Any Advantages to Dual Citizenship (taxwise)

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sawtooth
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Any Advantages to Dual Citizenship (taxwise)

Post by sawtooth »

I have dual citizenship but have lived in Canada my almost whole life.

With these new FBAR penalities I am thinking of just getting my US taxes up to date and then renouncing my US citizenship.

Is there any tax advantages in the future of keeping US citizenship?
nelsona
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Post by nelsona »

None tax-wise. If you would want to retire in US, you won't be able to, but without medical coverage, you weren't going to do that anyways.
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nelsona
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Post by nelsona »

But, really once you get all your tax returns in order, what;s the point of renouncing; you just copy your returns from year to year.

oh, there is one advantage, if you have kids that are US citzizens, IRS gives you $1000 per year each, just for filing.
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eortlund
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Post by eortlund »

We've also gotten money back for things like the Making Work Pay credit.
nelsona
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Post by nelsona »

MWP is no longer avaiable, but, yes, from time to time IRS throws a bone that gives free money.
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sawtooth
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Post by sawtooth »

[quote="nelsona"]But, really once you get all your tax returns in order, what;s the point of renouncing; you just copy your returns from year to year.

oh, there is one advantage, if you have kids that are US citzizens, IRS gives you $1000 per year each, just for filing.[/quote]

That's about 40 more years of filing duplicate tax returns. I always get an accountant to do it as well so I have to pay them. I'm also worried about them taxing my RRSP savings....if they don't take a cut now they could change the rules at any time in the future.
nelsona
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Post by nelsona »

The IRS' "cut" on any Cdn-source income will always be less than CRA's cut, so I wouldn't worry about that.
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nelsona
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Post by nelsona »

Oh, and if you are worried about US changing rules on taxes, maybe you should also be worried that they change their rules on former citizens.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
sawtooth
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Post by sawtooth »

[quote="nelsona"]The IRS' "cut" on any Cdn-source income will always be less than CRA's cut, so I wouldn't worry about that.[/quote]

I am less worried about my tax forms but more worried about my Company savings plan and my RRSP's. It's all from Canadian Income but I haven't yet filed out FBAR paperwork yet. I'm stressed out on how much of my savings they may take.
JGCA
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Post by JGCA »

Since it seems to keep you up at night why stress just renounce, remeber to renounce you still have to get up to date plus teh $450 fee plus any professional advise you may seek to do it, the choice is yours maybe for peace of mind you feel its the best way only you can decide.
JG
nelsona
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Post by nelsona »

IRS doesn't tax savings, they tax income. Report your accounts like you are supposed to and sleep well.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
JGCA
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Post by JGCA »

He says he always gets an accountant and pays him to do it for him, I don't know if this is going to also effect your decision to renounce teh cost of maintaining the filings you have to decide.
JG
sawtooth
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Post by sawtooth »

Well usually my accountant for Canadian taxes charges about $250/year so that's not too bad since he does a good job.

I've been asking around for a us tax accountant in Edmonton or Calgary and the first accounting firm wanted a $15,000 retainer for lawyer fees.

Someone at my work also uses a law firm and said it cost them $1500 last year to file their return.

I assumed it would be a fairly simple tax return to file (just copy the numbers from my filed Canadian returns over to a us one).
nelsona
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Post by nelsona »

It's not quite that simple, but once one year is done professionally, you should be fine.

Those wishing to charge more than $1500 should be shot.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
JGCA
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Post by JGCA »

Agreed 100%
JG
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