Dual Citizen - Opportunity in Canada - Need Advice

[KittyKat]

I have lived my entire life in the United States, but I'm a dual US-Canadian citizen since I inherited my Canadian citizenship from my parents, who immigrated from Canada to the United States decades ago.

I am currently employed as a physician in the United States, but I have recently been offered an attractive job opportunity to practice in Canada, with a salary of several hundred thousand dollars a year. Additionally, I also have personal reasons for wanting to move to Canada, as I have a lot of family there, as well.

However, I have been hesistating to make the move because I'm afraid of possible consequences I may suffer regarding my US citizenship, specifically as it pertains to double taxation, as the US bases taxation on citizenship, not residency (as most of the world does). For example, my yearly income would obviously exceed the foreign earned income exclusion. Consequently, it is my impression that I would be subject to double taxation from both the US and Canada, even though the US and Canada have a treaty to preclude such double taxation.

Are my fears overblown? What should I do? Any advice would be appreciated. Thank you.

[nelsona]

The taxation in canada is much higher than your US tax, and since US gives credit for any foreign tax paid, you will almost never owe tax to IRS on your Cdn income. No need to rely on any foreign earned income exclusion, the foreign tax credit will take care of everything.

Its not a treaty issue. US allows tax credit for foreign tax from almost all governments.

[KittyKat]

nelsona, thank you very much for your response.

I have one more question regarding this - what if I decide to incorporate my practice in Canada? Would that make a difference in relation to what I may owe the IRS? I ask this because it is my understanding that corporate tax rates are generally lower in Canada than they are in the United States; moreover, incorporation can apparently help lower tax burden within Canada itself, as well.

Once again, thank you for your assistance, and sorry if my questions may sound somewhat ignorant, as I don't personally have much of a business or financial background.

[nelsona]

This should not have an impact.