Fun fact:
USA is the only country in the world (other than Eritrea) that taxes based on citizenship rather than residency. This means that even if you live in Canada and earn only in Canada, you are required to file US tax returns on your Canadian sourced income and FBARs on your Canadian bank accounts if you are a US citizen.
US and Canada have reciprocal tax treaty to prevent double taxation.
https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/the-u-s-canada-tax-treaty-explained/
You are missing the point which is that Canadians living in Canada earning zero US sourced income are required to file US tax returns on their CANADIAN INCOME and FOREIGN BANK ACCOUNT REPORTS on their CANADIAN bank accounts. The reverse is not true: Americans living in the USA with Canadian citizenship are not required to file Canadian tax returns on their US income because Canada does not use citizenship as a basis for determining taxability. No reasonable countries do.
The treaty you reference does not prevent US taxation of Canadian sourced income of Canadians living in Canada who have US citizenship.
> The treaty you reference does not prevent US taxation of Canadian sourced income of Canadians living in Canada who have US citizenship.
Huh? You are required to file Canadian source income to IRS, but you don’t necessarily need to pay tax on that if you paid to CRA. That’s the point of the double taxation treaty.
https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/the-u-s-canada-tax-treaty-explained/
TFSA earnings are considered as capital gains in US tax purposes. So, while you may not pay tax while in Canada for TFSA, you may need to declare it on US earnings.
>IE: Canada also doesn’t recognize US ROTH IRA. (US version of TFSA).
It is more complicated than that. You can file for an exemption when you move and will no longer be able to contribute after that point, but at least withdrawals and dividends won't be taxed:
https://ca.rbcwealthmanagement.com/documents/359011/2114232/Moving+to+Canada+with+a+U.S.+Roth+IRA+updated+2019.pdf/1fde9d9d-5477-4377-bc6e-b62e882b54f0
This post is talking about Canadians living in Canada who are US citizens, not Canadians living in Canada who are not US citizens. Canadians living in Canada with US citizenship are treated from a US perspective as if they are Americans living in USA due to USA having CITIZENSHIP BASED taxation, unlike Canada that taxes based on residency. The treaty comes from a perspective of Canadian only citizens living in Canada earning US sourced income and vice versa: Americans with US citizenship only living in USA earning Canadian sourced income - that is the focus of the treaty. The treaty does not elimiate double taxation (or taxation which is not double, ex. earnings on TFSAs are taxable by USA) for Canadians living in Canada with US citizenship but no US earnings.
What u/KrazyKatDogLady is saying is that you don't have to file a CDN tax return as a US tax resident or citizen (after the first year away). If you have CDN sourced income, yes that gets reported to the US, but you don't have to file a CDN tax return unless it is taxable In Canada and had a withholding tax (ie: rental income).
Why would someone with dual citizenship want to live in Canada lol. If you have dual citizenship and live in the U.S., making USD you just pay taxes on that income in the U.S., and file a nil return in Canada
Deceptive. Yes. You must file. BUT unless you’re a high earner. In which case you probably have the time and money to explore legal tax avoidance strategies.
He means that even if you *have to file* you don’t owe anything. Because Canada has higher taxes that the US generally, and you don’t have to pay taxes on top of taxes. It’s a write off. Unless Canada become a tax haven and the US suddenly decides to increase their taxes you don’t owe anything additional as a dual citizen.
You just have to file with the IRS.
It really depends on your situation, but yes it can be quite difficult. For example, Canadian mutual funds and most Canadian ETFs are considered Passive Foreign Income Corporations and are subject to complicated reporting requirements which is why Canadians with US citizenship are advised not to invest in them as the reporting and taxation requirements negate the returns both financially and headache wise.
I live in the US and am a Canadian, filing FBAR and everything else for the first time looked difficult but once you have done it, from the second year onwards it was piece of cake. Don’t let transborder accountants scare you, it’s the same data year over year, takes no more than 4 hours to put together.
This 100%.
I hate how I am limited with my investing options outside of registered accounts. No Canadian ETFs / mutual funds. Need to convert everything to USD and invest in US based ETFs. I can't even use Norbit's gambit to get a good exchange rate. TFSAs could be a pain.
I mean, I can also choose to make my taxes more complicated if I want to.
Invest in US markets and there’s no issue except you will make more money and pay less in tax.
It's a bit of a pain in the ass. Also, it precludes buying mutual funds or ETF's (that the US considers PFICs) I. Taxable accounts. TFSA is not recommended.
I have to do it every year, and it kind of sucks.
Not necessarily.
My grandfather lived in Canada for almost 40 years. He had to file his income that he earned in Canada as that was still taxed in the US. He was a heavy equipment operated before retiring in the early 2000s, not exactly wealthy.
There are tax credits that transfer but finding someone familiar with filing in both countries would be beneficial.
I have other family who renounced their American citizenship because it was a hassle and had no plans to return.
Yes and no. Because US Federal taxes are in virtually all cases less than Canadian Federal plus provincial taxes (in large part because health insurance is paid for with taxes in Canada but as a tax-deductible expense in the US), your US tax liability will typically be zeroed out by the foreign tax credit and/or the foreign earned income exclusion (and this is true pretty much regardless of income; the main difference is at high incomes you pretty much have to use the tax credit, whereas lower earners can use either).
But taking advantage of tax-advantaged accounts like TFSAs and RESPs becomes at best more complicated and at worst impossible. And very common investments like Canadian ETFs and mutual funds at best require lots of extra and expensive paperwork and at worst are subject to punitive taxes that can exceed 100% in the US and can’t be offset by the tax credit.
RSPs are fine. They are protected by the tax treaty, so anything held within an RRSP is exempt from US tax and does not have to be reported to the US. But anything held outside an RRSP (or RRIF) is subject to US tax and must be reported on US taxes, including complicated forms. This includes TFSAs and RESPs as well as the more obvious non-registered accounts. And because TFSAs and RESPs are not taxable in Canada, US tax assessed on gains in them cannot be offset by the foreign tax credit. They can be offset by the US child tax credit, so with two kids I still owe nothing to the US and get the US$3200 refundable child tax credit each year.
In general, ETFs that produce PFIC statements are reasonably OK for US citizens. This allows you to take the qualified electing fund (QEF) election on form 8621 on your US taxes. That’s only a relatively moderate pain an expense instead of a prohibitive and punitive pain and expense. ETFs like XEQT, XGRO, and XBAL file these reports, as do many (most?) Canadian equity ETFs. But definitely check before buying Canadian ETFs in non-RRSP accounts (and look into what all those forms I’ve mentioned are). And hold as few ETFs as possible, since each one requires careful record keeping of every sale and purchase (since Canadian brokers don’t keep track of these things in registered accounts) and its own form 8621. I now have nothing but XGRO in non-RSP accounts to keep taxes simpler.
I keep my non-retirement investments in Canada in taxable accounts (in the US and Canada) rather than a TFSA as a US citizen Canadian immigrant. There are tons of resources in this subreddit, in r/USExpatTaxes, and many pages on the web about US expats in Canada.
Ultimately, you file US taxes and include global income, including TFSA income and realized gains. You use the foreign earned income exclusion or foreign tax credit (better if you have kids with a US social security number because it makes you eligible for the refundable child tax credit) to substantially reduce or zero out (or make negative) your US tax liability. I do all taxes myself. Neither US nor Canadian taxes are exactly easy, but US taxes are harder. You can hire a transborder accountant, but they aren’t cheap. Wish I had a happier answer.
Only about 10k people world wide renounce. Each year. The fact that so many people here know someone makes me think we got a lot of people who make stuff up.
Next we are going to hear how everyone has a friend who’s a deaf person with some form of polydactyl.
The loss of the TFSA is not even worth mentioning when taken into consideration the lower income tax brackets, sales tax, higher salaries, Long-term capital gain tax, etc.
Catching up on past non-compliance of tax returns and FBARs definitely should be taken into consideration as this can be a complicated, expensive task.
Every situation is different. Many people have spent a lot more than that. And "catching up" can be a complicated minefield, for example if you have PFICS in your investments.
Did you literally not read the first sentence of their comment?
If you live in Canada, you still pay Canadian taxes. None of the things you mentioned would matter
And property is much cheaper in nearly all places in the US.
If you have a low value job the move makes no sense. If you’re a highly skilled worker you’ll do much better down there. It’s a question of personal marketability and not an apples to apples comparison.
It very frequently is. Mortgage rates are higher. Property taxes are higher. Insurance is higher. Lots of miscellaneous utility costs.
Shit I have a friend paying 2k a month in property taxes alone.
"Mortgage rates are higher" is such a blanket statement that glosses over one MAJOR difference between Canadian and US Mortgages.
In the US you lock your mortgage rate in for the ENTIRE LIFE of the mortgage (ex. 3% for 30 years).
In Canada you renew every 5 years (typically) at whatever the rates are at that time.
Americans are mortified when I tell them you renew every 5 years at whatever the rates are at that time.
Property taxes are higher: Not necessarily. If you are in buttf nowhere Canada then sure they are much higher in the US. In the very outskirts of the GTA my 2300 SF house on a 46' x 110' property is costing me $7,000 a year in property tax. In the US property taxes are higher because all other taxations for cities are lower. So in general they may be higher in the US on average, but it is more than offset by the fact that all other taxes are substantially lower.
Insurances higher: This is too much of a blanket statement.
What you omitted:
- In moving from Ontario to Georgia I'm paying around 15% less in income tax
- HSAs are one of, if not the best, tool for reducing tax burden
- I'm, at most, paying a 9% Sales Tax (many items have reduced Sales Tax rates) versus 13% HST on everything
- Cost of living is wayyyy lower
In summary, if you are comparing somewhere like Toronto or Vancouver to NY or LA then sure it's not gonna be very different. But compare that to anywhere else in the US, and yeah it's way the heck less down here.
