Dual Citizenship

[CanadianCountry]

Maybe better off opening a 529 college savings plan there in US.

If your child will be American, you are better off not opening RESP since it is taxable to US. Even if the child renounce American at 18, the child must pay any tax on RESP before being granted ability to renounce. Got to be cleared with IRS first before granted.

 

[alphazip]

My husband will renounce the moment the IRS starts bugging him for money (after he gets his Canadian citizenship of course). It's currently a pain to try to make sure we don't open the wrong type of account under his name (like a TFSA). Someone mentioned RESP's, I better look into that since I'm 38 weeks pregnant and was planning one for our daughter (who I'm not going to apply for US Citizenship for).

You don't really have to apply for U.S. citizenship for your daughter for her to be a U.S. citizen. RRSPs are covered in the tax treaty, and tax is deferred, but RESPs and TFSAs are not covered. Probably, the most common mistake a U.S. citizen in Canada makes (re: the IRS) is allowing his/her bank account (the aggregate amount in any & all accounts, including joint) to ever reach US$10,000. That triggers having to file an FBAR.

 

[CanadianCountry]

Filing a FBAR is not a crime. So dont know how its a mistake.

You don't really have to apply for U.S. citizenship for your daughter for her to be a U.S. citizen. RRSPs are covered in the tax treaty, and tax is deferred, but RESPs and TFSAs are not covered. Probably, the most common mistake a U.S. citizen in Canada makes (re: the IRS) is allowing his/her bank account (the aggregate amount in any & all accounts, including joint) to ever reach US$10,000. That triggers having to file an FBAR.

 

[alphazip]

Filing a FBAR is not a crime. So dont know how its a mistake.

Sorry, the mistake is allowing the balance to reach US$10,000, thus triggering the FBAR requirement. Certainly, if you don't mind filing an FBAR, there is no problem at all. In fact, go up to US$50,000 and do the Form 8938, too.

 

[CanadianCountry]

Still don't see for how filing form 8938 is a mistake. Not filing would be.

Sorry, the mistake is allowing the balance to reach US$10,000, thus triggering the FBAR requirement. Certainly, if you don't mind filing an FBAR, there is no problem at all. In fact, go up to US$50,000 and do the Form 8938, too.

 

[alphazip]

Still don't see for how filing form 8938 is a mistake. Not filing would be.

I live in a border city (Windsor) and know quite a few U.S. citizens (duals or hope-to-be duals). Many aren't aware of (or ignore, because it's inconvenient) the US$10,000 limit on deposits w/o filing an FBAR. Being fully compliant with U.S. reporting requirements either takes a lot of attention to detail OR hiring an expensive accountant. My statements refer to the problems (IRS-related) in being a U.S. citizen in Canada. Obviously, I didn't say it was a mistake to file an FBAR or Form 8938, and I think you know that.