Living in the US?

[stealth]

I was wondering, as a Canadian, am I able to live in the US?

Say I wanted to buy a house, and live there, would I be limited to the 6 month rule?

Is it possible to apply for immigration on the basis of just wanting to live there?

[Wrinkly]

You need a visa of some sort or a green card, They run a lottery every year for a number of green cards, you could try that. And yes, if you're out of Canada for more than 180 days a year you'll lose your cdn health care

Edit: Google is your friend ;)

[corsvette]

You can apply for naturalization citizenship I believe. It's a long process to become a full US citizen, I looked into it several years ago. I have more than half my Family down there and thought I'd actually want to live there full time.

There are some great "how to become a US Citizen" forums that helped me out alot.

[Manhattan]

http://www.canadiansinusa.com/Getting-a-Green-Card/index.html

Friend told me you can also apply directly (as skilled/unskilled worker?) without a sponsor but the backlog is 15 years. :nut:

If you're single the easiest and fastest way is to marry a Murican.

[googe]

No, you can't just go there intending to immigrate. You basically either need to be rich, be married to an american, or get a company to sponsor you for a work visa. You can't apply for naturalization unless you've already lived there for 5 years on an immigrant visa.

[Tik-Tok]

Originally posted by googe
No, you can't just go there intending to immigrate. You basically either need to be rich, be married to an american, or get a company to sponsor you for a work visa. You can't apply for naturalization unless you've already lived there for 5 years on an immigrant visa.

Arent you American? I'll give you $5 to adopt me and mrs.tiktok.

[googe]

Nah I'm still Canadian. I know first hand what the immigration hassles are though. I think I technically qualify for citizenship in a few months actually, but I don't plan to get it in the near future.

Going from US to Canada is a fair bit easier, but still not as easy as just walking in.

[JustinL]

Be careful getting into the American system. Do some reading about FATCA, FBAR, PFICs and IRS forms before you take the plunge. Unlike the Canadian tax system, the IRS requires you to file taxes wherever you live in the world until you are no longer considered a "US person". Being a US person includes green cards, and you can actually trigger it by being there more than 4 months a year for 3 years (physical presence test). Some snow birds actually should be filing and paying US taxes in addition to Canadian taxes and don't even know it. If you plan on living there the rest of your life, it's no problem because Canada won't come after you... but if you come back, the IRS will. It is very easy to inadvertently break the rules and trigger ridiculously huge penalties.

Go in with your eyes open.

[googe]

^ I was about to correct you and point out that only applies to US citizens, not green card holders, which was a main reason that I'm not in a hurry to get citizenship. Turns out I had it wrong all this time and it does apply to green card holders. Such bullshit.

http://www.irs.gov/Individuals/International-Taxpayers/Frequently-Asked-Questions-About-International-Individual-Tax-Matters covers a lot of this.

And if I recall correctly, the international tax treaty credit only applies to the first 92k or something of your income.

So if I were to move back to Canada, and say I was earning 100k/year, I would pay the Canadian government income tax on the first 92k, and I would pay BOTH the US and Canadian government income tax on the remaining 8k.

If you make 200k, you get taxed on the last 108k twice :eek:

I'm not positive that's how it works, but that was the impression I got when I looked into it.

[JustinL]

That is somewhat correct, yes. The first $92K of "earned" income can be claimed with the foreign earned income exclusion (FEIE). After that, it gets more tricky to find things like foreign tax credits, but it is possible to continue to reduce the tax owing. Where you really get nailed is things like dividends, RESPs, TFSA, captial gains, pensions, inheritance etc. that are not recognized by the IRS and are thus subject to full taxation from the get go. You could try to hide these things, but Canadian banks are going to start sending this info to the IRS next year, so it would be at your peril.

IMHO the only way to reasonably do it is to go on a work visa, make money there, come back and get out of the US system. If you get a green card, ditch it when you leave. Either that or never leave the US.

[ZenOps]

Psssh, with the Obama rules on illegal immigrants you could probably just show up one day.

As long as you pay the rent and lay low, I don't think anyone would care.

[bignerd]

There are actually a lot of dual citizens now renouncing their US citizenship because of the tax issues. I have dual, and should be doing taxes but haven't (got it when I was a teen and just didn't know) now I just don' t know where to start it has been so long.

They can hassle you about this and make your life difficult yet I don't want to give it up as it can be very very hard to get again and retiring or moving there is possibly an option at some point.

