Benefits to Citizenship VS. Permanent Residence?

[keesio]

In your case specifically, I would say the biggest benefit would be the ability to renounce your American citizenship is you are settling for good in Canada. The reason? For tax reasons. Holding both nationalities, or even a Canadian PR and American citizenship, gets you taxed by CRA and IRS; they share all your details. Hence, many Americans who settle in Canada renounce their American citizenship.

I'd say that the percentage of dual citizens who renounce is pretty small. Most do keep their US citizenship and deal with the hassle of our dual tax obligations.

 

[marcher]

I'd say that the percentage of dual citizens who renounce is pretty small. Most do keep their US citizenship and deal with the hassle of our dual tax obligations.

Many dual citizens also renounce their Canadian citizenship if they are settled in the USA. I agree with you that most do not, but most of those that do not consider it are not aware of the tax implications. Many assume that because they no longer live in USA or Canada, then they have no tax obligations there.

 

[Iamrobot85]

I am an American citizen expecting to take my Canadian citizenship oath hopefully soon. I am doing it because I pay taxes in Canada and I think I deserve the right to vote.

But more than that, I am also doing it because you have to renew your PR every (I think) 5 years. While it is not overly expensive, it is a process. Citizenship is a process as well but it's a one and done process. I would say (not taking the waiting and the fees into account) the hassle for the two are about the same. So, I can go through the hassle of renewing my PR every 5 years (and run the risk of losing it by unwittingly not meeting residency requirements) or I can go through roughly the same amount of hassle and be done with it forever.

Also, a small note on renouncing your American citizenship once you become a Canadian citizen. I plan on keeping mine. I can see the benefit of renouncement. It is a bit of a hassle to essentially have to fill out your taxes twice. Which, BTW, you have to do as a PR as well, so remember!

However, the IRS form for Americans living abroad is fairly simple and you don't actually end up paying any American taxes on foreign earned money until you make something over 100k american, or like 130-150k Canadian. And even then, you get an additional tax break if you own a home. And THEN they start taxing you on your income OVER that amount.

Now, if I were to end up making 200k a year American, I might THEN consider renouncing my citizenship. I do not foresee that happening any time soon. And if or until you cross that threshold, unless you have some philosophical reasons, you may as well keep both.

 

[Stef.]

Well, with a Canadian passport you can stay out of the country for as long as you like. With a PR card you have to fulfill certain residency requirements or you might lose it.

 

[marcher]

I am an American citizen expecting to take my Canadian citizenship oath hopefully soon. I am doing it because I pay taxes in Canada and I think I deserve the right to vote.

But more than that, I am also doing it because you have to renew your PR every (I think) 5 years. While it is not overly expensive, it is a process. Citizenship is a process as well but it's a one and done process. I would say (not taking the waiting and the fees into account) the hassle for the two are about the same. So, I can go through the hassle of renewing my PR every 5 years (and run the risk of losing it by unwittingly not meeting residency requirements) or I can go through roughly the same amount of hassle and be done with it forever.

Also, a small note on renouncing your American citizenship once you become a Canadian citizen. I plan on keeping mine. I can see the benefit of renouncement. It is a bit of a hassle to essentially have to fill out your taxes twice. Which, BTW, you have to do as a PR as well, so remember!

However, the IRS form for Americans living abroad is fairly simple and you don't actually end up paying any American taxes on foreign earned money until you make something over 100k american, or like 130-150k Canadian. And even then, you get an additional tax break if you own a home. And THEN they start taxing you on your income OVER that amount.

Now, if I were to end up making 200k a year American, I might THEN consider renouncing my citizenship. I do not foresee that happening any time soon. And if or until you cross that threshold, unless you have some philosophical reasons, you may as well keep both.

Just out of curiosity, do the same thresholds and taxes apply if you were a Canadian living in the US. I mean does CRA apply the same rules as IRS? (e.g. taxes over 100k ..etc)

 

[keesio]

However, the IRS form for Americans living abroad is fairly simple and you don't actually end up paying any American taxes on foreign earned money until you make something over 100k american, or like 130-150k Canadian. And even then, you get an additional tax break if you own a home. And THEN they start taxing you on your income OVER that amount.

My issue is not that I pay a lot to the IRS. I usually pay just a small sum of a few hundred dollars at most. My main issue is that I pay thousands to my cross-border specialist accountant. If they would greatly simplify the tax code so that I could do it myself, that would be great. But some of the forms are just a pain to do correctly (like the FTC) and keeping up with all the exceptions and such is a headache. If your income is below the FEIE amount and your financial portfolio is pretty simple, then yeah it is not a big deal. But once you start setting up various retirement accounts, buy property, stocks, set up trusts, start your own business, etc, then not so simple to do on your own. Then there are all these caveats like how we should stay away from TSFA/RESP and foreign (to the US) mutual funds outside RRSP/RPP, etc. You also have stories like how some foreign banks turn away US citizens because of FATCA, etc.

 

[keesio]

Just out of curiosity, do the same thresholds and taxes apply if you were a Canadian living in the US. I mean does CRA apply the same rules as IRS? (e.g. taxes over 100k ..etc)

Canada, like most of the world, has residency based taxation. So if you do not have any strong ties to Canada, you can declare non-residency for taxation purposes and not have to file any taxes.

 

[steaky]

10. You don't need to wait 45 - 60 minutes at the US border office (on a light traffic day) to enter the USA through the land border crossing.

Even if OP is not American, depending on wait times, sometimes a PR need to wait less than 10mins at the US border office to enter USA through land border crossings.

 

[steaky]

Canada, like most of the world, has residency based taxation. So if you do not have any strong ties to Canada, you can declare non-residency for taxation purposes and not have to file any taxes.

Except if you are receiving Canadian source income, then you must file non resident taxes.

 

[Iamrobot85]

Even if OP is not American, depending on wait times, sometimes a PR need to wait less than 10mins at the US border office to enter USA through land border crossings.

Let's be honest, your wait times at the border have less to do with whether you are a PR, a citizen, or a visitor and more to do with the colour of your skin and whether you have an accent.

 

[steaky]

Let's be honest, your wait times at the border have less to do with whether you are a PR, a citizen, or a visitor and more to do with the colour of your skin and whether you have an accent.

So true.

 

[itsmyid]

Let's be honest, your wait times at the border have less to do with whether you are a PR, a citizen, or a visitor and more to do with the colour of your skin and whether you have an accent.

That’s just your experience - my wait time significantly reduced after PR

 

[keesio]

Nothing beats NEXUS / Global Entry. I zip through the lines now.

 

[KRP]

Nothing beats NEXUS / Global Entry. I zip through the lines now.

Good post

 

[canvan14]

Since you are an American, the benefits might not be much. But for me, and a lot of others, having a Canadian passport to travel is a gift from heaven Also another big benefit is no more residency obligation to abide by if things change down the road. And yes, the ability to vote is a great bonus.