For ease of reading, this article uses non-U.S. and U.S. to
refer to non-U.S. persons and U.S. persons when referring to
spouses.
The U.S. tax reform passed late last year will impact many
Canadians with U.S. connections and requires a review of individual
and family estate planning.
Here's an overview of certain major changes. Then, we'll
get into specific scenarios.
Personal tax rates
The Tax Act reduces personal tax rates. The top bracket for
people with income over US$500,000 (previously US$453,351) is now
37%, reduced from 39.6%.
By comparison, the top marginal tax rate for an Ontario taxpayer
in 2018 is 53.53%, which applies to individuals with income above
$220,000. There is now a huge gap between U.S and Canadian tax
rates, and they seem to be on opposite trajectories.
