citizen tax advantange

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SergeP
Posts: 74
Joined: Mon Mar 09, 2009 10:38 pm
Location: hawaii

citizen tax advantange

Post by SergeP »

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.
Serge
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

A Cdn resident can file any of the returns, but a US citizen MUST file 1040, so there is no advantage in being a US citizen from a tax point of view.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
SergeP
Posts: 74
Joined: Mon Mar 09, 2009 10:38 pm
Location: hawaii

Post by SergeP »

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).
Serge
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

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 :D
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