The votes are cast and Donald Trump will be our new president. That is fact. The government and the IRS will still want their money, regardless of who would have been voted into office. That is also a fact. Since Donald Trump started running, search inquiries for moving to Canada have spiked and even the Canadian immigration site crashed the night of the election. Some of you reading this, may even be seriously considering moving to Canada now. Also, in doing so, if you succeed in moving to our neighbors up to the North, you might think you don’t have to pay your 2016 taxes next year.
The United States imposes an expatriation tax on some of those who give up U.S. citizenship. The tax also applies to green-card holders who abandon U.S. residency after having held a green card for at least 8 of the last 15 tax years.
Treatment of expatriates
(1) In general
Every nonresident alien individual to whom this section applies and who, within the 10-year period immediately preceding the close of the taxable year, lost United States citizenship shall be taxable for such taxable year in the manner provided in subsection (b) if the tax imposed pursuant to such subsection (after any reduction in such tax under the last sentence of such subsection) exceeds the tax which, without regard to this section, is imposed pursuant to section 871.
(2) Individuals subject to this sectionThis section shall apply to any individual if—
(A) the average annual net income tax (as defined in section 38(c)(1)) of such individual for the period of 5 taxable years ending before the date of the loss of United States citizenship is greater than $124,000,
(B) the net worth of the individual as of such date is $2,000,000 or more, or
(C) such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require.
In the case of the loss of United States citizenship in any calendar year after 2004, such $124,000 amount shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting “2003” for “1992” in subparagraph (B) thereof. Any increase under the preceding sentence shall be rounded to the nearest multiple of $1,000.
As you can see, the tax code for leaving the United States can get complicated. If you are seriously considering moving to Canada, or any other country, contact us for any tax questions you have and let us work it out for you. We have over 30 years of experience working thousands of successful cases.