim, since on the Canadian return that I will attach to the American return it will not show the tax on interest itself?
I couldn't find a tax rate for interest on CRA publications/instructions so I tried a scenario on Ufile. For 1000 CAD (that is close to my real number) the difference is 317.01 (31.70%) - I am in the middle bracket - so I would claim this amount (I mean the corrected one based on the real number), but how do I prove it to IRS, in case they will want me to do so?
Thank you!
interest taxed in Canada
Moderator: Mark T Serbinski CA CPA
The correct way to determine any tax pid is not the way you are doing it.
You must divide your TOTAL tax by your total income ,and then use this figure as your 'tax rate'.
If you made $50,000 including $1000 interst, then your tax on interst would be 2% of whatever your final tax was calculated to be.
You must divide your TOTAL tax by your total income ,and then use this figure as your 'tax rate'.
If you made $50,000 including $1000 interst, then your tax on interst would be 2% of whatever your final tax was calculated to be.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 