Dual citizen and taxes

[Mjenn]

OK, if you only have a small income don't worry about the accountant. You can still reach out to the embassy. Mine offers free walk-thrus of the 1040 form and 2555 foreign exclusion. You do not need anything from your employer to send directly, but you will need recored of your earned income and taxes paid in Canada to fill in the form.

Again, I am not a tax expert -- I've just been doing this for a few years -- do not take this as the final word, please consult an expert.

BUT it is doable on your own and shouldn't take more than 15 minutes. The embassy recommended, when If first discovered the filing limit was lower than the paying tax limit - that I submit a few back years to show good faith. I did. They did not request any back taxes -- I didn't owe anything.

You can use the currency converter on the IRS site to get exchange rates used for each year. Convert your annual salary to dollars. Fill in the 1040 and the Foreign Exclusion form - You should end up with a zero in final taxes owed. The instructions are all on the website and the 1040 and Foreign exclusion form. It really is easy peasy. I have done my own every year after the initial walk thru

Also, even if you do not have 10,000 in savings yet --- remember the rule for the day you do have more savings. They penalize 25% of our assets if you fail to report this and are cracking down. This includes signatory accounts. Not sure if Canada has an exception rule, but it has made a mess of things for those of us living in Europe.

[UnknownXV]

Thanks for the help, I was really getting worried and nervous over this. All my sacrificing and saving and plans outdone by a being a dual citizen, obviously that would make anyone a bit uncomfortable.

I will definitely report my bank account as well because I'll likely have 10k by the time I file my taxes so it makes sense. It's insane though, if I hadn't of found out that I had to report it, I never would have, and then someday I'd get a letter saying they'd seize 25% of my finances like that? Utterly insane that's possible.

But again thanks for the help, I'll contact an embassy here to get some more direct advice.

[andrewlohnes]

I'm glad I found this thread and wondered if anyone can help me out abit.

I'm 26 and have dual citizenship (US/UK) and only last week applied for my 1st US passport which I had approved. I've lived in England my whole life but I'm thinking of moving to the US in 2016, but over on a sit I visit they dropped this bombshell on me, tax filing!

Like I said I'm 26 and have never filed any tax forms before, never even knew I had too (I wasn't 100% sure I was actually a US citizen to be honest). I earn about £28/$45k a year and have never had anywhere near $10k in a bank account.

So does this mean the only forms I have to return are the 1040 and 2555? And for how many years? I've read about FBARs but are they only for bank account. >$10k?

Thanks, as the OP I'm quite worried about all this.

Andrew

[snafu]

Andrew, the best advice I can give is to make an appointment at the American embassy to verify information, get the required forms, on-line information sheet and a list of accountants who specialize in filing USA tax. There is an income tax reciprocity agreement which means the sums paid in the UK is credited in USA. If you can't figure out how to complete tax forms you may need to consult an accountant from the list.

http://www.us.kpmg.com/microsite/tax/ies/tea/summer2004/stories/article01.htm

If you were to move to the USA you would automatically need to file taxes and it's best not to create future problems for yourself over paperwork.

[andrewlohnes]

Thanks snafu, much appreciated

Andrew

[LivingAlmostLarge]

For both Canada and the US a lot has do with residency. It doesn't matter where you are citizen of, what matters is where you are residing. And the US and CAnada do not have the same tax reciprocity of other countries like Germany and US or Switzerland and US where you come live in US for 5 years pay no taxes. BUT if you stay in US then you have to pay back taxes.

Canada and US count residency status. And the FEDERAL tax forms differ from state or provincial tax forms. For example in US you have to file a 1040 NR unless you have been here X number of years and are on a specific visa, usually students always file that. But as a canadian you can either be on a TN visa (BIL) or an H1-B (BIL) or a J-1 also a student visa (if you want to argue with me don't my DH was on it) or a Student F-1 (more traditional student visa, my BIL was on it) depends on where you work or go to school. Then you switch over depending on your visa status. After certain number of years even with a visa you are moved to different residency class (DH BFF has this status)

Then if you are living in Canada you file a residency form. However if you are living in the states you have to file as a NON Resident taxes on your investments. And they do not allow you file as a resident if you aren't living in canada. We've done this as well.

Decide where you want to live and wash your hands of the other investments. It's a pain in the ass to constantly file taxes in 2 countries. My cheapo in-laws did this to us because they were trying to avoid paying taxes by putting investments in my DH's name and I wanted to KILL them. As of 2010 we've had to pay taxes in two countries because they were hiding assets in my DH and BIL names.

My DH threatened them with keeping the investments if they didn't stop.

Also for income is taxed where earned unless the US and country have tax treaty. I hate US tax law.