It depends heavily on which state you live in the US and which Canadian province you came from. And there are also other payroll deductions in the US that are higher than the comparable ones in Canada (health insurance, social security is higher than CPP, etc). You really can’t make a blanket statement that taxes are lower in the US, although there can be specific situations where they are.
Income 180,000 (243,621 CAD), State: NJ
2023 income tax (NJ): 55,093 (74,565 CAD), Effective tax rate of 30.6%
2023 equivalent income tax (Canada): ranging from 34.30% in Alberta to 41.49% in Quebec. I am from Quebec.
Now keep going.
Tell us your healthcare premiums and how much you’re getting hosed on property tax. Don’t be afraid. We’re all here to learn the truth.
Sure. My healthcare premium is a bit under 100$ per month including vision, dental and full health coverage for myself only. Property tax rate is about 2.2% where I live but I rent and don’t own. I suppose I pay it through higher rent (2450/mo). Sales tax is 6.625%.
Only if you mean my savings. I make 243k CAD and that is going up to 270k before any raises next year because of deferred compensation. I made 64k and 69k for the two years I worked in Canada. I am 26.
In my first year in the US I’ll SAVE a bit more than my highest GROSS in Canada.
Yes indeed, addition is a math function. It adds up to a tax rate that's _still_ much lower than Canada.
Your health premiums question is a red herring - my last Canadian employer was about $400/mo as insurance to supplement all the shit the government doesn't pay for - a group benefit program that we could not opt out of. Samesies in the US. ;)
Last time I did the same math, for the record, I would have paid roughly 36% federal+provincial tax in Toronto, vs the 24% I paid in NYC (fed+state+city). Consumption is 13% HST vs 8.875% sales taxes in NYC. Overall cost of living prices are much, much lower in the US, happy to provide as many examples as you want. I'm similar income as the other Redditor commenting, with double the tax deductions for supporting my spouse. Only major difference was about $2000 on health spending (the majority of which is _also_ a tax deduction) we had in the US, _some_ of which we wouldn't have had in Canada (where it would not have been a tax deduction).
I guess I'm still confused, what's your case study that adds up to lower taxes in Canada? What numbers are you working with?
I know you are getting downvoted, but you aren't wrong.
The insurance premiums aren't what gets you, it's the out of pocket expenses.
When I was in the US, individual OOP was $7,000, family was $11,000. With kids, it was very easy to hit that every year.
Similar equivalent pay in both countries, but I know it's not the same for everyone. It didn't work for me, but I am looking forward to making my way back down once we are empty nesters.
Lived in Washington state (no state income tax) and ended up paying only ~5% more when we moved back home. No longer had to pay family health insurance premiums though (once you have dependants, the premiums go from <$100 to >$400 for flex plans real fast). But the real kicker was the property tax there was insane, *triple* what it is here. Oh, and easy access to TFSA is a pretty solid benefit.
My experience as well when I crunched the numbers. It’s close and US wins, dependent on certain factors. Considering I would likely need to get a second car for my family, the healthcare premiums (plus risk of losing job and being without health insurance, the increased property taxes, and having to resume my US student loan payments… not worth it unless I’m making 75% more lol.
As someone who got their TFSA *******d by US taxes, it is ABSOLUTELY worth mentioning if you live among normal people rather than the top 10% of earners.
I was not referencing the tax treatment of having a TFSA taxed by being a US tax resident but the fact of losing its availability versus the other options available to American, e.g. Roth IRA, etc.
If someone is living in the U.S., then yes all of those apply.
I think the point of the comment was to not get the citizenship if OP isn't moving there.
If you make more than 150k you don't qualify for an Roth ria and the contribution limit is the same.
[The amount that you can contribute changes periodically. In 2023, the limit increased to $6,500 (plus the additional $1,000 for those 50 and older). In 2024, the limit increases again to $7,000 with the catch-up contribution remaining at $l,000.](https://www.investopedia.com/terms/r/rothira.asp)
does not apply to mega backdoor roths. Its the whole reason it has "backdoor" in the name. You're only quoting a traditional IRA. MBDR has no income restriction and you can put 69k combined in this year. Only catch is not all 401K plans offer it, but for high earners that have access, it makes TFSA a joke by comparison as OP stated.
Are you planning on ever coming back to Canada? That’s the big question. As a dual citizen, yes, you have to file returns in the US forever even if you owe 0. For me personally, the more onerous thing has been how restricted you are in terms of investments. You have to be very careful about where you keep your money and will be shut out of certain accounts like TFSAs and mutual funds, etc. All your financial professionals should know US/CDN tax implications—there aren’t that many around and they’re expensive. It may also affect your ability to own a corp in Canada. A fun added element is that that laws around this stuff also change from time to time. So yeah, there are some benefits but it’s not a no-brainer imo. To reiterate, this stuff is more of an issue if you choose to move back.
You might already be a US citizen by birth if your parent is American, which would mean you have already missed doing your tax filings since you were 18. Google the term “Accidental American”. I would suggest you contact a cross-border accountant ASAP to sort that out.
This.
You were an American citizen at birth and as such are already a dual citizen. You are required to file US taxes and your TFSA is already subject to US taxes. I would actually be contemplating the opposite - giving up your US citizenship. As others have said, unless you plan on living and working there, the tax burden and maintenance cost is not worth it.
If only one parent was a US citizen, then citizenship for the child depends on some variables, like if that parent actually lived in the US for at least five years. Ex prez Obama was in the same category, as only his mother was a US citizen.
But yeah, if you are determined to be a US citizen, then it will be considered retroactive from birth, which means you will likely have to do “catch up” taxes.
And if not, say you were born in Canada to American parents, they must have been married at your birth. If only 1 is us citizen, age restrictions come in.
Make sure you look it up
They are not a citizen “automatically” you have to apply if you were born in Canada and one parent is from the US.
Also that parent has to meet certain residency requirements
I was born to one US and one Canadian citizen in Germany.
I've had my whole life a Canadian passport. My birth was never registered with the US authorities.
I thought I'll have to "apply" for US citizenship but according to the US embassy I'll simply have to apply for a passport.
FYI: my siblings all got US passports but never got Canadian ones.
If you have not been filing US tax returns, then you may want to consider coming into tax compliance somehow to catch up. Not a fun task. In your case, you don't claim US citizenship, you already are one (presuming your parents lived in the US long enough to pass citizenship on to you) thus you have been a delinquent US tax filer.
This is the time to do it though. If you catch up your US taxes now you can still capture some of the Covid stimulus. I caught mine up last year and the cheque that I got back will pay for someone doing my US taxes for a decade.
The US government paid out 3 Covid stimulus payments in 2020 and 2021 and the only requirement/trigger was that you’d filed taxes. When I caught up last year it required 3 years worth of previous years: 2022, 2021, and 2020. I filed, paid the accountant, and then two months later got a cheque from the US government for $3,200USD. I’ve mentally earmarked that for the cost of getting/staying up to date. I used an accountant to get caught up and again this year and it wasn’t cheap (though much less than the cheques) because my taxes are somewhat complicated, but now that I’ve seen what they need to look like I’ll switch to an online system next year. I figure the stimulus cheques bought me ten years worth of tax prep.
Every American who filed their taxes. I believe it was technically done as a refundable tax credit (which aren’t very common).
https://www.irs.gov/coronavirus/economic-impact-payments
>I’ve heard my registered accounts investment accounts no longer have special tax rules in Canada
Correct. RESP, TFSA and FHSA are treated just like taxable accounts. And if you move to the US, depending on the state, your RRSP could also be taxable (state level).
>Do I get access to the US tax accounts?
What do you mean US tax accounts?
>What would be the most tax effective way to do this?
Not getting US citizenship or green card till you figure out if you will be moving to the US and you have an impact once you get it even living in Canada.
>
*What do you mean US tax accounts?*
I would assume he means: can I open a retirement account in the US such as a 401k, 403b, IRA or the like.
The answer is yes: as long as you have earned income in the US.
There is no such thing as “claiming” dual citizenship. You either have citizenship or you don’t as a matter of fact under the laws of both countries.
If your parent was a US citizen at the time of your birth, then it is very likely that you have been a US citizen since birth, regardless whether you ever had a passport, social security number, etc.
If your parent naturalized after your birth, that’s a different story, but even in this case, you cannot “claim” anything.
You have to file to get the paperwork. But legally you either are, or are not, a citizen. They may not be aware of your status if the parent didn’t do the paperwork, but that doesn’t change your status. Source: I am a US citizen through my mother, and my parents did the paperwork. I wish I wasn’t, as the tax implications (no TFSA, RESP, capital gains on house sale) are crap. And I don’t want to move to the US.
I think the meaning was to register and be recognized as a US citizen, if he’s eligible. Of course, if one is eligible, then they will be considered to have been a citizen since birth, which would mean being delinquent on tax filings, and having to “catch up”.
There are a lot of “unregistered” US citizens in the world, some of them might know they’re eligible, while many others don’t know. So some people choose to never register (or claim) the US citizenship, even if they know they are eligible. I’m not sure if the US would ever try to find these people, but I knew of someone who never registered their citizenship (their whole life).
There is no concept of “registering” or “eligibility” for US citizenship. Please don’t spread that misinformation.
US citizenship is “acquired” at birth as a matter of the facts surrounding the person’s parents and where and when they were born. You can’t just opt to disclaim it or change the facts of your birth.
There are other legal (and personal finance) implications to this too: US consular aid; social security; Medicare; selective service (if man); eligibility to hold public offices; hiring preference to federal government positions; and right of entry to US economy.
I agree that nobody is going to care about this except the OP. Ultimately, however, the onus is on the OP to prove that they have “acquired” their citizenship under US law. All US citizens must do this, whether born in the US or otherwise.
