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IRS after Americans living abroad or with financial accounts abroad
There are 3 new separate provisions listed in the article.
Your reference to "that provision" - in the singular indicates you have not read the article, which in part states:
"all of a sudden there'll be hundreds of thousands more returns flooding in from people who don't owe anything."
Most countries revenue departments do no require the filing of returns when no tax is owed for certain low income individuals.(one to the three new provisions).
The article quotes references and the specific date of AUG 31.
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Bigmike mentions one of his reasons for starting a forum was that most forums people spent most of there time trying to prove the other fellow wrong instead of trying to help one another.
It seems your post is on "trying to prove the other fellow wrong".
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When I make a post a take a piece of my time - and therefore my life - and donate it towards trying to help my fellow traders.
Some forum members troll around with little quippy sound bites unsupported and not helpful.
Each time I meet one it makes me less and less likely to post again.
No. I'm Cdn. I posted the article because it could be important to some friends.
The subject is interesting to me because most countries base your income tax payable on the country where you have permanent residency. Canadian permanent residents are required to report world-wide income.
"Take your money and run and run" - written for Cdns suggests closing your Cdn retirement accounts (paying the withdrawal tax as you do so) and moving abroad with your savings. You keep your citizenship but lose your permenant residence status. {You must meet the requirements of having permanently moved - such as closing all bank accounts, not having a Cdn mailing address etc.}.
A key issue for Canadians is the medical coverage which is guaranteed for all Canadian permanent residents. This consideration stops many Canadians from traveling abroad for more than 6 months of the year. (e.g.So if you were of retirement age needed say a by-pass operation it is covered.) I believe you also lose your entitlement to govt prgs such as old age security and the Canada pension plan.
The key point is that you retain your Cdn citizenship but pay tax where you reside. (Which is logical when you think of it as taxes are for the services you consume.)
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The newspaper article (I don't have the previous article of Thursday) appears to be important to Americans living abroad and who have done so for a long time. As Canada and the USA have a tax treaty - if you pay your income tax in one country that covers you for the other - generally speaking.
So for example if you open a futures account in the other country (e.g. a Cdn opening a US based futures account) you sign a form saying you are paying your taxes in the other country and then you report your income in your home country - you don't pay twice.
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I believe the new penalties/provisions are a follow-up attempt to catch the wealthy multi-millionaire Amercians hiding money in places like Switzerland - with the purpose of evading taxes. (I think you remember the pressure the American govt put on Switerzland to reveal the identity of American accounts.)
How about a trade: My U.S. Citizenship for your Cdn citizenship?
Not a problem to leave the broken beyond repair, rapidly deteriorating U.S. health care system behind!
I had read that foreign banks were already rejecting U.S. citizens which is a major issue for U.S. citizens living abroad. Plus do not forget the U.S. citizens do NOT have the FREEDOM to open offshore trading accounts.
To my understanding tax treaties vary, especially for interest and capital gains income. As you probably know the U.S. government taxes BOTH permanent residents and U.S. citizens living abroad.
I had planned to renounce my U.S. citizenship to avoid the complexity, but recently I talked to someone from Europe who had bounced around the globe for 10+ years only to discover that home was where the heart belonged. So now I am not so sure...
Having lived in Canada most of my life I naturally follow what happens in the USA as well. I once visited Florida and was very impressed with the friendliness of Americans and there desire to be entrepreneurs.
I have holidayed in Hawaii. I loved it.
However, I would never accept an American citizenship.
In my opinion the US govt has turned against it's own people with the overturning of all rights under the (Oppression Act -aka "Patriot"). This is a very, very sad event. (I suspect the the gov't actually allowed the 911 to get the political will to pass the bill). The implications of the act for evasion of people's liberties - that the founder fathers fought so hard for is not limited to Americans - there is a spill over effect to Canada and any countries who have companies with offices in the USA. The movement to strong police state is spreading and it is very sad. Unfortunately when running for congress and one spending ove $600,000 to get elected for a job that pays $250,000(?) one realizes that most politicians are bought and paid for before entering office.
Canadians are not required by Canada to give up their citizenship if they qualify for another citizenship. However, I believe that the American govt does require that any new citizens give up any previous citizenship.
Unfotunately, in Canada, our Prime minister has sold out to the USA and does anything any US president wants him to. (just my opinion of course and the few that are awake) {It is so bad that a young page in Parliment held a a big sign saying "STOP HARPER" - great courage - though probably in vain.}
I used to go the the mining shows. One of the well-known speakers, Doug Casey, said that he has moved to Costa Rica and has never felt so free.
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Yes giving up your native citizenship is can a big deal, emotionally. Naturally you would secure a new citizenship before renoucing your US citizenship, so I'm not sure about your friend who has wandered for 10 years - doesn't sound like good planning to me. I don't see how it would stop you going back to the USA later (?).
One thing I have noticed (a big generalization here), it that Amercians - those who grew up in the USA - are very patriotic - to almost a scary extent (at least "scary" to me). I say this because you may be very correct about your regretting giving up your citizenship. - Just a thought.
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Taxes are not a big issue for me and if I earned more I would be fine with paying more. First order of business is to get my income up!!
