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Home Business Tax Deductions Canada

July 28th, 2010

Home Business Tax Deductions Canada

Question: How much would I pay in taxes in Quebec, Canada?

I currently live in the US and am considering a move to Montreal. I operate a home business, and all of my income is coming from US sources, but I have been told that Canada taxes all worldwide income. Then it seems that the US would give me some sort of tax credit for what I paid to Canada.

I expect to make $25,000 before deductions. Does Canada have a similar system as far as self-employment taxes? Do they have a self-employment tax?

What abouts would I have to pay for tax, including federal and provincial?

Answer: If you move to Canada and operate a home business, that is CANADIAN-source income, regardless of where your client resides.

Only if you are a US citizen would you continue to file and pay US taxes, and receive a Foreign Tax Credit on your CANADIAN return.

Yes, if you are a sole-proprietorship, you must pay CPP premiums yourself. This is equivalent to SE tax.

For estimates use the tax calculator here:

http://www.taxtips.ca/calculators/taxcalculator.htm

Much, much more info here:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/menu-eng.html