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Will my child need to file taxes in US when old enough

Will my child need to file taxes in US when old enough

Old Jan 7th 2020, 12:10 pm
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Default Will my child need to file taxes in US when old enough

Good morning all,

my daughter was born in a Canada and currently
holds a Canadian passport. Her mother is an American citizen from birth who has not lived in the US for 12+ years and holds Canadian PR status. I am a British citizen from birth and also hold Canadian PR.

ny question, will my daughter be considered a US citizen by IRS when she is 18, and therefore need to file taxes, even if she never resides in USA?

cheers
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Old Jan 7th 2020, 12:23 pm
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Default Re: Will my child need to file taxes in US when old enough

US citizenship isn't determined by IRS. Rules are found at https://www.uscis.gov/us-citizenship...hrough-parents
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Old Jan 7th 2020, 12:24 pm
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Default Re: Will my child need to file taxes in US when old enough

It depends on if your daughter is a US Citizen.
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Old Jan 7th 2020, 12:27 pm
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Default Re: Will my child need to file taxes in US when old enough

This may help:

https://uscode.house.gov/view.xhtml?...edition=prelim

I think the relevant subclause is (g), if the mother has resided in the US for five years, at least two of which were after the age of 14, then the daughter acquires US citizenship from birth.

All US Citizens are required to file tax returns on worldwide income regardless of residence.
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Old Jan 7th 2020, 1:02 pm
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Default Re: Will my child need to file taxes in US when old enough

Originally Posted by carcajou View Post
This may help:

https://uscode.house.gov/view.xhtml?...edition=prelim

I think the relevant subclause is (g), if the mother has resided in the US for five years, at least two of which were after the age of 14, then the daughter acquires US citizenship from birth.

All US Citizens are required to file tax returns on worldwide income regardless of residence.
thanks this was my my reading of it too and my concern, I.e. that the US state basically forces citizenship on my daughter. Is there anyway of stopping this should we wish I.e. renouncing her US citizenship?
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Old Jan 7th 2020, 1:15 pm
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Default Re: Will my child need to file taxes in US when old enough

Yes, in much the same way that the Canadian state forced citizenship on your daughter.

Why don't you just wait and let her decide when she is old enough? She may decide she wants to come back.

There are double taxation treaties etc that can offer expats protection.

Last edited by carcajou; Jan 7th 2020 at 1:25 pm.
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Old Jan 7th 2020, 1:31 pm
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Default Re: Will my child need to file taxes in US when old enough

Originally Posted by Engineer_abroad View Post

thanks this was my my reading of it too and my concern, I.e. that the US state basically forces citizenship on my daughter. Is there anyway of stopping this should we wish I.e. renouncing her US citizenship?
Whoa! The US does NOT force citizenship on anyone. You child may be a US citizen from birth based on her US Citizen mother and if the mother is qualified to pass on her US citizenship to her children. Did your wife live in the US x number of years before her 14th birthday and x number of years after it? If so, then your daughter is an automatic US Citizen. If has nothing whatsoever to do with being forced to be a US Citizen. She either is or she isn't. Just as your daughter may be a British citizen from birth if you are eligible to pass on citizenship to your off-spring.

Yes, she (not you) can renounce her US citizenship when she is of age. She can also renounce her British citizenship and her Canadian citizenship. She can be a person without a country because her father is so ill informed about the tax issues between countries, especially countries that have tax treaties.
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Old Jan 7th 2020, 1:42 pm
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Default Re: Will my child need to file taxes in US when old enough

Originally Posted by carcajou View Post
Yes, in much the same way that the Canadian state forced citizenship on your daughter.

Why don't you just wait and let her decide when she is old enough? She may decide she wants to come back.

There are double taxation treaties etc that can offer expats protection.
except Canada and UK don’t force her to file taxes, pay taxes to then or agree to have her bank accounts scrutinized.

we will probably let her decide when she is older.
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Old Jan 7th 2020, 1:52 pm
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Default Re: Will my child need to file taxes in US when old enough

Originally Posted by Engineer_abroad View Post

except Canada and UK don’t force her to file taxes, pay taxes to then or agree to have her bank accounts scrutinized.

we will probably let her decide when she is older.
Letting her decide when she is of age is the proper thing to do.

BTW, I often shake my head at how naïve people can be. Your income, your purchases, your savings, your personal life, your travels and the number of toilet paper sheets you use monthly are known to not only your government but nearly even other government worldwide. Conversations are listened to by Big Brother, your computer is read by Him, etc. You can run but not hide.
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Old Jan 7th 2020, 2:03 pm
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Default Re: Will my child need to file taxes in US when old enough

Originally Posted by Rete View Post
Whoa! The US does NOT force citizenship on anyone. You child may be a US citizen from birth based on her US Citizen mother and if the mother is qualified to pass on her US citizenship to her children. Did your wife live in the US x number of years before her 14th birthday and x number of years after it? If so, then your daughter is an automatic US Citizen. If has nothing whatsoever to do with being forced to be a US Citizen. She either is or she isn't. Just as your daughter may be a British citizen from birth if you are eligible to pass on citizenship to your off-spring.

Yes, she (not you) can renounce her US citizenship when she is of age. She can also renounce her British citizenship and her Canadian citizenship. She can be a person without a country because her father is so ill informed about the tax issues between countries, especially countries that have tax treaties.