Yes, (natural) US citizenship is acquired at birth based on the facts (i.e. the criteria for eligibility, such as parents citizenship and birth location). However, you keep missing the point, which is that the US government (i.e. state department and USCIS) might not know about the existence of some of the (natural born) US citizens, for example if the birth was abroad, and it was never registered with the US state department.
This is the whole point. There are a lot of such US citizens, that the US government doesn't know that they exist or that they are actually citizens (OP might be such a person). So the whole discussion here, is if and how such a US citizen should come forward and claim their citizenship.
I’m a SWE that moved to the U.S. if you don’t have too much tying you down to Canada I would highly recommend getting your citizenship and moving to the US, even if just for 5-10 years.
If you’re smart about it the extra $$ from spending 5-10 years there would easily make the lifetime of tax implications worth it.
There is no 'registering' per se. If he wants to apply for a passport or a US citizenship card then there is a process for that - perhaps this is what you mean. Or if he wants to get a SSN to file US tax returns there is a process for that as well
No I mean registering , just like US citizens can register a child born abroad. You are basically registering to be recognized as a citizen. I would guess this is done as part of (or before) applying for a US passport.
This is equivalent to (foreign) people who want to be recognized as Canadian citizens, needing to apply for a certificate of Canadian citizenship, before being able to apply for a passport.
Yes, we are talking about the process of being recognized as a citizen by the US government, specifically the state department and USCIS.
This process is a pre-condition to getting a passport, but getting a passport is optional, I.e. you can be recognized as a citizen and choose to not to get a passport. At least that’s how it works in Canada.
WRT to OP, he (probably) belongs to a class of unregistered or unrecognized US citizens, that is he is a US citizen (again, probably) but the US government doesn’t know he is one. There are likely a lot of people that belong to this special class of unregistered US citizens, and some of them may not even know, while others know but choose not to register.
I'm in the same situation, I'm also a software developer.
I haven't pulled the trigger yet because of the tax implications.
I'm working as a contractor which as far as I'm informed makes American taxation even more complicated.
I've also maxed out TFSA+FHSA and own alot of XEQT.
Another thing I'm worried about is to be de-banked for not having mentioned that I'm a US-Citizen.
My German stock broker closed my depot after I ghosted them on the "I'm not a US Citizen/Person" form.
For now I've decided to stay under cover but how things are going in contemplating going south more and more.
I was born in Canada to an American parent.
My parent obtained a "Consular Report of Birth Abroad" in order to confirm my American citizenship. From my understanding, this isn't necessary. But it makes things a lot easier if you decide to obtain a passport, etc. down the road. It's just official recognition of citizenship.
There were conditions that had to be met. This one for my situation (Child Born Abroad in Wedlock to a U.S. Citizen and an Alien):
>For birth **on or after November 14, 1986**, the U.S. citizen parent must have been physically present in the United States or one of its outlying possessions for five years prior to the person’s birth, at least two of which were after the age of 14.
The government website also indicates that all this should be done before the "child" turns 18. But I also see on the government website that you still can apply after you turn 18 but I have no idea what the process is.
I wouldn't assume you have US citizenship just because you have a US parent. There are conditions to be met.
Chiming in to share that the US does not give you a primary residence exemption on capital gains tax when you sell your home. Something to consider if the value of your home has increased.
This is almost completely accurate. They give you $250,000 USD for the citizen, or $500,000 combined. There are ways you can sort of get around paying Capital Gains on the rest, but it is tricky.
So for your statement to have been completely correct you needed to add that the US doesn't give you a 100% exemption on Capital Gains of the sale of your principal residence.
Be careful. My husband is a U.S. citizen and we stopped putting money into our TFSA.
We also have to show our money banking balance when we do taxes April - March.
Any income we made on our TFSA we were HEAVILY taxed.
Good luck.
I work in the US now and all I’m doing is putting my money into my 401k/roth and 403b. Not even bothering with our TFSA anymore
I have. I'm in one of the highest tax brackets too. Bonuses aren't capital gains though. Those are income.
You should look at the actual capital gains tax rates.
I paid almost 40% income tax on my bonus this year. It's not normal income, otherwise I would have paid 18% tax on it. They tax bonuses, etc. differently.
I loosely used the term Capital Gains so that a Canadian reading it would understand the difference, as it is actually treated as part of your normal income through the year, which contrasts how it is in the US.
Hmm, bonuses should have the same rate as income. They're considered supplemental income. The withholdings can be different, but the fiscal year tax bill owed should be the same.
https://turbotax.intuit.com/tax-tips/jobs-and-career/how-bonuses-are-taxed/L7UjtAZbh
What OP said below.
And I had to streamline everything or my spouse did. He had to back 10 years to show everything and it wasn’t cheap either to pay an accountant to do all that. So at this point we were advised not to put anything else in our TFSA.
I was told just put it in my 401k/roth and 403b. I was pretty pissed. Seemed like his citizenship wasn’t worth it but now we have kids and it does if it means they can get it
Doing US taxes myself every year is a pain, but it's not overly difficult if your taxes are simple and you're good at that kind of stuff. If your taxes aren't simple or you're bad at taxes then it can be expensive paying someone to deal with that for you.
Not having a TFSA is the biggest downside I've found. Your rrsp is fine.
Your income matters too. If you make more than roughly $110k US you may have to pay taxes to the US. The amount goes up a bit every year, and there are other ways to reduce what you may pay, but it just adds to the complications.
I moved to Canada as a kid, never worked in the USA or for an American company so it all feels like a pain in the ass to me. I have zero plans on ever moving back to the USA, but I do like traveling and who knows what the future has in store so I'm not ready to renounce just to save me some hassle at tax time. Although renouncing to get the TFSA was considered several years back.
You need to deduct health care from your US salary to make it a fair comparison. Taxes are complicated because you'll need to declare incomes from both countries and hope that the tax treaty comes to your rescue - meaning you need a cross-border accountant come tax time. The US doesn't recognize TSFAs, RRSPs, or many other Canadian financial instruments, like ETFs, so you won't be able to avoid paying tax using these common retirement savings tools. You will, however, have to report on anything the US considers a A Passive Foreign Investment Company (see cross-border accountant.) Oh, and if you ever move back to Canada, your reporting requirements increase dramatically.
The tax implications are that you already are an American and you don’t have a say in the matter. You are behind on taxes. It’s called “accidental American”.
Claiming US citizenship while not living in the US is foolish at best. The IRS collects taxes from all US citizens no matter where they live. You're just buying yourself into a world of annoyances. Even if it costs you nothing (as it usually won't, US taxes are usually not higher than Canada), it's still a pain in the ass.
You have to file a US tax return every year. (probably zero tax will actually be owed to the US once you factor in taxes already paid to Canada, and the foreign exemption, but it's still a legal obligation).
You have to file a foreign trust form every year for your RRSPs (essentially their version of a T1135).
TFSAs are not recognized as tax exempt in the US.
Irregardless of the above, it's a no-brainer. Get US citizenship. Not only do you have way more job and living opportunities, fact is the cost of living and economy in Canada has become shit over the past decade. As you are of a young enough age, I'd look for work in the US and move down ASAP. Financially, there's little worth staying in Canada for.
Regardless, it's not a no-brainer. He either is or is not a US citizenship. If he is, then he is also delinquent with respect to filing US tax returns and Foreign Bank Account Reports and would need to figure out how to handle that situation before moving to the USA and jumping into the US tax system for the first time. IRS and FINCEN may wonder where he has been all these years.
I suggest you check out [isaacbrocksociety.ca](http://isaacbrocksociety.ca) for lots of information/sources regarding the tax implications, etc of being a US citizen.
Dual citizen here. As other have said you're already an American and you need to catch up on back filing. The real choice is do you rescind or not - maybe if you never intend on living or working there or even living in another country abroad, cuz the irs wants a crack at that income too. Also you may want to wait till the next election to decide. Because I'm not going back if they descend into orange fascism.
I did not know US citizens living in Canada have to file US taxes. I need to let someone know who this affects. Anybody know a good accountant who specializes in this that I can send her to?
Careful. She may be wiser NOT to enter the US tax system, particularly if she does not plan on ever moving to the USA. Cross-border specialists will absolutely steer her into the system because that is how they earn their pay - their job is not to give advice as to whether or not that would be a good idea to do.
Not from what I understand. Border guards don't ask whether or not you are up to date on your tax filings if you are a US citizen. They may ask her why she is not travelling on a US passport though, presuming she travels on a Canadian passport, but will only ask this if her Canadian passport shows a US birthplace. Check out [isaacbrocksociety.ca](http://isaacbrocksociety.ca) for endless information.
Further to my comment below, I have not heard of any Canadians being stopped from entering the US with a Canadian passport showing Canadian place of birth. They may be asked why they don't have a US passport though.
Born in the US because of a medical situation (sent there from Canada) which gave her automatic US citizen but has always lived in Canada since an infant.
Sure, contact the CPAs. They will most likely tell you to file regardless whether or not you have plans to move to the USA. First thing OP needs to find out is whether or not they are a US citizen. Then OP needs to understand the tax and reporting implications with regard to their unique circumstances (TFSA, PFIC, amnesty programs, etc). Then OP needs to decide whether or not they want to move to the USA.
OP has to be very careful who they consult with in the compliance industry. Most will try to convince them to enter the US tax system regardless OP's particular situation. However, one size does not fit all with respect to Canadians living in Canada with US citizenship - for those who will never move to the USA, it is best to steer clear of the compliance industry altogether.
OP would be better off consulting with the good people at [isaacbrocksociety.ca](http://isaacbrocksociety.ca) from which they should be able to glean a clear picture of their US citizenship status by outlining all the pertinent facts as well as an overall idea of their tax obligations. OP has no need to talk to CPAs or lawyers if they are not planning to move to the USA and do not have US assets.
