1 in 4 expats ‘seriously considering’ renouncing U.S. citizenship


Valentyn Semenov / Eyeem | Eyeem | Getty Images

While many filers dread tax season, Americans living abroad face even bigger yearly burdens — and those are frustrating enough that some want to ditch their U.S. citizenship.

Roughly 1 in 4 American expatriates is “seriously considering” or “planning” to renounce their U.S. citizenship, according to a survey from Greenback Expat Tax Services.

The burden of filing U.S. taxes is the top reason expats want to ditch U.S. citizenship, according to the survey, which polled 3,200 American expats living in 121 countries. 

More from Personal Finance:
How to navigate college tuition and help your 529 balance recover
36% of employees earning $100,000 or more are living paycheck to paycheck
High inflation forces some older Americans to make tough financial choices

“You have people doing what seems to them like very normal things, like saving for retirement, or buying a home,” said David McKeegan, co-founder of Greenback Expat Tax Services. “But when you do it overseas, sometimes you can get yourself into a whole lot of trouble.”

Expats face rigorous tax-filing requirements

‘Willful’ reporting violations come with stiff penalties

Additionally, some Americans must report foreign accounts to the U.S. Department of the Treasury annually via the Report of Foreign Bank and Financial Accounts, or FBAR, or potentially face stiff penalties. 

You must file the FBAR if your combined account values surpass $10,000 at any time during the year, regardless of whether those accounts produce income. 

For example, if you have $5,000 in a savings account and $4,750 in an investment account and the investment account jumps to $5,025 for even a single day, you must report those balances.

The penalties for failure to file depend on whether it’s a “willful” or “nonwillful” violation. However, willful violations come with a fee of the greater of $129,210 or 50% of the balance of your account, for each year with a missing form. 

“It’s a whole headache for people when they get into trouble,” McKeegan added.

American expats feel unheard on tax issues

“What struck me about this most recent survey was the number of people who feel their concerns are less likely to be addressed than people who live inside the U.S.,” McKeegan said.

Indeed, 86% of those surveyed feel the U.S. government is less likely to address their issues than stateside citizens, the survey found.  



Source link

Leave a Reply