Hi, I'm a Canadian citizen living in the US for almost 5 years. My husband recently suggested that I should become a US citizen now (dual citizen). However, I'm not totally convinced about that.
Since I do the taxes, when I first moved here, I read something frightening about IRS worldwide taxation. Maybe I mis-read it, but it seemed to me that as US citizens, if we relocate to, say, Australia or Canada, that we might have pay US taxes ... forever???
Please tell me that's not true.
worldwide taxation?
Moderator: Mark T Serbinski CA CPA
Yes, US citizens (and generally their spouses) REPORT their income to IRS regardless of where they live.
It is unlikley however, that if you move to a country that has income tax, that you will end up paying any income tax to IRS, since the rate is so low, and there are exemptions available to non-residents.
In my opinion, the fact that you likely will leave US, makes it EVEN MORE important to get US citizenship (just before leaving if you wish), for mobility reasons.
If your spouse is US citizen, there are ceratin estate tax advantages that you gain bu getting citizenship. Getting citizenship also protects you if you were to get into a nasty custody battle after you left US: (ie. yourentire family would be US citzens except you)
It is unlikley however, that if you move to a country that has income tax, that you will end up paying any income tax to IRS, since the rate is so low, and there are exemptions available to non-residents.
In my opinion, the fact that you likely will leave US, makes it EVEN MORE important to get US citizenship (just before leaving if you wish), for mobility reasons.
If your spouse is US citizen, there are ceratin estate tax advantages that you gain bu getting citizenship. Getting citizenship also protects you if you were to get into a nasty custody battle after you left US: (ie. yourentire family would be US citzens except you)
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thank you for your reply, Nelson.
I know that Canada does not do that, but it's scary living in the USA knowing that we'll get taxed no matter where we live if we all are US citizens.
I've read that many US citizens living abroad are giving up their US citizenship to avoid paying heavy annual taxes. Maybe I'll just stay as a Canadian citizen. :-)
I know that Canada does not do that, but it's scary living in the USA knowing that we'll get taxed no matter where we live if we all are US citizens.
I've read that many US citizens living abroad are giving up their US citizenship to avoid paying heavy annual taxes. Maybe I'll just stay as a Canadian citizen. :-)
It is a falacy that many US citizens are giving up citizenship for taxation reasons. First of all, the moment they do that, they are immediately taxable for the next 10 years. Also, that 10-year clock re-starts any time they re-enter US (which in most cases they are not allowed to do).
I think *some* have given up US citizenship for political reasons.
The whole talk about giving up any citizenship, let alone US citizenship for taxation reasons, is silly.
As I said, you will be forever ties to any US taxation issues thru your husband, and he will be at a great advantage over you until you get US citizenship, so why fret over this.
I think *some* have given up US citizenship for political reasons.
The whole talk about giving up any citizenship, let alone US citizenship for taxation reasons, is silly.
As I said, you will be forever ties to any US taxation issues thru your husband, and he will be at a great advantage over you until you get US citizenship, so why fret over this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
"It is a falacy that many US citizens are giving up citizenship for taxation reasons. First of all, the moment they do that, they are immediately taxable for the next 10 years. Also, that 10-year clock re-starts any time they re-enter US (which in most cases they are not allowed to do). "
Those were the old rules; however, the law changed in 2008. As long as you are not a "covered expatriate", I don't think there is any further tax liability once you renounce. On the other hand, if you are a "covered expatriate" (which basically means you have >$2m in assets or make a lot of money), you pay an exorbitant "exit tax". See this link from Serbinski:
http://www.serbinski.com/taxation-in-ca ... ship.shtml
And, yes, I have read that expatriate renunciations have surged in the last year. Overseas consulates have been so overwhelmed with applications for renunciation that they added a $450 fee for the "service".
Those were the old rules; however, the law changed in 2008. As long as you are not a "covered expatriate", I don't think there is any further tax liability once you renounce. On the other hand, if you are a "covered expatriate" (which basically means you have >$2m in assets or make a lot of money), you pay an exorbitant "exit tax". See this link from Serbinski:
http://www.serbinski.com/taxation-in-ca ... ship.shtml
And, yes, I have read that expatriate renunciations have surged in the last year. Overseas consulates have been so overwhelmed with applications for renunciation that they added a $450 fee for the "service".
Good info. I never read his site :o)
It should be noted that is an additional rule. The 10-year ruke still applies to long-term residents and citizens, under anothr section of the act.
In our posters situation however, the actual US citizen doesn't have any intention of renouncing citizenship. In fact he wishes (correctly in my opinion) to have his wife obtain such citizenship. the advantages outweigh the cons.
It should be noted that is an additional rule. The 10-year ruke still applies to long-term residents and citizens, under anothr section of the act.
In our posters situation however, the actual US citizen doesn't have any intention of renouncing citizenship. In fact he wishes (correctly in my opinion) to have his wife obtain such citizenship. the advantages outweigh the cons.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Hmmm.... maybe I just assumed the new expatriation rules replaced the old 10 year provisions. So does this mean that a renouncing USC who does not meet the definition of "covered expatriate" (presumably because they do not meet the income or asset tests) is still subject filing 1040's for the next 10 years???