becoming a Canadian citizen - pros and cons - international non-resident cross border income tax help estate family trust assist
QUESTION: My wife and I have become permanent residents of Canada. We are U.S. citizens considering citizenship in Canada because it has become our home.
What are tax benefits/drawbacks to becoming a Canada citizen? IRS is inescapable as an American you are deemed American no matter where you reside. So I guess question is:
What tax liabilities/benefits come with dual citizenship versus benefits/liabilities of U.S. citizen as permanent resident of Canada?
Have had no luck finding answer online...so really appreciate your help.
Cheers,
david ingram replies:
There are no tax benefits or negatives to becoming a Canadian citizen that I can think of after 43 years in this business. If you leave Canada as a citizen and return to the US or move to France or Australia , you do not have to file a Canadian return any more to report your world income, although if you have investments here and a very low income, you may want to file a return under Section 217 to claim larger exemptions and reduce the non-resident withholding tax on dividends, interest and pensions. (these differ according to the country you go to by the way).
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There 'are' great benefits in that you can go back to the US without fear of losing your Canadian status because you are gone too long.
You can vote.
You qualify easier for the provincial medical plan if you leave and want to come back.
You can find my treatise on dual citizenship at www.centa.com - click on the Oct 93 Newsletter - in the top left hand box.
Then find out about what yo have to do as a US citizen to keep the IRS happy by clicking and reading the Oct 1995 newsletter. Note that form 8891 is now in use for the RRSP reporting so I better make an amendment to that one.
Last, read the 'US Canada Taxation' section in the second box down on the right hand side.
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david ingram wrote:
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
$1,600 would be for two people with income from two countries
David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty
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US / Canada / Mexico tax, Immigration and working Visa Specialists
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Cell (604) 657-8451 -
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Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
Disclaimer: This question has been answered without detailed
information or consultation and is to be regarded only as general
comment. Nothing in this message is or should be construed as advice
in any particular circumstances. No contract exists between the reader and the
author and any and all non-contractual duties are expressly denied. All
readers should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist
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Be ALERT, the world needs more
"lerts"
David Ingram gives expert income
tax & immigration help to non-resident Americans & Canadians from
New York to California to Mexico family,
estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence &
authority.
Phone consultations are $400 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product remains in
Canada or a phone consultation is in Canada.
This is not intended to be definitive but in
general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only - no self employment or rentals
or capital gains - you did not move into or out of the country in this
year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no
rental
$1,200 would be the minimum with a move in or out
of the country. These are complicated because of the back and forth foreign tax
credits. - The IRS says a foreign tax credit takes 1 hour and 53
minutes.
$1,500 would be the minimum with a rental or two in
the country you do not live in or a rental and a business and foreign tax
credits no move in or out
$1,600 would be for two people with income from two countries
$2,800 would be all of the above and you moved in
and out of the country.
This is just a guideline for US / Canadian
returns
We will still prepare Canadian only (lives in
Canada, no US connection period) with two or three slips and no capital
gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely
$450
And an American only (lives in the US with no
Canadian income or filing period) with about the same things in the same range
with a little bit more if there is a state return.
Moving in or out of the country or part year
earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00
each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00
each.
18 RRSPs would be $900.00 - (maybe amalgamate a
couple)
Capital gains *sales) are likely $50.00 for
the first and $20.00 each after that.
Just a guideline not etched in
stone.
This from "ask an income trusts tax and immigration expert"
from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily
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