Do I need to renounce citizenship if I make more than 100k?

[Raedwa01]

i posted this on the immigration forum, but was told it belonged over here, so here goes.

Im sure this has been asked before, but it's been some time and I'm not sure how tax laws have changed.

We are thinking of moving from the U.S. to Canada on a permanent basis. I currently work as a contractor for a company in the U.S. and plan to continue to do so for the foreseeable future.

Currently, I am making somewhere north of 150K in U.S. Dollars. If/when we move to Canada, how does this effect my taxes? I would do all my work from my home in Canada with an occasional weeklong trip to client sites in the U.S. I know the weeks I am in the U.S. would be deemed U.S. based income, but would the remaining not be? Also, I know the IRS has restrictions on incomes over a set level to avoid tax dodging. Truth is, I plan to stay in Canada for the foreseeable future, so I'm not trying to dodge taxes, I just don't want to be double taxed more than I need to be.

I currently own an LLC in the U.S. As well and can bill through it if needed, but I think they are recognized as corporations in Canada and if I ever moved back, my profit from the business would be taxed steeply by Canada as a penalty for leaving.

I really don't want to renounce my citizenship as I would like the option to move back, but is that the only way to avoid US taxes?

[nelsona]

Almost no US citizens living in canada pay any US tax, or any more tax than they would as a non-US citizen.
. What has caused the rush to renounce citizensship are the foreign account reporting rules, which caught most US citizens living abroad by surprise.

Your contract work, even though it will be for a US client, will be considered Cdn sourced by treaty (ALL of it, even the weeks you are in US), and will thus qualify for foreign earned income exclusion and/or foreign tax credits, so after your transition year, there is little chnacce that you will owe US any tax, since canada's taxarte is higher than IRS rate.

just be aware that there are reporting requirements for any Cdn accounts that you open (FBAR,FATCA, 3520, etc. These have been described in great detail in mnay other threads.

I would be setting up a Cdn corporation once you move here. It rarely works out for the best to have a corp in one country while living in the other.