QUESTION:
We are in the US on a H1B/H4 Visa. Should we have a child born in the US,
would he be automatically a US citizen? What would his Canadian status be?
If he is a US citizen and we return to Canada, at what point would he start
to file his 1040's - when he starts earning taxable income? (I want to be a
fiscally responsible parent!).
Thank you. I truly appreciate the advice you give to myself and others.
======================================================
david ingram replies:
"Any" child born in the USA to anyone is automatically a US citizen just as
any child born in Canada to anyone is automatically a Canadian citizen.
This is NOT true for many countries such as Saudi Arabia. One lady I know
has two children born in Saudi Arabia and that information plus a quarter
will let you use a pay phone. The children have no more rights in Saudi
Arabia than I have born in Vernon, British Columbia. Now, if I was born in
Vernon to a Saudi Couple, I would be a Saudi citizen AND a Canadian.
Any US citizen living anywhere in the world should file their US return
every year even if they have no income. This is because if you file every
year and report zero income, you are done and the most years that might be
looked at are three years back.
However, if you do not file your US returns, the IRS can ask for returns
back to 1967.
I have had Canada ask for 12 back years and the IRS ask for ten back years
in the last year.
Let me tell you that it is one pain in the neck trying to come up with ten
year old information.
My one American client was given a bill for $184,000 US and the Canadian
ended up with a bill for over $400,000.
$6,000 of accounting fees and two years later the American's bill (ML's) was
reduced to $146,00 but in the meantime his wife had left, they had lost the
house and his car and life is tough.
The Canadian is still trying to figure out whether to go bankrupt or not.
Neither have paid half of their bills but I have not written them off yet.
So my advice to anyone and everyone is: FILE YOUR TAX RETURNS EVEN IF THERE
IS ZERO / NADA / NOTHING TO REPORT.
Hope this helps
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