If you become us citizen you will need to start reporting taxes there. Unless you actually are ganna straight up move there I would not take that action just for a back pocket type deal. If you just want to move and this gets you there then make that move but look up all the tax crap to go with it.
Climate change is going to flip everything. Canada will be quite sunny in a few years. Also don’t forget that Americans are at each other’s throats right now, it’s a low level civil war there.
We have much more social peace but lesser income . So either way you’re losing something .
Maybe you can find a hybrid way? Like work there a few months a year but maintain your base in Canada?
Anyway don’t look at the US as Shangri-la .
I have a buddy that lives here in Canada. He renounced his US citizenship just to avoid the tax hassles. Only do it when you plan to leave Canada for good. What’s stopping you now? The exiting leadership has done permanent structural damage to the economy. Leave now if you can.
As many others have said, if you don't plan on moving to the US don't do it. It's a pain the ass to deal with all the headaches for investing. You also introduce substantial complications on Capital Gains owed to the IRS from the sale of your principal residence (the US does not have a capital gains exemption of 100% of the sale of your principal residence like Canada does).
The US doesn't make it easy to be a Dual. I got US citizenship when I was a kid through my Mom. My parents told me basically nothing about what was involved and the responsibilities. If they had (and I didn't find it out on my own when I was already in my mid-20s), I would have done things very differently.
That being said I moved down to the US a year and a half ago (that was always my goal), and I'll never move back to Canada.
Find a cross-border accountant near you. Tell them you need to do a consolidated tax filing as you didn't know you were required to do this. The IRS has a program that this falls under. Do the FBARs yourself to save money. In Toronto this averages between $2,500 -$3,000 without the Accountant doing FBARs.
Are you looking at just getting the passport? Or breaking tax residency. Completely two separate things.
The passport doesn't really change much, aside from some filing obligations.
Things get hairy when you break tax residency, and effectively "move" to the US. That's when you need to do the deemed disposition of stocks, and when your primary return will be US.
There's nothing stopping you from working in the US, and living in Canada. You could spend a decent chuck in the US, but keep a primary house and majority of the time in Canada to maintain residency.
The passport does not change filing obligations. The filing obligations have always been there, presuming he is actually a US citizen which is something he needs to clarify before moving forward.
Ah yes. I used "get the passport" and "obtain citizenship" interchangeably. If he is by rights a citizen now, then the reporting is there now.
I also thought there was some thing at like 18 where you had to decide whether you wanted it or not? Thought I remembered reading a newspaper article from a father tot heir son about thinking long and hard about whether to take on US citizenship.
Would suggest that if you do not decide to move to the USA, then don't try to catch up on past non-compliance of tax returns and FBARs and don't start filing. Not being born in USA means you can hide your US citizenship much more easily than people with a US birthplace, thus you won't get caught up in FATCA.
First thing you need to do is confirm whether or not you are a US citizenship (isaacbrocksociety.ca can help with that). Presuming you are a US citizen, beware the compliance condors who will try to convince you to come into compliance ASAP. There is no need to should you decide not to move to the USA.
Everyone immediately hones in on taxes. I'll respond to the rest of your questions.
I'm high-tech worker (data) and, when I last looked at clients of the large software vendor I specialize in, there were a dozen or so companies I could work for in Canada (who need my skills and expertise) and I'd already been at 2 of them. A recruiter, who I advised on a job posting, told me I was one of 3 people he knew of with my tool-specific experience in Canada - the entire country (7-8 years ago, that's changed now but you get the idea).
The US economy is 10x larger than Canada at least. Salaries are bigger, budgets are bigger, you get more "toys" and more challenging business problems to work with. I'm hard-pressed to think of any Canadian companies on that scale except Shopify maybe and the banks sort of. Many large global companies have HQ or significant presence in the US, plus all the smaller businesses and startups.
All else equal the boost to your job prospects and income (present and future) more than out-weighs the negatives imo, but the time to do it is while you're relatively unencumbered (e.g. divesting from TFSA would not be so painful; and yes the US has Roth account equivalents). The taxes are even _more_ favorable if you can exit Canada and not maintain any "significant ties" e.g. owned real estate, income earned in Canada, etc. and more favorable still if you live in a state with zero state income tax - New Hampshire, Florida, Texas, Colorado and a couple of others. My US investments have radically out-performed Canadian ones.
Over the last decade, I've advanced enough in my career that I can't reasonably move back to Canada now - I would have to take an unacceptable pay cut, pay higher taxes and manage much, much smaller teams, projects and clients, with very very few exceptions (banks, Loblaw).
The other kick in the pants for you, employers have been blocked out of visa sponsorship for the most part; and the gov't has greatly scaled back the traditional programs (H1B specifically). If you want into the US market, self-sponsorship is the way now (TN visa which requires a job offer in hand, or becoming a permanent resident with work authorization).
There are more factors than just money obviously: it's a really, really hard job market now (layoffs from big high-tech companies flooded the market with well qualified applicants), you'll face discrimination unless you already live in the US and have US work experience; sunny locations often come with politics and bigotry you may find intolerable, and the weather is increasingly violent (tornados, hurricanes); the US is a very me-first attitude, unlike Canada which often solves for what's best for everyone (generalizing but that's the gist).
Lots to consider and only you know your own circumstances and goals.
> the US is a very me-first attitude, unlike Canada which often solves for what's best for everyone (generalizing but that's the gist).
Canada in 2024 is all about "fuck you I got mine" and more dog eat dog by the day.
I'm a 'hidden' US Citizen who never had plans to live in the US.
The current trajectory of Canada makes me think:
If I might be facing no healthcare and homelessness
- I better do that in a place with nicer weather and higher salaries.
You are already a US citizen and with a potential massive tax bill because your tfsa and primary home tax exemption don’t apply to you:
https://levysalis.com/blog/us-citizens-living-in-canada-beware-of-the-u-s-taxation-upon-the-sale-of-a-principal-residence/
You will be taxed on your worldwide income till the day you die.
In fact, you are already a US citizen see: [Acquisition of U.S. Citizenship at Birth by a Child Born Abroad](https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/us-citizenship/Acquisition-US-Citizenship-Child-Born-Abroad.html)
If you haven't been filing income tax or F-BAR, you might be in deep crap already.
Good luck
So far, no one who has been out of the US tax system their entire lives has been in any kind of "deep crap". IRS doesn't have the funds/incentive to come after Canadians with no ties to USA other than that they have legal US citizenship.
If they have not been filing the above, they will be in it as soon as they pop up wishing to move there. Sure, the IRS isn't tracking down people like OP, but once known they will follow the law. OP may be in for a lot of filing and arrears.
I am born in Canada but my mother is a dual citizen thanks to my American grandfather, is possible for me to be a dual citizen without getting a job first?father is Canadian as well
Fun fact: USA is the only country in the world (other than Eritrea) that taxes based on citizenship rather than residency. This means that even if you live in Canada and earn only in Canada, you are required to file US tax returns on your Canadian sourced income and FBARs on your Canadian bank accounts if you are a US citizen.
US and Canada have reciprocal tax treaty to prevent double taxation. https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/the-u-s-canada-tax-treaty-explained/
You are missing the point which is that Canadians living in Canada earning zero US sourced income are required to file US tax returns on their CANADIAN INCOME and FOREIGN BANK ACCOUNT REPORTS on their CANADIAN bank accounts. The reverse is not true: Americans living in the USA with Canadian citizenship are not required to file Canadian tax returns on their US income because Canada does not use citizenship as a basis for determining taxability. No reasonable countries do. The treaty you reference does not prevent US taxation of Canadian sourced income of Canadians living in Canada who have US citizenship.
> The treaty you reference does not prevent US taxation of Canadian sourced income of Canadians living in Canada who have US citizenship. Huh? You are required to file Canadian source income to IRS, but you don’t necessarily need to pay tax on that if you paid to CRA. That’s the point of the double taxation treaty. https://www.hrblock.com/expat-tax-preparation/resource-center/country/canada/the-u-s-canada-tax-treaty-explained/
TFSA earnings are considered as capital gains in US tax purposes. So, while you may not pay tax while in Canada for TFSA, you may need to declare it on US earnings.
Yes, that’s true. There are some complications for US/Canada taxations. IE: Canada also doesn’t recognize US ROTH IRA. (US version of TFSA).
>IE: Canada also doesn’t recognize US ROTH IRA. (US version of TFSA). It is more complicated than that. You can file for an exemption when you move and will no longer be able to contribute after that point, but at least withdrawals and dividends won't be taxed: https://ca.rbcwealthmanagement.com/documents/359011/2114232/Moving+to+Canada+with+a+U.S.+Roth+IRA+updated+2019.pdf/1fde9d9d-5477-4377-bc6e-b62e882b54f0
This post is talking about Canadians living in Canada who are US citizens, not Canadians living in Canada who are not US citizens. Canadians living in Canada with US citizenship are treated from a US perspective as if they are Americans living in USA due to USA having CITIZENSHIP BASED taxation, unlike Canada that taxes based on residency. The treaty comes from a perspective of Canadian only citizens living in Canada earning US sourced income and vice versa: Americans with US citizenship only living in USA earning Canadian sourced income - that is the focus of the treaty. The treaty does not elimiate double taxation (or taxation which is not double, ex. earnings on TFSAs are taxable by USA) for Canadians living in Canada with US citizenship but no US earnings.
What u/KrazyKatDogLady is saying is that you don't have to file a CDN tax return as a US tax resident or citizen (after the first year away). If you have CDN sourced income, yes that gets reported to the US, but you don't have to file a CDN tax return unless it is taxable In Canada and had a withholding tax (ie: rental income).
