Tax Question

[Udella&Wiz 325]

My wife and I are kicking around some telecommuting ideas. Can someone tell me the tax implications of working for a US company but living in Canada. Do you have to pay Canadian income tax or US income tax or both. What about state taxes or provincial taxes. I am almost positive we would have to file tax returns in both countries but also am assuming we would get a tax credit from one country or the other. Thanks.

[nickbits 43]

I lived in CA and worked in the US for about 5 years before moving to the US. I had to file State, US Federal, Provincial, CA Federal. You do get credits on for tax you paid to the other country. The net effect is that you pay the higher of the 2.

[Udella&Wiz 325]

Thanks for that info - I don't know if you can answer this too. Which is higher? the US or the Cdn? I guess it may depend by province & state.

1 thing we fear is getting screwed by not remembering to file section 217s in Canada(did you have to file those every year?)or other types of exemptions. Obviously you pay the US taxes off your paycheque/ check immediately but nothing Cdn is deducted/calculated until you file a return?

Although we'll still live here a while eventually we can see getting closer to my parents (me = Cdn spouse) even if it means just moving a few states north to get closer to the border

Thanks...Udella