2

I'm a young (20 years old) American (with French dual citizenship) living in Europe currently considering renouncing my US citizenship. However, I'm quite intimidated by the amount of paperwork, especially regarding taxes.

That being said, I've never paid US taxes in my life as I've never really earned taxable income before, being as young as I am and never having a job that paid above the threshold.

Would this simplify matters for me if I were to go to renounce? Is there still any papers I'd need to fill out in regards to taxes? Thanks so much in advance everyone (:

EDIT: clarified that I'm a French citizen.

  • According to this article (item6) nomadcapitalist.com/2018/06/16/tax-consequences-of-renouncing there are at least some final reporting obligations you’d need to complete. – Traveller Aug 9 at 15:58
  • 1
    Read about the tax treaties mentioned by @WGroleau. Maybe you won't owe any taxes. Look at the travel Stackexchange and see how capricious Customs and Border protection can be; any chance you might end up in a career where it would be an advantage to be able to be guaranteed entry to the US, and be able to work while your visiting? If so , don't renounce. – Gerard Ashton Aug 11 at 10:54
1

Last time I checked, there is a hefty “exit fee” in addition to the paperwork. Might be easier to read the U.S./France* tax treaty and avoid any type of income that USA can tax. Or stay out of USA and don’t make enough for them to bother requesting extradition.

*If you plan to live outside of France, you’d have to read three tax treaties.

  • 1
    A large number of European financial institutions don't want anything to do with American citizens (because it significantly increases their exposure). Thus it may be worth the OP renouncing just to increase the range of institutions they can use. (The other answer suggests that the "exit fee" won't apply.) – Martin Bonner supports Monica Aug 12 at 7:54
  • Whether you call it “exit fee” or “$2350 fine,” the government web page I read didn’t mention any exemption. The banking issue is a consideration. But I didn’t have to give my SSN when I opened a bank account in Spain, though they knew I had a US passport. – WGroleau Aug 12 at 14:13
  • @WGroleau How long ago did you open the Spain account? – David supports Monica Aug 12 at 14:20
  • LaCaixa account opened 10 Feb 2017. Later (May or June), closed it and opened a new one using my NIE (Spanish ID) instead of my passport number. The NIE tells anyone at a glance that I am not a citizen, but to get any details, you have to consult the government database. And that identifies me as an American citizen but does not contain my SSN (nor any address except the hostel in Spain I listed on the application). It may contain an image of a photocopy of my passport that had to be attached to the application. – WGroleau Aug 12 at 14:31
  • I have an account in Belgium and even using my French passport, they saw a US place of birth and therefore marked me as American and asked for my SSN. – Yvain Aug 13 at 8:09
1

The renunciation process requires you to be caught up on your US tax obligation, which may mean filing up to 8 tax returns at one time as well as the Foreign Bank Account Reports. The actual steps to renounce your citizenship and the number of returns required can vary based on the rules in your local US embassy, so it's recommended that you speak with someone there first, and then contacting a CPA to file your returns if needed.

You will also want to be aware of exit taxes. From your initial post, it doesn't sounds like you will be considered a covered expat, so I don't believe you have anything to be aware of here. You will want to be aware of Form 8854 and the $2350 fine that goes with renouncing. Good luck if you decide to move forward with it.

  • What would my tax returns look like as someone who has never earned taxable income in their life? I have no assets other than what's in my bank account and personal objects like my phone and computer, seeing as I'm just a young student who for the moment is still financially dependent on his parents. – Yvain Aug 13 at 8:09
  • Whether you must file a US income tax return depends upon your calendar year "earnings from worldwide sources." That may not be the same as your concept of "earned taxable income." For 2018 amounts, see IRS Publication 54, "Tax Guides for US Citizens Abroad," found here: irs.gov/pub/irs-pdf/p54.pdf – David supports Monica Aug 13 at 20:27

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.