3.25.2007

inevitable

I forgot to mention the gruesome task we accomplished this week: our taxes.

You single-country folks out there, no complaining. As Permanent Residents of Canada and US citizens, we have to file in both countries. We don't owe taxes to the US - we get a "foreign tax credit" - but as long as we are citizens of that country, we are required by law to check in with the IRS.

I know I said the same thing last year, but this might be the best reason to give up that citizenship when I'm eligible.

18 comments:

Idealistic Pragmatist said...

Yeah, I've said the same thing.

L-girl said...

But you haven't done it. Because you want to be able to vote?

Anonymous said...

This is not legal advice. You are not a client. I'm not even an attorney. If you want legal advice, contact an attorney admitted to your jurisdiction's bar. What I am saying here is probably 100% wrong and if you do anything in reliance upon it, you are a blithering idiot who deserves whatever bad shit is very likely to befall you.

Not sure if you've blogged about this, but I've done some research on this topic. Check out IRS Publication 519. Apparently, if your income or tax liability is above a certain amount (i.e., they determine you renounced your citizenship to avoid paying taxes), you get taxed on all of your worldwide income for 10 years following your expatriation. In that instance, you're also inadmissible to the U.S. under 8 U.S.C. § 1182(a)(10)(E).

Also, if you are present in the U.S. for more than 30 days in any tax year, you're apparently taxed on all of your worldwide income for the entire year.

The other thing I would be concerned about is that if you renounced your citizenship, you might have trouble with the goons at the border if you wanted to visit. With all of the wholesale violations of human rights committed by the U.S., not just this administration, I wouldn't be surprised.

redsock said...

you might have trouble with the goons at the border if you wanted to visit.

I think that's our only real concern.

L-girl said...

This is not legal advice. You are not a client. ...

Oh, it's you. Why do you post under different names?

Apparently, if your income or tax liability is above a certain amount (i.e., they determine you renounced your citizenship to avoid paying taxes), you get taxed on all of your worldwide income for 10 years following your expatriation.

Yes, I'm aware of that. We are well below the limit. Allan and I are not legally married, so our incomes are separate for tax purposes. That helps keep our official income down.

The other thing I would be concerned about is that if you renounced your citizenship, you might have trouble with the goons at the border if you wanted to visit.

Ditto what Allan said. That's our concern. We can't make the decision yet anyway, so it's just theoretical blather at this point.

Anonymous said...

Oh, it's you. Why do you post under different names?

Because the first one was deemed offensive and I didn't know the second one was already in use until after I posted with it.

L-girl said...

Because the first one was deemed offensive and I didn't know the second one was already in use until after I posted with it.

Ah ha, that makes sense.

Not "offensive", by the way. Just silly. I suggested that people might take your comments more seriously without the silly nom de blog. I don't think anyone was actually offended by the words "dick hertz".

L-girl said...

The other thing I would be concerned about is that if you renounced your citizenship, you might have trouble with the goons at the border if you wanted to visit.

Although I should add, we would not be known as former US citizens at the border. We would just be ordinary Canadians with ordinary Canadian passports.

If the borders were ever locked down, if the US was denying legal entry to Canadians, then we wouldn't have our US passport by which to (presumably) gain entry. And our family is in the US. That's the issue.

I might be willing to take the chance. We'll see.

Anonymous said...

Not "offensive", by the way. Just silly. I suggested that people might take your comments more seriously without the silly nom de blog. I don't think anyone was actually offended by the words "dick hertz".

So basically what you said was, "stop that! It's silly! I'm ordering this poster not to be silly again! Right!"

I won't give you anything decent and military, no precision drilling, but I may end up leaping from tree to tree as I float down the mighty rivers of British Columbia. ;)

L-girl said...

So basically what you said was, "stop that! It's silly! I'm ordering this poster not to be silly again! Right!"

Some type of Monty Python reference, I assume? Sounds like.

loneprimate said...

Some type of Monty Python reference, I assume? Sounds like.

The Lumberjack Song, I think.

As much as I'd urge you to acquire Canadian citizenship, I'd also urge you to retain US citizenship. Canada's just a country; it's not perfect. It might conceivably go in directions you don't care to follow. It could be a very different place if Quebec ever does muster a convincing vote to separate, for instance. A second citizenship -- unless it's that of a country like Zimbabwe -- can be a handy lifeboat. You should think about whether it's really dispensable.

L-girl said...

Well, I appreciate your advice, LP, because I know it's well-meaning and well thought out.

