Moving to Vancouver from Texas – How Much More Tax Will I Pay?

The conversation below was between myself and a gentlemen asking some questions online. I decided to post it here as it may help others thinking of moving to Canada from the US.

The decision to move to Canada from the US, especially for work can often hinge on the actual change in tax rate and overall taxes one may need to pay. In this example, the individual was asking about the tax implications of moving from Texas to Vancouver.

Because Texas doesn’t currently have any US personal income tax the difference between what he would be paying currently (Federal US tax) and Canadian tax (both Federal Canadian and BC Provincial Tax) can be significant depending on the level of income earned.

In his case however the difference in tax rates is only one factor in his decision to move to Canada for work as lifestyle was also a consideration.

As you can see from the quick analysis below the difference in tax rates between Texas and BC is close to 10% depending on available deductions and Canadian tax credits. His tax rate is also relatively high considering his single filing status in the US.

Not only should tax rate differential be considered but also the fact that his filing requirements will be much more complicated as both Canadian and US income tax forms would need to be submitted each year.

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