You may be looking for ways to simplify your life in 2021. You spent 2020 cleaning out the garage and the attic, donating old clothes and shredding old files. Now you want to cut down on the balancing act that having a financial or legal attachment to two countries requires.

You live and work in Canada. You’ve spent the last ten months at home and have realized you’re truly a Canadian from the top of your toque to the aglets of your hockey skates. But alas, you are bound to the United States by the circumstances of your birth. Or your parent’s birth. Or your former marriage. Or the job you took out of college that was the doorway to opportunity.

By whichever circumstance you became a U.S. citizen, you’re bound by all the rules that apply to U.S. citizens all over the world. But what if you weren’t? What would it mean to let go of your U.S. connection and renounce your citizenship? There are a lot of considerations.

• Do you officially belong to Canada? In order to renounce your U.S. citizenship, you must have citizenship somewhere else. Remember Meg Ryan in French Kiss? You can’t be stranded without a country.
• The cost. Both in money and time. The current cost due to the U.S. government to get them to accept your citizenship resignation is $2,350. Add to that, the cost of necessary consultations with your attorneys and your accountants. Estate planning and tax planning will be key if you will still hold assets in both countries. This is not a fast process, so be prepared to submit information and wait. Book appointments and wait. Sit through interviews and wait.
• Know what you’ll lose. No more voting in the U.S. No more U.S. stimulus payments. No use of U.S. embassies while abroad. No access to some U.S. federal job markets. You may need to add more travel time when you cross the border to answer more questions. Any new kids that come along will not automatically be U.S. citizens. There may even be an exit tax on your assets as you leave. This is an irrevocable decision.
• Know what you’ll gain. Reduced tax filing requirements and the elimination of double taxation of some types of income. Clearer estate planning based on income sources and asset location. Easier relations with the Canadian bank of your choice (many don’t want to handle U.S. citizens these days due to all the paperwork required). A single citizenship that aligns with your identity and values.
• Why have other people renounced? Loads of reasons – political objections, family reasons, cultural identity, lack of emotional or physical ties to the U.S., and well, taxes. Filing U.S. taxes, paying U.S. taxes, offsetting U.S. taxes, trying to stay compliant with U.S. international tax laws that change every filing season, etc.

This is not a decision that should be made in haste. Talk to your professional advisors, talk to your family. Will this affect your job in way? Your retirement plans? Where your kids want to go to university? Do some reading. There are many great articles out there on the process and the considerations for the pros and cons. Make the list. Then you can sew your flag to your pack and be you.

If you are considering renouncing your U.S. citizenship and would like to explore your options and the process, reach out to us. We’d be honored to help you.