I’m a US-CAD dual citizen and in most cases for tax reasons, I need to make an extra $6000 CAD in savings a year from having a US salary to offset the cost of having a US citizenship. By the time I’m 65, I would have lost around $370K CAD in today’s value worth of total costs.
This is because all the tax-advantaged and deferred savings accounts save around $300k lifetime, or $4250 CAD/year invested. With solely a Canadian citizenship, I would have otherwise fully contributed to and invested with a TFSA, HBP, and FHSA which is a total of 375K contribution room in today’s value.
Not to mention, the filing costs can range from $1000-2000 CAD / year and usually range closer to 2000, so I noted that one as $1750 CAD / year.
Is US salary different enough to where I can make 10-20K CAD more in savings compared to Canada and offset those costs from being a dual citizen?
12 comments
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> Is US salary different enough to where I can make 10-20K CAD more in savings compared to Canada and offset those costs from being a dual citizen?
Depends on your career and how in demand your skills are. Petroleum engineer? Probably. Physician? Definitely. Architect? Maybe not.
> TFSA, HBP, and FHSA
No idea what any of this is.
I don’t understand how being a US citizen has a financial cost to it? My understanding of Americans living abroad is that you have to hit something like $100k USD or more before you actually have to pay taxes to the US government. But you still have to file a tax return, there’s just a good chance that its for record keeping purposes. Hell, if an economy crash hits and they do stimulus payments, you’ll still get that check even if you dont’ live in the US.
Filing costs as in filing your taxes? It should not cost you $1,000 to do your taxes unless you are just completely flush with $$$$ and you have some weirdly complicated financial situations.
I am not an accountant/CPA or whatever and you should definitely contact a financial professional.
On a more general note, I’d assume a Canadian passport has a similar strength to the US Passport. It looks like US is 7th, Canada is 8th. With a few exceptions such as its a bit easier for Canadians to visit Cuba than Americans.
If you get your financial situation figured out, I think its always handy to have dual citizenship.
Most of us aren’t familiar with those acronyms. Are these retirement type accounts?
Highly dependent on your line of work and exact location. Nobody else’s answer to this is going to help you if you work in a completely different field or area of either country. Even within the US, salaries for the same job vary wildly based on location. Someone living in Boston or NYC can make almost double what someone in like Kansas does for the same job, mostly due to differences in cost of living. And I’m sure as a Canadian you’re aware of the major cost differences between Toronto/Vancouver versus the rest of the country.
I work in academia, and my compensation in the US was the same as what I am making in Canada, but my finances are in better shape in Canada because the cost of living where I am in Canada is much lower than the expensive US city I was in before. I am also savings thousands in medical costs because I have chronic medical issues that require frequent doctors visits and expensive medication.
But this is just my situation. Someone who came from a cheaper area of the US and didn’t have high medical costs may not notice as much of a difference even in my same line of work. And then you have to consider the differences in job types and industries. Some industries like tech, especially software engineers, pay much higher in the US across the board.
Most fields pay similar wages but Canadians pay way higher taxes on everything so they can have socialized healthcare, for comparison i can get an 18 pack of beer here in the states for 15 dollars, last time i was in the Yukon they were charging 50$ for the exact same case and a single slice of pizza was 5$ up there, so overall after taxes and living expenses Canadians make less than Americans, thats why the jump the border to go to Target to buy cheap stuff and drive back to Canada
The easiest estimate would be based on current income. How much do you make (gross annually)? In general, the higher your salary in Canada, the larger percent raise you’d get from moving to the US. If you’re pulling in $200k CAD, you’ll probably find >$300k USD jobs in the US. If you’re pulling in $40k CAD, you might not get a raise at all moving to the US.
>need to make an extra $6000 CAD in savings a year from having a US salary to offset the cost of having a US citizenship
Need you to expand on that one there hoss.
America has higher salaries for most jobs.
If you have a job offer with a complete breakdown in the US, this is a question you can take to your accountant. There are too many variables to speculate otherwise
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If you make enough money to make a post like this, odds are you’ll make much more money in the US