citizen tax advantange

SergeP · Post by **SergeP** » Thu Feb 09, 2012 11:11 pm

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.

nelsona · Post by **nelsona** » Fri Feb 10, 2012 1:09 am

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.

SergeP · Post by **SergeP** » Fri Feb 10, 2012 3:37 pm

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).

nelsona · Post by **nelsona** » Fri Feb 10, 2012 6:15 pm

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.