SALT: Trump, Big Beautiful Tax

[August1991]

SALT= State and Local Taxes

Can an American explain this to me?

In Canada, some provincial/municipal taxes are deductible.

[August1991]

In Canada, we generally submit one single federal income tax form. In this federal form, we must declare a residence, declare an income and we pay a federal income tax - the provincial income tax is a portion, it is not deductible.

In Quebec, I submit two separate income tax forms. In my federal form, I can reduce some of my federal taxes based on Quebec taxes.

In Canada, we pay our local property/school taxes separately. In Quebec, I cannot deduct either from my federal/Quebec income taxes. 

 

[paxamericana]

On 6/30/2025 at 10:43 PM, August1991 said:

SALT= State and Local Taxes

Can an American explain this to me?

In Canada, some provincial/municipal taxes are deductible.

Those are deductible from federal

[August1991]

On 7/3/2025 at 10:02 AM, paxamericana said:

Those are deductible from federal

Please explain. WTF?

Imagine the incentives!

====

In Canada, I declare an income. The federal takes a cut. The province takes a cut. Municipal? The city has a property tax.

I cannot reduce any of these taxes with the tax I pay to the other level of government.

Imagine: Quebec government says that you can reduce your federal tax with taxes paid to Revenu-Québec.    

Edited July 6, 2025 by August1991

[paxamericana]

State sales tax and state income tax are deductible from the federal. If you make 200k and get taxed 50k by the state that year, your effective taxed income is 150k 

[August1991]

6 hours ago, paxamericana said:

State sales tax and state income tax are deductible from the federal. If you make 200k and get taxed 50k by the state that year, your effective taxed income is 150k 

WTF?

1. How does the federal IRS (CRA) calculate how much state sales tax a person paid?

2. Huh? 200K - why, God wish. In Canada, this would mean that if the provincial government taxes me, and if I earn more than 200,000, I could reduce my federal tax by the amount I paid to provincial tax.

Heck, Quebec already does this.

[paxamericana]

6 hours ago, August1991 said:

WTF?

1. How does the federal IRS (CRA) calculate how much state sales tax a person paid?

2. Huh? 200K - why, God wish. In Canada, this would mean that if the provincial government taxes me, and if I earn more than 200,000, I could reduce my federal tax by the amount I paid to provincial tax.

Heck, Quebec already does this.

1) they don’t, you have to calculate and prove it your self when they audit.

2) the recent bill aimed to reduce taxes on corporations. It’s built to encourage business spending.

[August1991]

On 7/6/2025 at 9:40 AM, paxamericana said:

1) they don’t, you have to calculate and prove it your self when they audit.

2) the recent bill aimed to reduce taxes on corporations. It’s built to encourage business spending.

Audit?

The US federal IRS system seems to be random. Like the CRA.

Revenu-Quebec seems to know about me.

 

[paxamericana]

1 hour ago, August1991 said:

Audit?

The US federal IRS system seems to be random. Like the CRA.

Revenu-Quebec seems to know about me.

 

Statistically, the us IRS audit rate is higher above 600k and below 30k income. I assume Canada does something similar. 

Edited July 10, 2025 by paxamericana

[August1991]

3 minutes ago, paxamericana said:

Statistically, the us IRS audit rate is higher above 600k and below 30k income. I assume Canada does something similar. 

In Iceland, I suspect the tax people know everything.

Norway? Any Norwegians on the forum?

[August1991]

On 7/6/2025 at 9:40 AM, paxamericana said:

....

2) the recent bill aimed to reduce taxes on corporations. It’s built to encourage business spending.

In Canada, the tax on corporate earnings is 15%, I think.

My dentist is incorporated, and that's what he pays - after paying his high income tax.

[August1991]

On 7/5/2025 at 8:46 PM, paxamericana said:

State sales tax and state income tax are deductible from the federal. If you make 200k and get taxed 50k by the state that year, your effective taxed income is 150k 

Let me come back to this.

If I understand properly, in the US, if I make gross 200k - I only have to pay federal tax on 150k. 

[paxamericana]

6 hours ago, August1991 said:

Let me come back to this.

If I understand properly, in the US, if I make gross 200k - I only have to pay federal tax on 150k. 

You can deduct the local sales tax, as well as local income tax. 

[August1991]

On 7/12/2025 at 8:48 AM, paxamericana said:

You can deduct the local sales tax, as well as local income tax. 

In Canada, we can't do that.

In Canada, we cannot reduce our federal taxes with provincial government taxes paid - except in Quebec.

====

IMHO, Trump made the US tax system more "fair" - more accurate.

[August1991]

On 7/12/2025 at 8:48 AM, paxamericana said:

You can deduct the local sales tax, as well as local income tax. 

To clarify, "local" means state or municipal/property.  

[paxamericana]

13 minutes ago, August1991 said:

To clarify, "local" means state or municipal/property.  

Both. All taxes from local(city,county etc) and state are tax deductible from federal. 

[August1991]

3 minutes ago, paxamericana said:

Both. All taxes from local(city,county etc) and state are tax deductible from federal. 

In Canada, we can't do that.

====

I pay Montreal property taxes. I pay these in person. 

I also pay income taxes to the province, Quebec.

Finally, I pay taxes to the federal government, the CRA. 

[paxamericana]

7 minutes ago, August1991 said:

In Canada, we can't do that.

====

I pay Montreal property taxes. I pay these in person. 

I also pay income taxes to the province, Quebec.

Finally, I pay taxes to the federal government, the CRA. 

Yeah definitely not encouraging people to do business altogether. What's the point of making a profit if you can't keep it.