My_question_is: Applicable to both US and Canada
Subject: Offshore investments
Expert: taxman at centa.com
Date: Friday January 05, 2007
Time: 03:14 AM -0500
QUESTION:
I'm a born US citezen. I moved to Canada at two years of age. I spent the
next 22 years of my life there. I now have both passports. I now live in
Dubai. I do not have a social security card from the US. Should I file US
taxes? I never thought of it while paying taxes in Canada. I also have
invested in offshore funds. As an American can I be exempt from tax on my
investment earnings if my gross income is less than $82,000 US?
-----------------------------------------------------
david ingram replies:
As a non-resident of Canada, you do NOT have to file or pay taxes to Canada
unless you are in Kuwait very temporarily and left a house, car, spouse and
kids or some combination in Canada.
However, Lucky you "ARE" taxable in the US as a US citizen. NO investment
income is exempt from US tax under those circumstances. Currently, up to
$80,000 US of wages or self-employed income can be exempted from US tax by
filing US form 2555.
Interestingly, I had a Canadian (living in Dubai for five years) at my home
office today.
You should be filing a 1040 with 2555 for every year you have worked.
Go to www.centa.com and read the "US/Canada Income Tax" section in the
second box down on the right hand side. It mainly deals with Americans
living in Canada so it will tell you what you should be doing backwards. In
one example like yourself, the client "ML" was taxed over $218,000 US
retroactively after he used his US passport at the US Embassy in Paris. That
was in 1995 and they went back to 1986. It behoves you to bring your old
returns up to date. If they catch you and go back, they do NOT have to
allow the exemption.
I / we would be pleased to look after them for you of course.
------------------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
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