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  Canada Immigration Forum > Immigration & Citizenship > Citizenship > Dual citizen US/Canada daughter denouncing US citizenship
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Dual citizen US/Canada daughter denouncing US citizenship




cdn_dude
Senior Desi
Member since: Dec 05




Posts: 939
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Quote:
Originally posted by deewar25

Thoughts?



Renouncing the US citizenship is a big deal - especially for your child who has not graduated and/or entered the workforce yet. Make sure you know the facts, consequences and what you are doing. I would strongly encourage seeking professional advice before taking this step. Clearly, forum like this is not a great way to seek advice for such an important decision.


 
Last edited by: cdn_dude on 25-09-17 21:14:59
Post ID: 236069 25-09-17 21:14:18
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luckysaab
Desi
Member since: Aug 10




Posts: 58
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The $10,350 amount is the standard deduction for everyone but making more than that means you could potentially owe taxes. This is only true for US residents so she don't need to worry. For US citizens living abroad the important amount is the 'earned income' of $101,300 (for 2016).
https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

There is no such thing as paying a lump sum tax of $100K for a sale of primary residence of $300-$400K gain. The US law says if you owned and lived in the place for two years before the sale, then up to $250K of profit is tax-free and if you are family the tax-free amount is $500K. And then there is the whole estate exemption thing of 5 million + if the house was gifted or inherited.

As for filing requirement the general rule of IRS is that if you don't owe money you don't have to file taxes. You can still file for whatever reason, like needing a proof of income or applying for a student loan but you are not required. IRS has an interactive calculator that tells you if you need to file taxes.
https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return
This one is tailored for US residents. I don't believe there is one for US citizens living abroad but you get the picture. IRS don't care much about average US citizens living abroad.

Not sure about your daughter's financial situation but the bottom line is you only worry about US taxation if you are multi-millionaire. In that case you seek professional help.

<Long Live Canada>


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I pointed you at the stars and all you saw was the tip of my finger

 
Post ID: 236100 04-10-17 00:00:21
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Garvo GujaratiMember of Administrators
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Member since: Nov 01




Posts: 3081
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Generally speaking taxes are lower in the USA. So in case when the returned is filed for Both in Canada and USA, it turns out that you have to pay extra to the Canadian Government. Just a ball park number, but on an Income of say US$100,000, after filing return and paying something to Uncle Sam, the Canadian Government would ask for another $5,000.

So according to me, it is better to Keep the citizenship now and just file a return in both countries. It keeps the options open.

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A Proud Indian Canadian

 
Post ID: 236101 04-10-17 08:19:14
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deewar25
Junior Desi
Member since: Jun 17




Posts: 6
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Quote:
Originally posted by luckysaab


As for filing requirement the general rule of IRS is that if you don't owe money you don't have to file taxes. You can still file for whatever reason, like needing a proof of income or applying for a student loan but you are not required. IRS has an interactive calculator that tells you if you need to file taxes.
https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return
This one is tailored for US residents. I don't believe there is one for US citizens living abroad but you get the picture. IRS don't care much about average US citizens living abroad.

<Long Live Canada>



Thank you for your information luckysaab - helpful and I'm of the belief that she likely wouldn't owe money, but I refer to this article and it seems to reject your claim that you don't need to file if you don't owe anything.

Myth #2: I dont owe U.S. taxes, so I don't have file a U.S. tax return.
In order to prevent the double taxation of income earned by U.S. citizens living abroad (i.e., tax imposed by the U.S. and the country of residence), the U.S. tax code contains provisions that can reduce or eliminate an expats obligation to pay U.S. taxes. For instance, the foreign earned income exclusion (FEIE) allows expats to exclude a certain amount of income earned abroad ($100,800 for 2015). Expats are also generally allowed to use foreign taxes paid as a credit against their U.S. tax obligation.
Even if these provisions eliminate your U.S. tax obligation, however, they do not eliminate your obligation to file a U.S. income tax return on an annual basis. This is because in order to claim the FEIE or foreign tax credit, you must file certain forms with a tax return. In some cases, a late filing of these forms can bar you from making these claims. If your late filing is allowed, you may not suffer penalties that are calculated as a percentage of tax due, but you may suffer penalties that are imposed as a fixed dollar amount. For example, a $10,000 penalty may imposed for not timely filing Form 8938 (Statement of Specified Foreign Financial Assets) with your tax return.

http://time.com/money/4298634/expat-expatriate-taxes-us-myths/

The need to file one way or another is the key issue for me at this point.
Thoughts? This is specifically related to her situation so seems more likely than the scenario for US residents you mention with the link above.




 
Post ID: 236186 24-10-17 19:01:30
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Full House
Senior Desi
Member since: Oct 12




Posts: 2284
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You can't file a copy of the Canadian Tax return, ONE that you file here with CRA to IRS and so, you start to look for a Tax filer/program that will do it for you at both the ends and get you off the hook. Some one smart will surely come up with a UNIVERSAL solution soon. So, keep your eye balls peeled open.

Also, from the link that you have provided, I see these so called MYTHS will keep increasing as the time progresses. ( http://time.com/money/4298634/expat-expatriate-taxes-us-myths/ ) and you never know when it will hit you. So, your choice of doing it sooner holds good.

If you can ignore both of the above and the costs associated with them, then what the others tell you will hold good. Hang in there with the U.S. Citizenship for now. There might come a time when you will really want to DITCH the U.S. Citizenship, like what you are feeling now, but at a later date. So, do it at that time.

In this technological GLOBAL VILLAGE, you can anticipate to see very quick solutions to complex problems OVERNIGHT.

We are the "NOW GENERATION". In short we need an answer now. I can visualize some one working at it as this hits the CD website.

HANG IN THERE.

FH.


 
Post ID: 236190 25-10-17 00:09:42
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Contributors:
cdn_dude(1)  deewar25(6)  Full House(2)  Garvo Gujarati(1)  icame(3)  luckysaab(2)  
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