[googe]

Originally posted by JustinL
That is somewhat correct, yes. The first $92K of "earned" income can be claimed with the foreign earned income exclusion (FEIE). After that, it gets more tricky to find things like foreign tax credits, but it is possible to continue to reduce the tax owing. Where you really get nailed is things like dividends, RESPs, TFSA, captial gains, pensions, inheritance etc. that are not recognized by the IRS and are thus subject to full taxation from the get go. You could try to hide these things, but Canadian banks are going to start sending this info to the IRS next year, so it would be at your peril.

IMHO the only way to reasonably do it is to go on a work visa, make money there, come back and get out of the US system. If you get a green card, ditch it when you leave. Either that or never leave the US.

Are you an accountant, or did you just research this a lot for other reasons?

[JustinL]

Originally posted by googe


Are you an accountant, or did you just research this a lot for other reasons?

Dual citizen. Learned about having to file taxes in 2010 and did 6 years of back taxes and filed all my forms on my own. I've been keeping current ever since and it's really complicated. If you mess up the penalties are insane, which leads to a lot of stress. I have family in the states and don't want to close any doors, so I bit the bullet and caught up. It's getting to the point where I'm considering expatriating and becoming 100% Canadian because of the hassle and lost opportunities from being American. I also keep my wife's financials well insulated from me

Bignerd- Get caught the F- up quick. We still don't know how the Canadian government is going to deal with FATCA, but if they say ok (which is likely), our Canadian banks will have to root out US persons and report the accounts to the IRS. If you haven't caught up by the time your bank sends your info to the IRS they will start asking questions. Do some research and carefully consider your options, but staying hidden is going to get a lot harder soon.

Just to illustrate how bad the penalties can be for willful violation is read this page: http://www.irs.gov/irm/part4/irm_04-026-016.html

TL;DR Knowingly failing to report an account can result in the greater of 50% of the account or $100,000. That's per account, per year you fail to file. Thankfully Canada has said straight up that these penalties are not part of the tax treaty and they will not collect them on behalf of the US treasury. http://www.mondaq.com/canada/x/193242/tax+authorities/IRS+says+FBAR+penalties+not+collectible+under+CanadaUS+Treaty

Another interesting tibdit is that you have to file these FBAR forms for any account you have signing authority over, not just the ones you own.

You might think that dumping the citizenship is your way out of this mess... but you have to get caught up on your taxes before they will issue you a (CLN) certificate of loss of nationality. http://travel.state.gov/law/citizenship/citizenship_776.html

[sabad66]

Crap... I'm a dual citizen as well (got my citizenship during my teens because my dad is American) but didn't think I had to pay taxes there since I have lived in Calgary my whole life.

I'm right around the exemption limit but next year I will likely be over... not looking forward to being double taxed. What a stupid system. You should only have to pay taxes in the country where you work/live.

Did you do all your back-taxes yourself or did you pay a company to do it for you? At this point I would almost rather renounce citizenship and not have to deal with this BS. I hate to close that door though.

[kenny]

Originally posted by JustinL
That is somewhat correct, yes. The first $92K of "earned" income can be claimed with the foreign earned income exclusion (FEIE). After that, it gets more tricky to find things like foreign tax credits, but it is possible to continue to reduce the tax owing.

You can choose to reduce/eliminate your tax owing with a tax credit or an income deduction. The limit is $97,600 if you want to claim it as a deduction, but there is no limit if claimed as a credit. Based on everything I've read and even ignoring the limit because you may fall under it, it is generally better to claim it as a credit.

IRS documents are confusing as fuck though to comb through. The CRA website is waaaaay more plain-english so it's much easier to understand when reading.

I think I'll be paying someone to decipher all this shit for me during tax season. :nut:

[JustinL]

Originally posted by sabad66

Did you do all your back-taxes yourself or did you pay a company to do it for you? At this point I would almost rather renounce citizenship and not have to deal with this BS. I hate to close that door though.

I did them all myself and most of the years it was not bad because I was under the FEIE limit. I would say it's twice as long and hard as the Canadian forms, but doable by an individual if it's simple. One year my investments did really well and I had to go looking for other deductions and that was hard. I also bailed out of all mutual funds for fear of the dreaded PFIC form. If you have a tax bill of zero every time, you are not a very juicy target for the IRS. I also liquidated my TFSA and put it into the mortgage. You can keep your RRSP, but you have to fill out the forms to declare it to the IRS so they don't tax the gains inside the account. Lastly was the FBAR forms which were a real pain to find my account balances.

