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redleafSo today I tackled my US and Maryland income taxes (mostly), as well as IRS
Publication 54 (2011): Tax Guide for U.S. Citizens and Resident Aliens Abroad, Publication 597: Information on the United States—Canada Income Tax Treaty, DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE PROTOCOL DONE AT CHELSEA ON SEPTEMBER 21, 2007 AMENDING THE CONVENTION BETWEEN
THE UNITED STATES OF AMERICA AND CANADA WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL DONE AT WASHINGTON ON SEPTEMBER 26, 1980, AS AMENDED BY THE PROTOCOLS DONE ON JUNE 14, 1983, MARCH 28, 1994, MARCH 17, 1995, AND JULY 29, 1997, and finally Instructions for Form W-8ECI, Certificate of Foreign Person’s Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States.
Ok, the last one was a joke. The taxes weren't as hard as you would think - Maryland was by far the hardest because every time it said "non-resident" it meant you were a resident of another state and there were not instructions for if you were not currently living in another state. But yet, there was a special form if you were filing taxes on behalf of someone who had become deceased as a result of a terrorist attack. Oh well, I don't have to worry about MD next year.
What I kept sticking on was that I still have to pay taxes to the US on income I earn in Canada (or any other country) while not a resident of the States. By the rights of the treaty specifically with Canada I don't have to pay Canada if I make under $10,000, so I am not double taxed this year. But next year I most likely will be.
The US is the only country that requires its citizens to pay taxes on foreign earnings made while living abroad. Why is this? We aren't talking people living in the US moving money around over seas in tax havens to avoid paying Uncle Sam, we are talking average people, with normal jobs, that aren't currently using American infrastructure (though they certainly have benefited from it in the past) and probably are not planning to in the near future BECAUSE THEY RESIDE ABROAD. How could you possibly argue that people not living within the boundaries of the country and not employed by a company within the country should be taxed at the same rate (or at all?) as someone within the country? How many of them even vote or visit regularly?
I want to be a good citizen, but sometimes they make it very hard. If I end up living in this country for years I wouldn't have a problem filing a form with the IRS each year to "check in" and so they have an idea of my status, but If I have to pay the same taxes as someone using the interstates every day (etc) maybe I should test the bounds of the treaty and see if if I drop off the face of the earth they track me down . . . it isn't like i'd stop paying taxes where I actually lived.
Canadian taxes to come later this week!
Publication 54 (2011): Tax Guide for U.S. Citizens and Resident Aliens Abroad, Publication 597: Information on the United States—Canada Income Tax Treaty, DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE PROTOCOL DONE AT CHELSEA ON SEPTEMBER 21, 2007 AMENDING THE CONVENTION BETWEEN
THE UNITED STATES OF AMERICA AND CANADA WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL DONE AT WASHINGTON ON SEPTEMBER 26, 1980, AS AMENDED BY THE PROTOCOLS DONE ON JUNE 14, 1983, MARCH 28, 1994, MARCH 17, 1995, AND JULY 29, 1997, and finally Instructions for Form W-8ECI, Certificate of Foreign Person’s Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States.
Ok, the last one was a joke. The taxes weren't as hard as you would think - Maryland was by far the hardest because every time it said "non-resident" it meant you were a resident of another state and there were not instructions for if you were not currently living in another state. But yet, there was a special form if you were filing taxes on behalf of someone who had become deceased as a result of a terrorist attack. Oh well, I don't have to worry about MD next year.
What I kept sticking on was that I still have to pay taxes to the US on income I earn in Canada (or any other country) while not a resident of the States. By the rights of the treaty specifically with Canada I don't have to pay Canada if I make under $10,000, so I am not double taxed this year. But next year I most likely will be.
The US is the only country that requires its citizens to pay taxes on foreign earnings made while living abroad. Why is this? We aren't talking people living in the US moving money around over seas in tax havens to avoid paying Uncle Sam, we are talking average people, with normal jobs, that aren't currently using American infrastructure (though they certainly have benefited from it in the past) and probably are not planning to in the near future BECAUSE THEY RESIDE ABROAD. How could you possibly argue that people not living within the boundaries of the country and not employed by a company within the country should be taxed at the same rate (or at all?) as someone within the country? How many of them even vote or visit regularly?
I want to be a good citizen, but sometimes they make it very hard. If I end up living in this country for years I wouldn't have a problem filing a form with the IRS each year to "check in" and so they have an idea of my status, but If I have to pay the same taxes as someone using the interstates every day (etc) maybe I should test the bounds of the treaty and see if if I drop off the face of the earth they track me down . . . it isn't like i'd stop paying taxes where I actually lived.
Canadian taxes to come later this week!