It’s an oft-told political joke: “If things don’t go my way, I’m moving to Canada.” You hear it every election, but do people actually mean it when they say it?
There’s a chance Hannah Frame might be one of those people. She’ll be watching the upcoming election very closely from her dorm at Kalamazoo College in Michigan, as the outcome could have major ramifications for the rest of her life.
I thought some of you Canadians might want to use this opportunity to inform Market Place Radio about the “other” realities they did not mention. I notice, yet again, there is not a FATCA in the story or anything related to the issues of US Citizenship taxation. It is written from the perspective of difficulties with Canadian immigration, the legal issues and associated expenses of those hurtles. So, a one sided and narrow perspective. That said, here is the opportunity to educate a wider audience of the other difficulties Hannah Frame has never considered.
Update: I did decide to post a comment: Here is what I said. Join in with your advice at Market Place. I am sure Hannah would love to hear from you.
Well, Hannah, I wish you well. Just one little additional complication this story did not mention.
US Citizenship Taxation.
You will still be subject to filing your 1040s, FBAR and FATCA forms, and meeting all the requirements of Homeland Taxation, other than now it will be much more complicated and expensive to do from another Country. This will be in addition to the higher Canadian taxes you will be paying. A US citizen, uniquely in the world, is required to do both. You will probably need the advice of an International Tax Practitioner.
There are many Canadians right now, that are trying to shed their US Citizenship, so that they no longer are subject to the rules, forms, and penalties associated with failure. So, my advice would be, for you to start your life abroad compliant, and then you can decide later what you want to do about it, if anything. Your life will definitely be more complicated, and expensive than a Homelander, but maybe that is OK for you. It isn’t for some.
I would suggest, that you might want to review this amusing, but informative video on youtube entitled:
The Life of the American Abroad. http://www.youtube.com/watch?v=CfWk6yRdwMo
Yes, Canada is consider ‘abroad and Offshore’, and as such if you fail the compliance test, the IRS is looking for you. FATCA is in your future, and Canadian banks may be required to report your account data to the IRS. If you have never heard the FWHAT? words, FATCA and FBAR, start your research now. Do not be surprised later.
Cheers and good luck with your new life. I would take PK’s advice to heart. Move to California. The US really does not want you to live abroad!