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Old 08-16-2007, 12:42 PM
 
Location: Shallow alcove hidden from the telescreen
2,655 posts, read 7,168,527 times
Reputation: 1220
Quote:
Originally Posted by mrvgs View Post
So if that where true you would pay tax to Canada @ lets say 35% and then pay the US another 35% and that would leave you on say a salary of 50000.00 a year 15000.00 to live off of. Now why would anyone do that? If while you are in another country how would the US know how much you made if it does not get reported to them? Something doesn't seem right with that.
Whether U.S. citizens who live abroad file U.S. income taxes or not is another issue. I'm just pointing out that, broadly speaking, Americans pay taxes based on their status as a U.S. citizen, not a as a U.S. resident. It's a totally archaic policy, reminds me of fiefdoms, or something, but that's the American way. European governments don't charge taxes on their nationals living abroad. This is how America should be, but it isn't.
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Old 08-16-2007, 01:49 PM
 
575 posts, read 2,181,612 times
Reputation: 236
This women I worked with has a duaghter that has been living in France for about 5 years..so I'm interested to ask what she does for taxes...
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Old 08-16-2007, 08:34 PM
 
9 posts, read 27,816 times
Reputation: 14
Default wonder is there such a rule a "dule citizenship."?

Quote:
Originally Posted by rosie50 View Post
Does anyone have a dual citizenship US/Canada? What are the benefits and drawbacks?
that would be most interesting. As am fighting for my life and need primo care wherever....I could get it. Let me know if anyone finds out. I will also research it;myself. thx.

Last edited by burbsgirl; 08-16-2007 at 08:37 PM.. Reason: typing error
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Old 08-17-2007, 09:37 AM
 
Location: Boston, MA & Istanbul, Turkey
793 posts, read 459,670 times
Reputation: 391
I have dual citizenship and yes you do have to file a US income tax return for all foreign income each year. The IRS has tax treaties with 35 nations and Canada is one of them, the IRS can audit any of your tax returns for up to the past 5 years.

The first $85,700 of your foreign income is tax exempt and if you are filing jointly with your spouse you can each claim that exemption so that it doubles. There is also a housing exemption that you can claim as well, the IRS has a specific cap for each country based on local housing costs. I believe the cap ranges from about $11,000-$80,000.

Also remember to terminate your tax domicile in your home state when you are leaving as well, this will allow you to avoid having to file a state tax return (in states that have an income tax) in addition to your federal return. The only reason to keep residency status in a particular state is if you own property and want to claim a homestead exemption on your property taxes.

Most large accounting firms abroad will have at least a couple accountants that specialize in US tax returns, so it should not be a problem to find someone to file your return each year. When we lived in Toronto our accountant charged us a pretty low fee to file ours each year in addition to our Canadian tax return.

I agree with the above posters that say that this is an archaic law and needs to be reexamined by congress. It is hurting American multinational corporations from transferring American employees to fill positions abroad because these employees will be loosing income if they earn over 85k a year.

The exemption is also out of whack as well, this law was established in the 1960's and the expemption was $25,000, if indexed with the CPI that amount would be almost $160,000 as opposed to the $85,700 it is now, so it is way too low.
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Old 08-17-2007, 10:07 AM
 
Location: Boston, MA & Istanbul, Turkey
793 posts, read 459,670 times
Reputation: 391
As far as the benefits to having dual citizenship?? You have so many options as to where to live.

I am originally from Toronto and have had the opportunity to pursue opportunities in NYC and Orlando without having to go through the sponsorship red tape. My wife and I are actually moving to Boston in 2 weeks (probably a long term move, great city!) and love the fact that when looking at a move we are not limited to searching in one country.

The US and Canada are such diverse countries and we have the opportunity to see which specific city/state/Province fits our lifestyle, needs and career aspirations.

Last edited by Cart24; 08-17-2007 at 11:14 AM..
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Old 08-17-2007, 11:27 AM
 
50 posts, read 244,578 times
Reputation: 34
Default Thanks for the info

Quote:
Originally Posted by mattncind View Post
I have dual citizenship and yes you do have to file a US income tax return for all foreign income each year. The IRS has tax treaties with 35 nations and Canada is one of them, the IRS can audit any of your tax returns for up to the past 5 years.

The first $85,700 of your foreign income is tax exempt and if you are filing jointly with your spouse you can each claim that exemption so that it doubles. There is also a housing exemption that you can claim as well, the IRS has a specific cap for each country based on local housing costs. I believe the cap ranges from about $11,000-$80,000.

Also remember to terminate your tax domicile in your home state when you are leaving as well, this will allow you to avoid having to file a state tax return (in states that have an income tax) in addition to your federal return. The only reason to keep residency status in a particular state is if you own property and want to claim a homestead exemption on your property taxes.

Most large accounting firms abroad will have at least a couple accountants that specialize in US tax returns, so it should not be a problem to find someone to file your return each year. When we lived in Toronto our accountant charged us a pretty low fee to file ours each year in addition to our Canadian tax return.

I agree with the above posters that say that this is an archaic law and needs to be reexamined by congress. It is hurting American multinational corporations from transferring American employees to fill positions abroad because these employees will be loosing income if they earn over 85k a year.

The exemption is also out of whack as well, this law was established in the 1960's and the expemption was $25,000, if indexed with the CPI that amount would be almost $160,000 as opposed to the $85,700 it is now, so it is way too low.
Thanks for clearing that up. So if you make less than 85,000.00 a year you only pay taxes to Canada. The housing thing is that renting, buying, how does that work?
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Old 08-21-2007, 06:40 AM
 
41 posts, read 91,380 times
Reputation: 34
Default dual citizenship

Thankyou for your replies. I was born in US but came to Canada when a few months old and have been here since so I have no property or other ties. I ha;ve been thinking about dual citizenship as a means of expanding my job opportunities. I live close to the border so it would be convenient.
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Old 08-22-2007, 06:32 AM
 
Location: Bucksport, Maine and northern Florida
78 posts, read 157,149 times
Reputation: 27
Untrue,
It's 11 months outside of the U.S., to be eligible for tax exclusion; and you will still have to file.
In fact, you will still be liable to pay taxes on anything earned over US$85,000.00.
International Tax Tips for Expatriate Americans and Avoiding Tax Domicile Problems after Moving Abroad

Last edited by truckmen; 08-22-2007 at 06:36 AM.. Reason: additional information
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Old 09-10-2007, 09:30 PM
 
4 posts, read 20,508 times
Reputation: 13
[quote=mrvgs;1292908]
Quote:
Originally Posted by cre8 View Post
As an American, you pay taxes based on citizenship -- not residency, the way modern countries do it. [/QUOTE

So if that where true you would pay tax to Canada @ lets say 35% and then pay the US another 35% and that would leave you on say a salary of 50000.00 a year 15000.00 to live off of. Now why would anyone do that? If while you are in another country how would the US know how much you made if it does not get reported to them? Something doesn't seem right with that.
The Canada-U.S. Income Tax Treaty deals with the issue you identify. It is true--the U.S. taxes all of its citizens, no matter where they live in the world, while Canada taxes its residents.

Another important issue that hasn't been identified here is that there is taxes on estates in the U.S. Canada does not tax estates (there may be probate tax depending on the province of residence). Funny that so many people think that the U.S. is a low-tax country compared to Canada!
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Old 09-11-2007, 10:11 PM
 
58 posts, read 225,494 times
Reputation: 29
i am canadaian with claim to us dual, i wouldlike to live there and work part time so dual is what i need
but the health care aspect scares me
what has been your experince/cost?
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