More on this Canadian thing

Canadian citizens and residents are taxed on their worldwide income, to the best of my knowledge. So all of it is taxable. I don't know how they do depreciation. Your Florida property is 27.5 year property in the US, with only the house depreciated, not the land. But in Canada maybe it is 40 year property, or maybe they don't do depreciation at all, etc.

I think not. But the criterion is not whether you have a residence/ house in the US. The criterion is whether you intend to ever return to the state or maintain strong connections with that state. My gut reaction should be to de-register to vote that, terminate your CA driver's license, etc to prove that you truly are not a resident.

Yes.

QUOTE

Before the agreement, employees, employers and self-employed persons could, under certain circumstances, be required to pay Social Security taxes to both the United States and Canada for the same work.

Under the agreement, if you work as an employee in the United States, you normally will be covered by the United States, and you and your employer will pay Social Security taxes only to the United States. If you work as an employee in Canada, you normally will be covered by Canada, and you and your employer will pay Social Security taxes (contributions) only to Canada.

On the other hand, if your employer sends you from one country to work for that employer or an affiliate in the other country for five years or less, you will continue to be covered by your home country and you will be exempt from coverage in the other country. For example, if a U.S. company sends an employee to work for that employer or an affiliate in Canada for no more than five years, the employer and the employee will continue to pay only U.S. Social Security taxes and will not have to pay in Canada. Even if your occupation (such as truck driver or professional athlete) requires you to make frequent short trips from one country to the other over a period of more than five years, each trip can be considered separately so that you remain covered only by the country from which you are sent.

If you are self-employed and residing in the United States or Canada, you generally will be covered and taxed only by the country where you reside.

END QUOTE

All of the income is taxable in Canada as you are resident in Canada.

Each state is different. Some will recognize that you are no longer resident in that state while others will not recognize that you have established residency in another country and therefore will consider your state residency still to be in their state.

Yes, but why? Most residents in Canada find it better to claim the foreign tax credit since the Canadian tax rate exceeds the US. They end up paying no US taxes as a result.

No, you can not avoid paying the SE tax. You will only change where you pay it. Instead of paying into the US SE tax system, you will pay into the Canadian system.

I would much rather pay Canadian SE tax. I will make the maximum taxable wage base for the CPP in Canada, so I won't owe anything (I don't think). If I were to pay SE tax in the USA, my otherwise-taxed wages would be zero, so I'd owe the full 15.3%.

On the other topic, I think I can sever ties with my state in the USA. I'd be living with my wife in Canada in her house, I might have furniture in storage here in the USA but there would be no visible signs of intent to return. I wouldn't vote in the USA.

If that is your choice, move to Canada. Let me know early enough if you want someone to prepare the Canadian/US tax returns... The first couple of years can be difficult.

FYI, US citizens who are residents of other countries are eligible to vote in Federal elections in the last place in the US that they lived. This does not make them US residents.

Someone else claimed that Canada taxes worldwide income of citizens and residents. Residents yes, non-resident citizens, no.

Is there any country other than the US that taxes the income of non-resident citizens? I'm not aware of any.

Regards, John Levine, snipped-for-privacy@iecc.com, Primary Perpetrator of "The Internet for Dummies", Please consider the environment before reading this e-mail.

None that I am aware of with the possible exception of Eritrea (formerly a province of Ehiopia). I recently read an article from the viewpoint of Eritrea emigrants, that said Eritrea has a 2% income tax that they try (my word) to collect from emigrants. The actual words used in the article were that mafia methods were used to collect the tax.