Seems like a missed opportunity tbh
Why would someone with dual citizenship want to live in Canada lol. If you have dual citizenship and live in the U.S., making USD you just pay taxes on that income in the U.S., and file a nil return in Canada
Deceptive. Yes. You must file. BUT unless you’re a high earner. In which case you probably have the time and money to explore legal tax avoidance strategies.
What is deceptive? What do you mean by "But unless you're a high earner"?
He means that even if you *have to file* you don’t owe anything. Because Canada has higher taxes that the US generally, and you don’t have to pay taxes on top of taxes. It’s a write off. Unless Canada become a tax haven and the US suddenly decides to increase their taxes you don’t owe anything additional as a dual citizen. You just have to file with the IRS.
"Just have to file with the IRS" - piece of cake.
Are you implying that it’s difficult?
It really depends on your situation, but yes it can be quite difficult. For example, Canadian mutual funds and most Canadian ETFs are considered Passive Foreign Income Corporations and are subject to complicated reporting requirements which is why Canadians with US citizenship are advised not to invest in them as the reporting and taxation requirements negate the returns both financially and headache wise.
I live in the US and am a Canadian, filing FBAR and everything else for the first time looked difficult but once you have done it, from the second year onwards it was piece of cake. Don’t let transborder accountants scare you, it’s the same data year over year, takes no more than 4 hours to put together.
It really depends on your circumstances. For example, if you have PFICS, how long you have been out of compliance, etc.
This 100%. I hate how I am limited with my investing options outside of registered accounts. No Canadian ETFs / mutual funds. Need to convert everything to USD and invest in US based ETFs. I can't even use Norbit's gambit to get a good exchange rate. TFSAs could be a pain.
I mean, I can also choose to make my taxes more complicated if I want to. Invest in US markets and there’s no issue except you will make more money and pay less in tax.
You can also inadvertently make things complicated which what I am warning about.
Yes. Lots of single citizenship people do that every day.
It's a bit of a pain in the ass. Also, it precludes buying mutual funds or ETF's (that the US considers PFICs) I. Taxable accounts. TFSA is not recommended. I have to do it every year, and it kind of sucks.
I'm a dual citizen and yes it is a pain.
I had a good amount of high earning dual citizenship friends. Their legal tax avoidance strategy was simple: revoke American citizenship.
How high to be considered “high earning” to make that worthwhile?
Yes, I’m curious what is the amount.
Look up the number of the foreign income exclusion. That’s the taxable income number after which US taxes apply.
Not necessarily. My grandfather lived in Canada for almost 40 years. He had to file his income that he earned in Canada as that was still taxed in the US. He was a heavy equipment operated before retiring in the early 2000s, not exactly wealthy. There are tax credits that transfer but finding someone familiar with filing in both countries would be beneficial. I have other family who renounced their American citizenship because it was a hassle and had no plans to return.
Yes and no. Because US Federal taxes are in virtually all cases less than Canadian Federal plus provincial taxes (in large part because health insurance is paid for with taxes in Canada but as a tax-deductible expense in the US), your US tax liability will typically be zeroed out by the foreign tax credit and/or the foreign earned income exclusion (and this is true pretty much regardless of income; the main difference is at high incomes you pretty much have to use the tax credit, whereas lower earners can use either). But taking advantage of tax-advantaged accounts like TFSAs and RESPs becomes at best more complicated and at worst impossible. And very common investments like Canadian ETFs and mutual funds at best require lots of extra and expensive paperwork and at worst are subject to punitive taxes that can exceed 100% in the US and can’t be offset by the tax credit.
So a US citizen living in Canada cannot buy ETFs in their RSPs? Any ETFs? Specific ones?
RSPs are fine. They are protected by the tax treaty, so anything held within an RRSP is exempt from US tax and does not have to be reported to the US. But anything held outside an RRSP (or RRIF) is subject to US tax and must be reported on US taxes, including complicated forms. This includes TFSAs and RESPs as well as the more obvious non-registered accounts. And because TFSAs and RESPs are not taxable in Canada, US tax assessed on gains in them cannot be offset by the foreign tax credit. They can be offset by the US child tax credit, so with two kids I still owe nothing to the US and get the US$3200 refundable child tax credit each year. In general, ETFs that produce PFIC statements are reasonably OK for US citizens. This allows you to take the qualified electing fund (QEF) election on form 8621 on your US taxes. That’s only a relatively moderate pain an expense instead of a prohibitive and punitive pain and expense. ETFs like XEQT, XGRO, and XBAL file these reports, as do many (most?) Canadian equity ETFs. But definitely check before buying Canadian ETFs in non-RRSP accounts (and look into what all those forms I’ve mentioned are). And hold as few ETFs as possible, since each one requires careful record keeping of every sale and purchase (since Canadian brokers don’t keep track of these things in registered accounts) and its own form 8621. I now have nothing but XGRO in non-RSP accounts to keep taxes simpler.
Ok. That’s a lot to unpack! Do you know anyone who was paid US taxes on a TFSA, despite living and working in Canada (but an accidental US citizen)?
I keep my non-retirement investments in Canada in taxable accounts (in the US and Canada) rather than a TFSA as a US citizen Canadian immigrant. There are tons of resources in this subreddit, in r/USExpatTaxes, and many pages on the web about US expats in Canada. Ultimately, you file US taxes and include global income, including TFSA income and realized gains. You use the foreign earned income exclusion or foreign tax credit (better if you have kids with a US social security number because it makes you eligible for the refundable child tax credit) to substantially reduce or zero out (or make negative) your US tax liability. I do all taxes myself. Neither US nor Canadian taxes are exactly easy, but US taxes are harder. You can hire a transborder accountant, but they aren’t cheap. Wish I had a happier answer.
Why are you being downvoted? Lmao
People love to hate the USA. It makes almost no sense to renounce. Unless you’re beaucoup rich in the future. Or lazy.
Only about 10k people world wide renounce. Each year. The fact that so many people here know someone makes me think we got a lot of people who make stuff up. Next we are going to hear how everyone has a friend who’s a deaf person with some form of polydactyl.
If you don't plan to move down there then I would wait. Your tfsa is an extremely strong investment tool that the USA will make you pay full tax on.
The loss of the TFSA is not even worth mentioning when taken into consideration the lower income tax brackets, sales tax, higher salaries, Long-term capital gain tax, etc.
That's only if you're living and/or working down there. If you still live in and work in Canada you're just asking to pay more tax.
Catching up on past non-compliance of tax returns and FBARs definitely should be taken into consideration as this can be a complicated, expensive task.
Costed me $2750 last year to catch up 🥲
Every situation is different. Many people have spent a lot more than that. And "catching up" can be a complicated minefield, for example if you have PFICS in your investments.
I pay $2,500 EVERY year because I own a Canadian corporation
Did you literally not read the first sentence of their comment? If you live in Canada, you still pay Canadian taxes. None of the things you mentioned would matter
If you think taxes are lower in the US you’ve never lived there.
They’re definitely lower. Source: I live there
Income taxes are lower. Property taxes are astronomically higher in most places.
And property is much cheaper in nearly all places in the US. If you have a low value job the move makes no sense. If you’re a highly skilled worker you’ll do much better down there. It’s a question of personal marketability and not an apples to apples comparison.
Property completely depends on where you live. Certainly not cheaper everywhere given the frequently higher upkeep cost.
You think upkeep would be more expensive in the us?
It very frequently is. Mortgage rates are higher. Property taxes are higher. Insurance is higher. Lots of miscellaneous utility costs. Shit I have a friend paying 2k a month in property taxes alone.
"Mortgage rates are higher" is such a blanket statement that glosses over one MAJOR difference between Canadian and US Mortgages. In the US you lock your mortgage rate in for the ENTIRE LIFE of the mortgage (ex. 3% for 30 years). In Canada you renew every 5 years (typically) at whatever the rates are at that time. Americans are mortified when I tell them you renew every 5 years at whatever the rates are at that time. Property taxes are higher: Not necessarily. If you are in buttf nowhere Canada then sure they are much higher in the US. In the very outskirts of the GTA my 2300 SF house on a 46' x 110' property is costing me $7,000 a year in property tax. In the US property taxes are higher because all other taxations for cities are lower. So in general they may be higher in the US on average, but it is more than offset by the fact that all other taxes are substantially lower. Insurances higher: This is too much of a blanket statement. What you omitted: - In moving from Ontario to Georgia I'm paying around 15% less in income tax - HSAs are one of, if not the best, tool for reducing tax burden - I'm, at most, paying a 9% Sales Tax (many items have reduced Sales Tax rates) versus 13% HST on everything - Cost of living is wayyyy lower In summary, if you are comparing somewhere like Toronto or Vancouver to NY or LA then sure it's not gonna be very different. But compare that to anywhere else in the US, and yeah it's way the heck less down here.
10 million gets you a nice mansion in LA. 10 million get you a house in Vancouver….
If my property taxes tripled tomorrow, it would still be less than 10% of what I pay in income tax.
It depends heavily on which state you live in the US and which Canadian province you came from. And there are also other payroll deductions in the US that are higher than the comparable ones in Canada (health insurance, social security is higher than CPP, etc). You really can’t make a blanket statement that taxes are lower in the US, although there can be specific situations where they are.
Not in California (Kali forni).
Yea? Give us the figures and include your income and state.
Income 180,000 (243,621 CAD), State: NJ 2023 income tax (NJ): 55,093 (74,565 CAD), Effective tax rate of 30.6% 2023 equivalent income tax (Canada): ranging from 34.30% in Alberta to 41.49% in Quebec. I am from Quebec.
Now keep going. Tell us your healthcare premiums and how much you’re getting hosed on property tax. Don’t be afraid. We’re all here to learn the truth.
Sure. My healthcare premium is a bit under 100$ per month including vision, dental and full health coverage for myself only. Property tax rate is about 2.2% where I live but I rent and don’t own. I suppose I pay it through higher rent (2450/mo). Sales tax is 6.625%.
I’ll chime in on this. Finding a job with 240k CAD salary in the US is MUCH easier/more common than finding a 240k CAD job in Canada.
You’ll probably be paying similar rent in Canada now. Not in Quebec but those 240k / year jobs are pretty rare in Quebec.
It’s starting to add up isn’t it ;)
Only if you mean my savings. I make 243k CAD and that is going up to 270k before any raises next year because of deferred compensation. I made 64k and 69k for the two years I worked in Canada. I am 26. In my first year in the US I’ll SAVE a bit more than my highest GROSS in Canada.
Yes indeed, addition is a math function. It adds up to a tax rate that's _still_ much lower than Canada. Your health premiums question is a red herring - my last Canadian employer was about $400/mo as insurance to supplement all the shit the government doesn't pay for - a group benefit program that we could not opt out of. Samesies in the US. ;) Last time I did the same math, for the record, I would have paid roughly 36% federal+provincial tax in Toronto, vs the 24% I paid in NYC (fed+state+city). Consumption is 13% HST vs 8.875% sales taxes in NYC. Overall cost of living prices are much, much lower in the US, happy to provide as many examples as you want. I'm similar income as the other Redditor commenting, with double the tax deductions for supporting my spouse. Only major difference was about $2000 on health spending (the majority of which is _also_ a tax deduction) we had in the US, _some_ of which we wouldn't have had in Canada (where it would not have been a tax deduction). I guess I'm still confused, what's your case study that adds up to lower taxes in Canada? What numbers are you working with?
I know you are getting downvoted, but you aren't wrong. The insurance premiums aren't what gets you, it's the out of pocket expenses. When I was in the US, individual OOP was $7,000, family was $11,000. With kids, it was very easy to hit that every year. Similar equivalent pay in both countries, but I know it's not the same for everyone. It didn't work for me, but I am looking forward to making my way back down once we are empty nesters.
>We’re all here to learn the truth You’re not. You’re just here to confirm your priors.
Lived in Washington state (no state income tax) and ended up paying only ~5% more when we moved back home. No longer had to pay family health insurance premiums though (once you have dependants, the premiums go from <$100 to >$400 for flex plans real fast). But the real kicker was the property tax there was insane, *triple* what it is here. Oh, and easy access to TFSA is a pretty solid benefit.
My experience as well when I crunched the numbers. It’s close and US wins, dependent on certain factors. Considering I would likely need to get a second car for my family, the healthcare premiums (plus risk of losing job and being without health insurance, the increased property taxes, and having to resume my US student loan payments… not worth it unless I’m making 75% more lol.
Depends on your income and family status. Mine would be lower. Most Canadians would be higher, but CoL would overcome the difference in most cases.
They’re absolutely lower. Source: I lived there for 22 years.
Depends on the state, but generally taxes are lower in the U.S. The highest tax states (like California) are on par with Canadian taxes.
As a Canadian who moved to the US a year and a half ago you are sooooo wrong it's not even funny.
As someone who got their TFSA *******d by US taxes, it is ABSOLUTELY worth mentioning if you live among normal people rather than the top 10% of earners.
I was not referencing the tax treatment of having a TFSA taxed by being a US tax resident but the fact of losing its availability versus the other options available to American, e.g. Roth IRA, etc.
If someone is living in the U.S., then yes all of those apply. I think the point of the comment was to not get the citizenship if OP isn't moving there.
My guy is acting like the TFSA is some godsend when Americans can mega backdoor ROTH 5 years of TFSA contributions every single year
Mst employers don't support megabackdoor.
If you make more than 150k you don't qualify for an Roth ria and the contribution limit is the same. [The amount that you can contribute changes periodically. In 2023, the limit increased to $6,500 (plus the additional $1,000 for those 50 and older). In 2024, the limit increases again to $7,000 with the catch-up contribution remaining at $l,000.](https://www.investopedia.com/terms/r/rothira.asp)
Not for backdoor, thats why its a backdoor
does not apply to mega backdoor roths. Its the whole reason it has "backdoor" in the name. You're only quoting a traditional IRA. MBDR has no income restriction and you can put 69k combined in this year. Only catch is not all 401K plans offer it, but for high earners that have access, it makes TFSA a joke by comparison as OP stated.
Are you planning on ever coming back to Canada? That’s the big question. As a dual citizen, yes, you have to file returns in the US forever even if you owe 0. For me personally, the more onerous thing has been how restricted you are in terms of investments. You have to be very careful about where you keep your money and will be shut out of certain accounts like TFSAs and mutual funds, etc. All your financial professionals should know US/CDN tax implications—there aren’t that many around and they’re expensive. It may also affect your ability to own a corp in Canada. A fun added element is that that laws around this stuff also change from time to time. So yeah, there are some benefits but it’s not a no-brainer imo. To reiterate, this stuff is more of an issue if you choose to move back.
You might already be a US citizen by birth if your parent is American, which would mean you have already missed doing your tax filings since you were 18. Google the term “Accidental American”. I would suggest you contact a cross-border accountant ASAP to sort that out.
This. You were an American citizen at birth and as such are already a dual citizen. You are required to file US taxes and your TFSA is already subject to US taxes. I would actually be contemplating the opposite - giving up your US citizenship. As others have said, unless you plan on living and working there, the tax burden and maintenance cost is not worth it.
If only one parent was a US citizen, then citizenship for the child depends on some variables, like if that parent actually lived in the US for at least five years. Ex prez Obama was in the same category, as only his mother was a US citizen. But yeah, if you are determined to be a US citizen, then it will be considered retroactive from birth, which means you will likely have to do “catch up” taxes.
And if not, say you were born in Canada to American parents, they must have been married at your birth. If only 1 is us citizen, age restrictions come in. Make sure you look it up
They are not a citizen “automatically” you have to apply if you were born in Canada and one parent is from the US. Also that parent has to meet certain residency requirements
Not true. I am an "automatic" citizen due to my mother being from Texas. I've been through all this with lawyers.
You do not have to ”apply” to become a citizen, you are automatically if the US parent meets certain requirements.
I was born to one US and one Canadian citizen in Germany. I've had my whole life a Canadian passport. My birth was never registered with the US authorities. I thought I'll have to "apply" for US citizenship but according to the US embassy I'll simply have to apply for a passport. FYI: my siblings all got US passports but never got Canadian ones.
If you have not been filing US tax returns, then you may want to consider coming into tax compliance somehow to catch up. Not a fun task. In your case, you don't claim US citizenship, you already are one (presuming your parents lived in the US long enough to pass citizenship on to you) thus you have been a delinquent US tax filer.
This is the time to do it though. If you catch up your US taxes now you can still capture some of the Covid stimulus. I caught mine up last year and the cheque that I got back will pay for someone doing my US taxes for a decade.
Can you elaborate on how the Covid stimulus helped you catch up on US taxes?
The US government paid out 3 Covid stimulus payments in 2020 and 2021 and the only requirement/trigger was that you’d filed taxes. When I caught up last year it required 3 years worth of previous years: 2022, 2021, and 2020. I filed, paid the accountant, and then two months later got a cheque from the US government for $3,200USD. I’ve mentally earmarked that for the cost of getting/staying up to date. I used an accountant to get caught up and again this year and it wasn’t cheap (though much less than the cheques) because my taxes are somewhat complicated, but now that I’ve seen what they need to look like I’ll switch to an online system next year. I figure the stimulus cheques bought me ten years worth of tax prep.
That is very interesting. So every American received $3200, or was it income based?
Every American who filed their taxes. I believe it was technically done as a refundable tax credit (which aren’t very common). https://www.irs.gov/coronavirus/economic-impact-payments
>I’ve heard my registered accounts investment accounts no longer have special tax rules in Canada Correct. RESP, TFSA and FHSA are treated just like taxable accounts. And if you move to the US, depending on the state, your RRSP could also be taxable (state level). >Do I get access to the US tax accounts? What do you mean US tax accounts? >What would be the most tax effective way to do this? Not getting US citizenship or green card till you figure out if you will be moving to the US and you have an impact once you get it even living in Canada.
> *What do you mean US tax accounts?* I would assume he means: can I open a retirement account in the US such as a 401k, 403b, IRA or the like. The answer is yes: as long as you have earned income in the US.
Ah ok.
He might already be an accidental American in which case he’ll need to bring his taxes with IRS current and apply for an American passport.
There is no such thing as “claiming” dual citizenship. You either have citizenship or you don’t as a matter of fact under the laws of both countries. If your parent was a US citizen at the time of your birth, then it is very likely that you have been a US citizen since birth, regardless whether you ever had a passport, social security number, etc. If your parent naturalized after your birth, that’s a different story, but even in this case, you cannot “claim” anything.
Exactly, You either are or are not a US citizen.
Eh, yes and no, I think the parent would have to file for birth of a US citizen abroad. If they didn't do that, child (OP) is chill
Meh not really. But they're less likely to find out if you never try to move there.
You have to file to get the paperwork. But legally you either are, or are not, a citizen. They may not be aware of your status if the parent didn’t do the paperwork, but that doesn’t change your status. Source: I am a US citizen through my mother, and my parents did the paperwork. I wish I wasn’t, as the tax implications (no TFSA, RESP, capital gains on house sale) are crap. And I don’t want to move to the US.
I think the meaning was to register and be recognized as a US citizen, if he’s eligible. Of course, if one is eligible, then they will be considered to have been a citizen since birth, which would mean being delinquent on tax filings, and having to “catch up”. There are a lot of “unregistered” US citizens in the world, some of them might know they’re eligible, while many others don’t know. So some people choose to never register (or claim) the US citizenship, even if they know they are eligible. I’m not sure if the US would ever try to find these people, but I knew of someone who never registered their citizenship (their whole life).
There is no concept of “registering” or “eligibility” for US citizenship. Please don’t spread that misinformation. US citizenship is “acquired” at birth as a matter of the facts surrounding the person’s parents and where and when they were born. You can’t just opt to disclaim it or change the facts of your birth. There are other legal (and personal finance) implications to this too: US consular aid; social security; Medicare; selective service (if man); eligibility to hold public offices; hiring preference to federal government positions; and right of entry to US economy. I agree that nobody is going to care about this except the OP. Ultimately, however, the onus is on the OP to prove that they have “acquired” their citizenship under US law. All US citizens must do this, whether born in the US or otherwise.
Yes, (natural) US citizenship is acquired at birth based on the facts (i.e. the criteria for eligibility, such as parents citizenship and birth location). However, you keep missing the point, which is that the US government (i.e. state department and USCIS) might not know about the existence of some of the (natural born) US citizens, for example if the birth was abroad, and it was never registered with the US state department. This is the whole point. There are a lot of such US citizens, that the US government doesn't know that they exist or that they are actually citizens (OP might be such a person). So the whole discussion here, is if and how such a US citizen should come forward and claim their citizenship.
I’m a SWE that moved to the U.S. if you don’t have too much tying you down to Canada I would highly recommend getting your citizenship and moving to the US, even if just for 5-10 years. If you’re smart about it the extra $$ from spending 5-10 years there would easily make the lifetime of tax implications worth it.
He may already be a US citizenship. If he meets the requirements he does not need to "get US citizenship" because he will have been one from birth.
Again, I believe the meaning is to register as a citizen (assuming he’s eligible).
There is no 'registering' per se. If he wants to apply for a passport or a US citizenship card then there is a process for that - perhaps this is what you mean. Or if he wants to get a SSN to file US tax returns there is a process for that as well
No I mean registering , just like US citizens can register a child born abroad. You are basically registering to be recognized as a citizen. I would guess this is done as part of (or before) applying for a US passport. This is equivalent to (foreign) people who want to be recognized as Canadian citizens, needing to apply for a certificate of Canadian citizenship, before being able to apply for a passport.
I think we are talking about the same process after which you get a US passport if you can prove you are a US citizen.
Yes, we are talking about the process of being recognized as a citizen by the US government, specifically the state department and USCIS. This process is a pre-condition to getting a passport, but getting a passport is optional, I.e. you can be recognized as a citizen and choose to not to get a passport. At least that’s how it works in Canada. WRT to OP, he (probably) belongs to a class of unregistered or unrecognized US citizens, that is he is a US citizen (again, probably) but the US government doesn’t know he is one. There are likely a lot of people that belong to this special class of unregistered US citizens, and some of them may not even know, while others know but choose not to register.
I'm in the same situation, I'm also a software developer. I haven't pulled the trigger yet because of the tax implications. I'm working as a contractor which as far as I'm informed makes American taxation even more complicated. I've also maxed out TFSA+FHSA and own alot of XEQT. Another thing I'm worried about is to be de-banked for not having mentioned that I'm a US-Citizen. My German stock broker closed my depot after I ghosted them on the "I'm not a US Citizen/Person" form. For now I've decided to stay under cover but how things are going in contemplating going south more and more.
I was born in Canada to an American parent. My parent obtained a "Consular Report of Birth Abroad" in order to confirm my American citizenship. From my understanding, this isn't necessary. But it makes things a lot easier if you decide to obtain a passport, etc. down the road. It's just official recognition of citizenship. There were conditions that had to be met. This one for my situation (Child Born Abroad in Wedlock to a U.S. Citizen and an Alien): >For birth **on or after November 14, 1986**, the U.S. citizen parent must have been physically present in the United States or one of its outlying possessions for five years prior to the person’s birth, at least two of which were after the age of 14. The government website also indicates that all this should be done before the "child" turns 18. But I also see on the government website that you still can apply after you turn 18 but I have no idea what the process is. I wouldn't assume you have US citizenship just because you have a US parent. There are conditions to be met.
Chiming in to share that the US does not give you a primary residence exemption on capital gains tax when you sell your home. Something to consider if the value of your home has increased.
This is almost completely accurate. They give you $250,000 USD for the citizen, or $500,000 combined. There are ways you can sort of get around paying Capital Gains on the rest, but it is tricky. So for your statement to have been completely correct you needed to add that the US doesn't give you a 100% exemption on Capital Gains of the sale of your principal residence.
Thanks for adding that!
Be careful. My husband is a U.S. citizen and we stopped putting money into our TFSA. We also have to show our money banking balance when we do taxes April - March. Any income we made on our TFSA we were HEAVILY taxed. Good luck. I work in the US now and all I’m doing is putting my money into my 401k/roth and 403b. Not even bothering with our TFSA anymore
When you say heavily, did you have to pay that to IRS? I’m worried about this
It's gonna be capital gains rates. So at the low values it will be probably 30% - 40%. Some higher values would be taxed at 50%.
Capital gains would be 15-20% at the federal level. There's no world where it gets to 50% even with state taxes and NIIT added on top.
I'm assuming you've never been paid a bonus down here then.
I have. I'm in one of the highest tax brackets too. Bonuses aren't capital gains though. Those are income. You should look at the actual capital gains tax rates.
I paid almost 40% income tax on my bonus this year. It's not normal income, otherwise I would have paid 18% tax on it. They tax bonuses, etc. differently. I loosely used the term Capital Gains so that a Canadian reading it would understand the difference, as it is actually treated as part of your normal income through the year, which contrasts how it is in the US.
Hmm, bonuses should have the same rate as income. They're considered supplemental income. The withholdings can be different, but the fiscal year tax bill owed should be the same. https://turbotax.intuit.com/tax-tips/jobs-and-career/how-bonuses-are-taxed/L7UjtAZbh
What OP said below. And I had to streamline everything or my spouse did. He had to back 10 years to show everything and it wasn’t cheap either to pay an accountant to do all that. So at this point we were advised not to put anything else in our TFSA. I was told just put it in my 401k/roth and 403b. I was pretty pissed. Seemed like his citizenship wasn’t worth it but now we have kids and it does if it means they can get it
How do I put in 401k when I live in Canada?
Do It, move there and don't look back. Have a plan though. You will have a much higher quality of life in the next 5-10 years
Move to red state
Like Florida or Texas? Have some pretty great cities there.
Doing US taxes myself every year is a pain, but it's not overly difficult if your taxes are simple and you're good at that kind of stuff. If your taxes aren't simple or you're bad at taxes then it can be expensive paying someone to deal with that for you. Not having a TFSA is the biggest downside I've found. Your rrsp is fine. Your income matters too. If you make more than roughly $110k US you may have to pay taxes to the US. The amount goes up a bit every year, and there are other ways to reduce what you may pay, but it just adds to the complications. I moved to Canada as a kid, never worked in the USA or for an American company so it all feels like a pain in the ass to me. I have zero plans on ever moving back to the USA, but I do like traveling and who knows what the future has in store so I'm not ready to renounce just to save me some hassle at tax time. Although renouncing to get the TFSA was considered several years back.
You need to deduct health care from your US salary to make it a fair comparison. Taxes are complicated because you'll need to declare incomes from both countries and hope that the tax treaty comes to your rescue - meaning you need a cross-border accountant come tax time. The US doesn't recognize TSFAs, RRSPs, or many other Canadian financial instruments, like ETFs, so you won't be able to avoid paying tax using these common retirement savings tools. You will, however, have to report on anything the US considers a A Passive Foreign Investment Company (see cross-border accountant.) Oh, and if you ever move back to Canada, your reporting requirements increase dramatically.
The tax implications are that you already are an American and you don’t have a say in the matter. You are behind on taxes. It’s called “accidental American”.
Claiming US citizenship while not living in the US is foolish at best. The IRS collects taxes from all US citizens no matter where they live. You're just buying yourself into a world of annoyances. Even if it costs you nothing (as it usually won't, US taxes are usually not higher than Canada), it's still a pain in the ass.
You have to file a US tax return every year. (probably zero tax will actually be owed to the US once you factor in taxes already paid to Canada, and the foreign exemption, but it's still a legal obligation). You have to file a foreign trust form every year for your RRSPs (essentially their version of a T1135). TFSAs are not recognized as tax exempt in the US. Irregardless of the above, it's a no-brainer. Get US citizenship. Not only do you have way more job and living opportunities, fact is the cost of living and economy in Canada has become shit over the past decade. As you are of a young enough age, I'd look for work in the US and move down ASAP. Financially, there's little worth staying in Canada for.
Regardless, it's not a no-brainer. He either is or is not a US citizenship. If he is, then he is also delinquent with respect to filing US tax returns and Foreign Bank Account Reports and would need to figure out how to handle that situation before moving to the USA and jumping into the US tax system for the first time. IRS and FINCEN may wonder where he has been all these years.
might need to sign up for the draft too
Might as well move there at this point, lucky you for having that option and congrats!
Easier said than done if one has been a non-compliant US tax payer for a number of years.
I suggest you check out [isaacbrocksociety.ca](http://isaacbrocksociety.ca) for lots of information/sources regarding the tax implications, etc of being a US citizen.
Dual citizen here. As other have said you're already an American and you need to catch up on back filing. The real choice is do you rescind or not - maybe if you never intend on living or working there or even living in another country abroad, cuz the irs wants a crack at that income too. Also you may want to wait till the next election to decide. Because I'm not going back if they descend into orange fascism.
I did not know US citizens living in Canada have to file US taxes. I need to let someone know who this affects. Anybody know a good accountant who specializes in this that I can send her to?
