This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.
Hi all. Could you comment if my understanding is correct.
If someone have a choice of becoming a citizen of US or not, then one thing to consider is a tax advantage (even though a US citizen always files US tax return). For example, if a person lives in Canada and has a 401 US income, then, depending on his/her status, this person must file either 1040 or 1040NR. 1040NR does not allow personal deductions and exceptions, thus non-resident (or not-citizen) will pay higher taxes on the 401 income. Thank you.
Thanks Nelsona. But if a Canadian citizen lives in Canada and does not have any status in US (no GC), does he have a choice between 1040 and 1040NR? He is just a non-resident having income from US (401).
As I said, a Cdn resident (non-US citizen of course -- that was your question) can choose to file either of the returns, can always file a 1040 if it is to his advantage.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing