A growing number of US expats are giving up their citizenship, citing FBAR filing requirements and tax complexity as key reasons.
More Americans living abroad are renouncing their US citizenship, and tax compliance is a major driver. US citizens must file the Foreign Bank Account Report (FBAR) if they have foreign financial accounts totaling over $10,000, and they owe US income tax on worldwide earnings—even if they live and work entirely outside the country.
The Foreign Earned Income Exclusion (FEIE) lets you exclude roughly $120,000 of foreign earned income from US tax, and the Foreign Tax Credit helps you avoid double taxation, but the filing requirements remain complex. Many expats find the annual compliance burden—FBAR, FATCA forms, state tax filings—exhausting and expensive if they need an accountant familiar with expat taxes.
FBAR and worldwide tax filing drive some expats to renounce—but renunciation has permanent consequences.
Renouncing citizenship is a serious step with lasting consequences: you lose the right to live or work in the US, and you'll owe an exit tax on unrealized gains if your net worth exceeds $2 million. Before you consider renunciation, talk to a cross-border tax attorney. There may be simpler compliance strategies or visa options that let you stay abroad without giving up your passport.
Source: original report ↗
Free alerts
Free: the visa and tax changes that move your plans.
Get the immigration, residency and tax changes that actually affect living abroad — verified, dated, and explained, in your inbox. Free, and one click to leave.
Free · weekly · unsubscribe anytime. Privacy.
Knowing the rule changed is the easy part.
Seasoned Expat Pro tells you what each visa change, tax rule and residency decision actually means for your move — and the paperwork it changes — in a two-minute read.
Get the edge · $20/mo
Join the readers who move before the rules do. Cancel anytime, one click.
