Foreign Tax Credit or Deductions
For expats who don’t wish to pay double in taxes, you may claim a foreign tax credit on your U.S. return for taxes you are required to pay to Canada. To claim the expatriate taxes credit, you must complete Form 116 and attach it to your U.S. return.

Alternatively, you can claim the Canadian taxes you paid as itemized deduction. Both the deduction and credit are limited to foreign income that is subject to U.S. tax, so neither can be claimed for income excluded on Form 2555. For questions, contact us at (905) 737-5811.

Treaty Benefits
For individuals who have taxation needs in both the U.S. and Canada, there is a United States-Canada Income Tax Treaty that may affect your U.S. tax return. Article XXIX of this treaty states that there is nothing in the treaty that can prevent the United States from taxing its own citizens. Despite this provision, the treaty does provide some exemption and/or deferral opportunities for U.S. persons. For more information on gaining exemptions from this treaty, visit us at Insta-Tax Corp. office.

Other Documentation
A handy guide to all necessary numbers and paperwork.

Federal Tax Rates:

  • 15% on the first $45, 282 on taxable income, +
  • 20.5% on the next $45,281 of taxable income (on the portion of taxable income over $45,282 up to $90,563),+
  • 26% on the next $49,825 of taxable income (on the portion of taxable income over $90,563 up to $140,388),+
  • 29% on the next $59,612 of taxable income (on the portion of taxable income over $140,388 up to $200,000).+
  • 33% of taxable income over $200,000.

Important Slips:

  • All T4 slips (Employment income)
  • Employment insurance benefits (T4E)
  • Interest, dividends, mutual funds (T3, T5)
  • Tuition / education receipts (T2202A)
  • Universal Child Care Benefit (RC62)
  • Old Age Security and CPP Benefits (T4A-OAS, T4AP)
  • Other pensions and annuities (T4A)
  • Social assistance payments (T5007)
  • All other information slips

Receipts:

  • RRSP contribution slip
  • Support for a child, spouse or common-law partner
  • Professional or union dues
  • Tool expenses (for tradespersons)
  • Medical expenses
  • Transit pass receipts
  • Charitable donations
  • Political contributions
  • Child care expenses
  • Adoption expenses
  • Children’s arts and sports programs
  • Moving expenses
  • Interest paid on student loans
  • Carrying charges and interest expenses
  • Office in-home expenses
  • Exams for professional certification

Other Documents Needed:

  • Notice of Assessment/Reassessment
  • Canada Revenue Agency correspondence
  • Sale or deemed sale of stocks, bonds or real estate
  • Northern residents deductions
  • Rental income and expense records
  • Business, farm or fishing income/expenses
  • Automobile/Travel logbook and expenses
  • Disability Tax Credit Certificate
  • Declaration of Conditions of Employment (T2200)
  • Volunteer Firefighters certifications