If you were a citizen of that country down there, you might not be inclined to think of it as a lifeboat. (Should I go for the obvious Titanic joke?!)

Most people survive nicely without dual citizenship. I'm sure I would, too. The thought of checking in with the IRS every year for the rest of my life is pretty ugly.

But we shall see. As I said, it's not something I have to decide now - it's not even something I can decide now. So I just put it aside.

Anonymous said...

For those of us who've crossed the border - no, not the Canadian border, the "over 50 border" - another reason, imo, not to relinquish US citizenship is Social Security. First, yes, I do think it will still be around. Second, after having contributed for over 30 years I'm more than interested in getting that to which I'm entitled, even if I have "issues" with the government behind it. Another related issue is that I don't know if our relinquishing US citizenship would automatically mean our minor son would lose his as well. If so, that would be reason enough as I think that should be his decision when he's old enough to make it. Just a thought...

But, YES, the tax thing will continue to be a major pain in my ass. Moreso bc we will be entitled to file joint in CA (and perhaps must, I've not looked into that), but are prohibited from doing so in the US. Talk about a nightmare!

Anonymous said...

The thought of checking in with the IRS every year for the rest of my life is pretty ugly.

My feelings exactly!

I wonder what happens if you just ignore them. Do they send their goons across the border?

Anonymous said...

Some type of Monty Python reference, I assume? Sounds like.

Yes, it is. Graham Chapman often orders the film "not to become silly again!" The part about leaping from tree to tree, yes, is from the Lumberjack Song. And yes, I'm okay. ;)

L-girl said...

Moreso bc we will be entitled to file joint in CA (and perhaps must, I've not looked into that), but are prohibited from doing so in the US.

We're in the same situation - as is most of the moving-to-Canada crew. You're not required to file jointly, it's just an option.

In our case, the two different rules didn't make tax filing appreciably more difficult. YMMV, of course. But joint filing is not required.

after having contributed for over 30 years I'm more than interested in getting that to which I'm entitled

Oh, of course! I'm not that much younger than you, so it's on my mind as well. Are you sure that you lose right to claim SS if you are no longer a citizen? I haven't looked into that.

Another factor is that Canada and the US will not overlap payments - whatever you get from the US will be deducted from Canada, and the reverse.

It's possible that working for the next however many years in Canada will put us at the same level we would have had anyway. After all, there's a cap, and you don't need to pay into it for 30 years to reach it.

Another related issue is that I don't know if our relinquishing US citizenship would automatically mean our minor son would lose his as well

As far as I know, that is not how it would work.

Obviously, if you're not inclined to relinquish your US citizenship, then it doesn't make any sense to do it. I feel myself chomping at the bit. So I'll need to have a compelling interest not to.

L-girl said...

I wonder what happens if you just ignore them. Do they send their goons across the border?

That's not something I'm prepared to find out. I'm not going to purposely break the tax law to find out what happens. What if it jeopardized my status in Canada? No thonx.

YBR said...

Re: Another factor is that Canada and the US will not overlap payments - whatever you get from the US will be deducted from Canada, and the reverse.

Laura--I wanted to contact you directly but can't find email address. You posted on this a long time ago and it made me seriously rethink the possibility that, should we decide we could bear to leave NYC, or some future event make it necessary, we could always repair to NS. My husband is from there and I've owned a cottage on a lake for 40 years. [My dad was born and brought up in NS.] My brother has kept house my grandfather built and just 2 years ago my daughter bought a house 7 miles up the lake from me. She, her kids (and my Atlanta-born son-in-law) all love NS.

BUT: then I read your first post over a year ago that "Canada will subtract the amount of your US Social Security from your Canadian cheque." And I thought--scratch that--at least not year-round. Because it is NOT true in the other direction. My husband gets his Canada Pension and the Old Age AND Social Security (based on my Record--50%). The 2 Canadian ones DO adjust (for inflation?) but less than 2% per year--based on what he received 2003-2007. His SS on the other hand has gone up by 40%--because I'm still working (replacing all those years of $0's when I was Home with Kids). Since we DO get BOTH here (and have been for five years--all US cares is that we pay tax on both)--at our age we couldn't afford to make a permanent change of residence.

[When I get those emails ranting about 'immigrants' getting social security who never paid in a cent--well, it's true.]

Also, if I die first, he'll get the full amount of my social security (I think--anyway more than he gets now). If he dies first, I get one-third of ONE of his--Canada Pension I think.

Tell Allan JD hasn't changed--I still miss him weekends. Only time I've worked recently was when Kevin had to page "If any secretary is in the building..."