Thank you for your opinions but please respect that mine differ to yours without a need to insult me. surely the fact that I am asking the questions and finding out the answers means I am the opposite of ill informed, or least trying not to be.

My daughter has not made a conscious decision to be a US citizen, but has to make a conscious decision to renounce it (which is not free by the way), and is now tied into a bizzare tax situation which could cost her thousands of dollars just in tax filing fees over her lifetime (accountant fees to advise on tax treaties are not free either).

Even with tax treaties etc. my daughter is still faced with a foreign government, to her, scrutinizing her accounts and the personal affairs for life. The US is the only western country to tax based on citizenship not residency.
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Old Jan 7th 2020, 2:14 pm
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Default Re: Will my child need to file taxes in US when old enough

I was insulting you although you appear to take it that way.

Unless your daughter when she is working or has a bank account or investment account that generates close to 100K, she will not be paying US taxes. My Canadian husband still has to pay Canadian taxes on his Canadian military pension and old age benefits even though he is living and retired in the US. As he pays the tax in Canada, he does not have to pay it in the US. And we're only talking $38K a year.
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Old Jan 7th 2020, 2:34 pm
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Default Re: Will my child need to file taxes in US when old enough

For a Country founded the way it was, the taxation situation described above does seem a little odd to me. I can well imagine people who hit the requisite age and have never lived a day in another Country would more than likely not realise they have to file taxes there - ill informed or not.
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Old Jan 7th 2020, 2:55 pm
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Default Re: Will my child need to file taxes in US when old enough

Originally Posted by Rete View Post
Whoa! The US does NOT force citizenship on anyone. .... If so, then your daughter is an automatic US Citizen. If has nothing whatsoever to do with being forced to be a US Citizen. .....
Making someone who was not born in your country, and does not live in your country, a citizen of your country irrespective of their, or their guardian's wishes, is not "forcing citizenship on them".

Discuss.

================================================== ================

As an aside, I strongly suspect that if you don't register your daughter's birth in the US, through the US's Canadian consulate, and if you don't apply for a US passport for her, and if your wife never claims your daughter as a dependent on her US tax return, that the US will remain entirely unaware that, per US law, your daughter is a US citizen. As per others' advice, I recommend that you leave well alone and leave the matter for your daughter to decide when she attains her majority.
Originally Posted by robtuck View Post
..... I can well imagine people who hit the requisite age and have never lived a day in another Country would more than likely not realise they have to file taxes there - ill informed or not.
Per my comment above, I suspect that there are likely hundreds of thousands, of "Americans" around the world who are blissfully unaware of their obligation to file an annual US tax return, and conversely in the majority of those cases that Uncle Sam is unaware of their status as a US citizen.
Originally Posted by Rete View Post
I was insulting you although you ....
Much as we suspected.

Last edited by Pulaski; Jan 7th 2020 at 3:02 pm.
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Old Jan 7th 2020, 3:06 pm
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Default Re: Will my child need to file taxes in US when old enough

Originally Posted by Pulaski View Post
As an aside, I strongly suspect that if you don't register your daughter's birth in the US, through the US's Canadian consulate, and if you don't apply for a US passport for her, and if your wife never claims your daughter as a dependent on her US tax return, that the US will remain entirely unaware that, per US law, your daughter is a US citizen. As per others' advice, I recommend that you leave well alone and leave the matter for your daughter to decide when she attains her majority.

Per my comment above, I suspect that there are likely hundreds of thousands, of "Americans" around the world who are blissfully unaware of their obligation to file an annual US tax return, and conversely in the majority of those cases that Uncle Sam is unaware of their status as a US citizen.

Much as we suspected.

Exactly it's a slightly strange "law" I'm not even sure what the penalty is for not registering a CRBA,

And even stranger is the onus is upon the US citizen to prove residency requirements..... One could quite easily lose such information or find it very difficult to obtain...
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Old Jan 7th 2020, 3:56 pm
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Default Re: Will my child need to file taxes in US when old enough

One point worth noting is that "age 18" is not the determining factor for whether you have to file taxes. "Income" is the determining factor. Does she have income (jobs, dividends, capital gains, etc)? They don't really care how old you are.

While I'm not fully versed in the US-Canada tax treaty, I should note as a general rule if your daughter has income over $12,000 she needs to "file" a tax return. She would not need to "pay" any taxes as she would be under the foreign income exclusion or whatever section of the US-Canada tax treaty, but she still would have to fill out the forms.

The tricky bit is this (and this also applies to your wife): while ~$90,000 in foreign income can be 'excluded' from your overall income for US tax purposes (and thus, eliminate the need to pay taxes), to qualify for this exclusion you MUST file the tax return. If you don't file, you don't get the exclusion. If you don't get the exclusion, you could have a tax liability. It's a kind of paperwork shuffle, but basically, you need to file even if you don't owe taxes, especially if overseas. Note also if she is filing taxes that may affect your wife's tax filing if she claims her as a 'dependent'.

In addition, please note the requirement for FBAR filings for US citizens abroad, again also not age dependent. If she has > $10,000 USD in total in all of her bank account combined where she has signing authority (i.e. a joint checking account with you, a personal savings account she has, etc) than she needs to file an FBAR each year listing all of her bank accounts. Yet another annoying form.

Here is some more information, including the dreaded FATCA filing (which I didn't list for now but will also one day be something she will need to deal with).

https://www.taxesforexpats.com/artic...or-minors.html
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