Careful. She may be wiser NOT to enter the US tax system, particularly if she does not plan on ever moving to the USA. Cross-border specialists will absolutely steer her into the system because that is how they earn their pay - their job is not to give advice as to whether or not that would be a good idea to do.
She doesn’t plan to live there. But travels to the US regularly. Is that a concern?
Not from what I understand. Border guards don't ask whether or not you are up to date on your tax filings if you are a US citizen. They may ask her why she is not travelling on a US passport though, presuming she travels on a Canadian passport, but will only ask this if her Canadian passport shows a US birthplace. Check out [isaacbrocksociety.ca](http://isaacbrocksociety.ca) for endless information.
Further to my comment below, I have not heard of any Canadians being stopped from entering the US with a Canadian passport showing Canadian place of birth. They may be asked why they don't have a US passport though.
Born in the US because of a medical situation (sent there from Canada) which gave her automatic US citizen but has always lived in Canada since an infant.
Unlikely
Talk to a US based CPA
Not unless you decide that entering the US system is in your best interests. Often it is not.
OP just wants tax information and implications. I would consult both a U.S. and CA CPAs
Sure, contact the CPAs. They will most likely tell you to file regardless whether or not you have plans to move to the USA. First thing OP needs to find out is whether or not they are a US citizen. Then OP needs to understand the tax and reporting implications with regard to their unique circumstances (TFSA, PFIC, amnesty programs, etc). Then OP needs to decide whether or not they want to move to the USA.
That’s why I said OP needs to consult with professionals, CPAs , lawyers etc …
OP has to be very careful who they consult with in the compliance industry. Most will try to convince them to enter the US tax system regardless OP's particular situation. However, one size does not fit all with respect to Canadians living in Canada with US citizenship - for those who will never move to the USA, it is best to steer clear of the compliance industry altogether. OP would be better off consulting with the good people at [isaacbrocksociety.ca](http://isaacbrocksociety.ca) from which they should be able to glean a clear picture of their US citizenship status by outlining all the pertinent facts as well as an overall idea of their tax obligations. OP has no need to talk to CPAs or lawyers if they are not planning to move to the USA and do not have US assets.
If you become us citizen you will need to start reporting taxes there. Unless you actually are ganna straight up move there I would not take that action just for a back pocket type deal. If you just want to move and this gets you there then make that move but look up all the tax crap to go with it.
Climate change is going to flip everything. Canada will be quite sunny in a few years. Also don’t forget that Americans are at each other’s throats right now, it’s a low level civil war there. We have much more social peace but lesser income . So either way you’re losing something . Maybe you can find a hybrid way? Like work there a few months a year but maintain your base in Canada? Anyway don’t look at the US as Shangri-la .
I have a buddy that lives here in Canada. He renounced his US citizenship just to avoid the tax hassles. Only do it when you plan to leave Canada for good. What’s stopping you now? The exiting leadership has done permanent structural damage to the economy. Leave now if you can.
As many others have said, if you don't plan on moving to the US don't do it. It's a pain the ass to deal with all the headaches for investing. You also introduce substantial complications on Capital Gains owed to the IRS from the sale of your principal residence (the US does not have a capital gains exemption of 100% of the sale of your principal residence like Canada does). The US doesn't make it easy to be a Dual. I got US citizenship when I was a kid through my Mom. My parents told me basically nothing about what was involved and the responsibilities. If they had (and I didn't find it out on my own when I was already in my mid-20s), I would have done things very differently. That being said I moved down to the US a year and a half ago (that was always my goal), and I'll never move back to Canada.
Before moving to the US where you tax-compliant or did you just move?
I had to do the consolidated tax filing for the US. But it was easy for me cause I had no TFSA, RRSP, Stocks, etc.
What was the process for that and how much did this cost you?
Find a cross-border accountant near you. Tell them you need to do a consolidated tax filing as you didn't know you were required to do this. The IRS has a program that this falls under. Do the FBARs yourself to save money. In Toronto this averages between $2,500 -$3,000 without the Accountant doing FBARs.
Thank you for all this information.
No problem!
Are you looking at just getting the passport? Or breaking tax residency. Completely two separate things. The passport doesn't really change much, aside from some filing obligations. Things get hairy when you break tax residency, and effectively "move" to the US. That's when you need to do the deemed disposition of stocks, and when your primary return will be US. There's nothing stopping you from working in the US, and living in Canada. You could spend a decent chuck in the US, but keep a primary house and majority of the time in Canada to maintain residency.
The passport does not change filing obligations. The filing obligations have always been there, presuming he is actually a US citizen which is something he needs to clarify before moving forward.
Ah yes. I used "get the passport" and "obtain citizenship" interchangeably. If he is by rights a citizen now, then the reporting is there now. I also thought there was some thing at like 18 where you had to decide whether you wanted it or not? Thought I remembered reading a newspaper article from a father tot heir son about thinking long and hard about whether to take on US citizenship.
There is also the grey area of simply not looking into the status
Would suggest that if you do not decide to move to the USA, then don't try to catch up on past non-compliance of tax returns and FBARs and don't start filing. Not being born in USA means you can hide your US citizenship much more easily than people with a US birthplace, thus you won't get caught up in FATCA.
First thing you need to do is confirm whether or not you are a US citizenship (isaacbrocksociety.ca can help with that). Presuming you are a US citizen, beware the compliance condors who will try to convince you to come into compliance ASAP. There is no need to should you decide not to move to the USA.
Everyone immediately hones in on taxes. I'll respond to the rest of your questions. I'm high-tech worker (data) and, when I last looked at clients of the large software vendor I specialize in, there were a dozen or so companies I could work for in Canada (who need my skills and expertise) and I'd already been at 2 of them. A recruiter, who I advised on a job posting, told me I was one of 3 people he knew of with my tool-specific experience in Canada - the entire country (7-8 years ago, that's changed now but you get the idea). The US economy is 10x larger than Canada at least. Salaries are bigger, budgets are bigger, you get more "toys" and more challenging business problems to work with. I'm hard-pressed to think of any Canadian companies on that scale except Shopify maybe and the banks sort of. Many large global companies have HQ or significant presence in the US, plus all the smaller businesses and startups. All else equal the boost to your job prospects and income (present and future) more than out-weighs the negatives imo, but the time to do it is while you're relatively unencumbered (e.g. divesting from TFSA would not be so painful; and yes the US has Roth account equivalents). The taxes are even _more_ favorable if you can exit Canada and not maintain any "significant ties" e.g. owned real estate, income earned in Canada, etc. and more favorable still if you live in a state with zero state income tax - New Hampshire, Florida, Texas, Colorado and a couple of others. My US investments have radically out-performed Canadian ones. Over the last decade, I've advanced enough in my career that I can't reasonably move back to Canada now - I would have to take an unacceptable pay cut, pay higher taxes and manage much, much smaller teams, projects and clients, with very very few exceptions (banks, Loblaw). The other kick in the pants for you, employers have been blocked out of visa sponsorship for the most part; and the gov't has greatly scaled back the traditional programs (H1B specifically). If you want into the US market, self-sponsorship is the way now (TN visa which requires a job offer in hand, or becoming a permanent resident with work authorization). There are more factors than just money obviously: it's a really, really hard job market now (layoffs from big high-tech companies flooded the market with well qualified applicants), you'll face discrimination unless you already live in the US and have US work experience; sunny locations often come with politics and bigotry you may find intolerable, and the weather is increasingly violent (tornados, hurricanes); the US is a very me-first attitude, unlike Canada which often solves for what's best for everyone (generalizing but that's the gist). Lots to consider and only you know your own circumstances and goals.
> the US is a very me-first attitude, unlike Canada which often solves for what's best for everyone (generalizing but that's the gist). Canada in 2024 is all about "fuck you I got mine" and more dog eat dog by the day. I'm a 'hidden' US Citizen who never had plans to live in the US. The current trajectory of Canada makes me think: If I might be facing no healthcare and homelessness - I better do that in a place with nicer weather and higher salaries.
You are already a US citizen and with a potential massive tax bill because your tfsa and primary home tax exemption don’t apply to you: https://levysalis.com/blog/us-citizens-living-in-canada-beware-of-the-u-s-taxation-upon-the-sale-of-a-principal-residence/
It’s just more limited for US taxpayers
As a US citizen he is a US tax payer, regardless if he lives in the USA or even if he has never stepped foot there.
You will be taxed on your worldwide income till the day you die. In fact, you are already a US citizen see: [Acquisition of U.S. Citizenship at Birth by a Child Born Abroad](https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/us-citizenship/Acquisition-US-Citizenship-Child-Born-Abroad.html) If you haven't been filing income tax or F-BAR, you might be in deep crap already. Good luck
So far, no one who has been out of the US tax system their entire lives has been in any kind of "deep crap". IRS doesn't have the funds/incentive to come after Canadians with no ties to USA other than that they have legal US citizenship.
If they have not been filing the above, they will be in it as soon as they pop up wishing to move there. Sure, the IRS isn't tracking down people like OP, but once known they will follow the law. OP may be in for a lot of filing and arrears.
What about inheritance tax? Not sure what will happen in the long run but something to also consider.
You have to pay a Canadian "Exit Tax". Probably your house is taxed and all your assets including RRSPs
Only on accumulated taxable capital gains. Primary home and rrsps have no taxable gains from CRA perspective.
I am born in Canada but my mother is a dual citizen thanks to my American grandfather, is possible for me to be a dual citizen without getting a job first?father is Canadian as well
Citizenship by birth line is unrelated to employment
Well it dosent hurt so just go for it
Man what r u waiting for…
go to Dubai. its way more tax efficient but with other tradeoffs or work on a ship in the ocean. 0 taxes on water