Looking for some tax advice... - Page 2

eric5148 · #11 05-26-2005, 01:39 PM

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Renouncing your US citizenship is perhaps one of the most -EV moves you can make in life.

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So you're saying it's +EV if you pay U.S. taxes without using any of the services the U.S. govt.?

I wasn't aware of the $80K rule the OP mentioned.

chief444 · #12 05-26-2005, 02:04 PM

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I wasn't aware of the $80K rule the OP mentioned.

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I'm really fuzzy on the details but I think it stems from NAFTA (north amer. free trade agreement). I could be wrong there though. Certain things though are specific between US/Canada/Mexico. There's something I believe with the social security as well where it's possible to transfer between the two in this or some situations. But I haven't really had time to look into all of this yet. The immigration paperwork itself along with just moving has kept me pretty busy. That's why I was hoping to find someone to just take care of this for me.

Thanks for all the suggestions and thanks to sredinator and lazen for the PM's.

Nightwish · #13 05-26-2005, 02:05 PM

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Renouncing your US citizenship is perhaps one of the most -EV moves you can make in life.

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So you're saying it's +EV if you pay U.S. taxes without using any of the services the U.S. govt.?

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Looking at it from the tax perspective is incredibly shortsighted. The ability to enter, live, and work in the US as you please and for as long as you please is worth far more than that.

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I wasn't aware of the $80K rule the OP mentioned.

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Were you aware of the fact that the IRS aggressively goes after people it suspects of having renounced their US citizenship for tax purposes, to the point of getting judges to block their entry into the US? So unless the OP is sure he never wants to set foot on US soil again....

broiler · #14 05-26-2005, 02:33 PM

The exclusion that you are talking about is the foreign earned income exclusion and it has been around since long before NAFTA was even considered. The IRS has a publication about it and gambling income is specifically mentioned as not earned income and therefore not eligible for the exclusion. The simplified definition from the publication of earned income is payment for services performed. I don't remember the publication off the top of my head, but the form is Form 2555 when you claim the exclusion and I'm sure that the instructions for the form refer tot the specific publication for guidance. I posted about this a few months ago and I'm sure that I looked up the publication and referenced it at that time if you can find the topic through the search function.

eric5148 · #15 05-26-2005, 02:40 PM

The impression I got from the OP was that he was moving permanently.

chief444 · #16 05-26-2005, 02:43 PM

Yeah, you're right...nothing to do with NAFTA. See I've read through so much it's all just jumbled together now. I did print the form out but reading through a half inch thick IRS publication is about as interesting as watching paint dry and about as clear as the East river. I don't know how you accountants do it. [img]/images/graemlins/grin.gif[/img]

chief444 · #17 05-26-2005, 02:47 PM

I am. But still giving up my US citizenship is something I would definitely like to avoid even if it meant paying quite a bit more in taxes each year. And obviously I would never do anything that would prevent reentry, even though it's unlikely that I'll come back to live permanently in the states. Although it's always good to keep options open. If I planned on gambling professionally for longer than the period from now until I get my work permit I may feel differently but I'll take a 9-5 job ASAP and go back to part time poker.

sredinator · #18 05-26-2005, 02:52 PM

"The only thing I know about your moving to CA situation is that you should renounce your U.S. citizenship. Otherwise, the U.S. govt will make you pay taxes even if you don't live here."

But US citizens living abroad receive a foreign tax credit for all income taxes paid in Canada in their US filings, with Canadian taxes typically being higher than American the end result for most people is no taxes payable in the US. Basically, you would only pay tax in the US if you paid less tax in your resident country on your income than you would have in the US, in which case you would pay the difference between US and Canadian tax.

What makes Chief's case interesting is gambing income not being taxable income in Canada. I don't know enough about it to make a solid recommendation, but it seems like he may get screwed, having to pay Canadian tax on his employement income here, and then pay US income tax on his gambling income there. Although with that he may be able to use his taxes paid in the US on his gambling income to reduce his Candian tax payable on employment income, but I'm not sure.

The bottom line is he definitely should consult with someone who knows the ropes on this.

chief444 · #19 05-26-2005, 03:03 PM

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What makes Chief's case interesting is gambing income not being taxable income in Canada. I don't know enough about it to make a solid recommendation, but it seems like he may get screwed, having to pay Canadian tax on his employement income here, and then pay US income tax on his gambling income there.

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From what I've read I think that's basically what I'm looking at. But if I have to pay on both then so be it. I have to pay on both in the U.S. anyway. But yeah...Canadian income tax is unreal! Oh well.

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Although with that he may be able to use his taxes paid in the US on his gambling income to reduce his Candian tax payable on employment income, but I'm not sure.

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I'm hoping.

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The bottom line is he definitely should consult with someone who knows the ropes on this.

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Couldn't agree more. Hence the post. Thanks again.