Do lots of reading before you make any decisions though. It's not easy no matter what you do and there are a lot of us in the same boat. I think most people just put their head in the sand and hope it will all work out... until Uncle Sam finds them.

[JustinL]

Originally posted by kenny


You can choose to reduce/eliminate your tax owing with a tax credit or an income deduction.

I read that too, but I was able to get to zero with the exclusion, which is much easier in terms of paperwork. Once you've felt the rage of trying to fill out all those IRS forms, something easy feels like a blessing. I had to use credits when I was over the exclusion limit, and I still did that one wrong! :dunno: Getting a letter from the IRS saying "you messed up and owe us money" is unsettling.

[Xtrema]

E2:

This is the closest thing to a startup visa that exists; it’s meant for entrepreneurs setting up a new business in the US and investing a significant amount of money. However, you have to be from one of the countries the US has a treaty with. The amount of money you need to invest will vary according to the business, and there’s no hard and fast rules on this, but it must be substantial in relation to the overall costs of setting up the business. I’ve heard some people say you need to invest at least $100k, but I know someone who invested only $40k. There’s a couple of nice things about this visa; it can be indefinitely renewed, and your spouse is eligible for a work visa too. The big gotcha is that with an E2 there is no official path to a green card. That means you’ll permanently be regarded as a non-resident alien.

[thetransporter]

Originally posted by Wrinkly
You need a visa of some sort or a green card, They run a lottery every year for a number of green cards, you could try that. And yes, if you're out of Canada for more than 180 days a year you'll lose your cdn health care

Edit: Google is your friend ;)

what if person A a US company from Canada then sponsors person B?

[sabad66]

Originally posted by JustinL


I did them all myself and most of the years it was not bad because I was under the FEIE limit. I would say it's twice as long and hard as the Canadian forms, but doable by an individual if it's simple. One year my investments did really well and I had to go looking for other deductions and that was hard. I also bailed out of all mutual funds for fear of the dreaded PFIC form. If you have a tax bill of zero every time, you are not a very juicy target for the IRS. I also liquidated my TFSA and put it into the mortgage. You can keep your RRSP, but you have to fill out the forms to declare it to the IRS so they don't tax the gains inside the account. Lastly was the FBAR forms which were a real pain to find my account balances.

Do lots of reading before you make any decisions though. It's not easy no matter what you do and there are a lot of us in the same boat. I think most people just put their head in the sand and hope it will all work out... until Uncle Sam finds them.
Thx for the info.

Did you use a tax preparation website/software or did you do them by hand?

Also for the previous years FBARs, did you have to call your bank to get the balances for previous years? I sure as hell don't have my statements from 6 yrs ago.

[JustinL]

Originally posted by sabad66

Thx for the info.

Did you use a tax preparation website/software or did you do them by hand?

Also for the previous years FBARs, did you have to call your bank to get the balances for previous years? I sure as hell don't have my statements from 6 yrs ago.

I did ask my bank to dig them out for me and it there was a small fee. I did the forms by hand because a lot of the tax software is not set up for expats, and software from 6 years ago is a bit tricky to track down.

Here's another good article from Forbes today:

http://www.forbes.com/sites/robertwood/2013/12/15/7-sins-with-bank-accounts-fatca-makes-them-deadly/

[bignerd]

I dont even know how far back to go or when I even got US citizenship, I am guessing 10 years ago. Guess I should call and ask or something, not even sure where my SSN card is or what the number is, all I have is my passport.

FML.

[bignerd]

JustinL do you have anymore helpful links or webpages for this long and painful journey I will have to embark on in the new year?

[rage2]

Originally posted by bignerd
JustinL do you have anymore helpful links or webpages for this long and painful journey I will have to embark on in the new year?
From all the friends that I've known that has to go through this, it's best to go through a local tax attorney/accountants specializing in US tax laws.

On the bright side, if you're just a T4 earner, you have nothing to worry about, and probably costs a grand or 2 worth of work from a professional. The tricky stuff is if you own your own businesses that are successful, that's when it can get expensive when you owe the US money.

[spikerS]

another reason why the USA is a nice place to visit, but I will never live there.

[JustinL]

Originally posted by bignerd
JustinL do you have anymore helpful links or webpages for this long and painful journey I will have to embark on in the new year?

Canada has an agreement now. Banks will now start looking for their American clients. There are a bunch of accounts that it says are exempt from FATCA, but that does not mean that they are exempt from taxation or FBAR reporting like the TFSA.

http://www.cbc.ca/news/politics/fatca-tax-deal-with-u-s-takes-some-heat-off-canadian-banks-1.2524444