Should I Renounce My U.S. Citizenship?

At a glance

Find out if you should renounce your U.S. citizenship with tax advice from H&R Block. There are a few things you can do to simplify your tax situation.

If you’re and American living in Canada, you do have other options to consider to simplify your tax situation and ease the pain. Check out what you can do to make sure there are no surprises at tax time.

The additional tax compliance challenges faced by Americans living abroad have led many to begin considering whether it still makes sense to keep their U.S. citizenship status. If you have been considering this approach, the permanence of the decision will likely leave you wondering whether it is really the only solution.

You do have another option. Simplify… The U.S. tax system has benefits in place that are designed to protect you from “double taxation.” But the system is imperfect and there are certain investments you will want to avoid. Here are a few things you can do to make your continued U.S. tax obligations as painless as possible:

  1. Consolidate your foreign accounts. Having multiple checking and savings accounts only increases your foreign account reporting obligations and the cost of your U.S. tax return.
  2. Avoid mutual funds, unit trusts, and similar investments set up in Canada at all costs. High U.S. taxes on this type of investment will generally prevent you from reaching your financial goals.
  3. Weigh the advantages and disadvantages of closing any trust TFSAs (Tax Free Savings Accounts) or RESPs (Registered Education Savings Plans). These arrangements do not qualify for the same tax benefits in the U.S. as they do in Canada and will increase the cost of your U.S. tax return.
  4. Maximize the opportunities you have to contribute to Canadian retirement plans. Registered pensions in Canada are protected by a tax treaty with Canada and create a great opportunity for U.S. taxpayers to save for their retirement without the pain that fellow expats in other countries encounter.
  5. Make sure any independent business activities are structured with U.S. tax in mind. With careful planning, painful tax implications can be avoided and tax savings can actually be created.

While you may never be able to avoid the annual tax filing requirement in the U.S. unless you abandon your citizenship or green card, you can at least make sure there are no surprises come tax time. Contact your H&R Block Expat Tax Advisor today.

Was this article helpful?


See what expats have to say about their experience with us.

Kristi Heinz

H&R Block Expat Tax has always been fast, efficient and answers my questions. For 10 years I filed everything myself and never received a refund. Now I get a big refund every year! Wish I had known sooner. I highly recommend HRB Expat Tax.

Arkadiusz Malinowski

H&R Block U.S. Expat Tax Services does a really great job! Fast and reliable. Tax Organizer was very easy to use. And what I really like most is very quick and precise answers whenever you have a question. Thank you!

Ayesha Sultan

I live in Kenya now and run my own online digital marketing business. Using this service has helped me save tons of time and energy on my taxes. I am also really relieved that they will help if I need it during audits. It really makes living abroad and doing taxes a million times better.

Jennifer Thompson

I have been using H&R block for a few years now. I live abroad, but don't make a lot of money. Filing with H&R block is as painless as doing taxes gets and my Advisor is wonderful and answers all my questions.

Alison Watts

Expat taxes made easy. I had a great experience this year - I used HR Block last year and was very impressed with the efficiency and accuracy and professionalism throughout the whole process.

 

No one offers more ways to get tax help than H&R Block.

Easy online filing designed for expats. Experienced experts if you need them. Get your taxes done in the way that’s right
for you.