[Tail Gunner]

(01-15-2014 01:23 AM)buja Wrote:  

(01-14-2014 03:47 PM)Tail Gunner Wrote:  

Being born in the U.S. means nothing after you renounce your U.S. citizenship.

I have heard (from an immigration attorney) that someone who renounced was able to regain their US citizenship. He didn't give the details.

However, it was a rare case and was not easy.

That being said it would not be wise to count on it.

As I previously stated, if you renounce your U.S. citizenship and want to regain U.S. citizenship, you must go through the time and expense of the entire green card process just like any other immigrant. There is no special treatment for a previous citizen and no guarantee that you will once again become one.

[buja]

(01-15-2014 01:35 AM)Tail Gunner Wrote:  

(01-15-2014 01:23 AM)buja Wrote:  

(01-14-2014 03:47 PM)Tail Gunner Wrote:  

Being born in the U.S. means nothing after you renounce your U.S. citizenship.

I have heard (from an immigration attorney) that someone who renounced was able to regain their US citizenship. He didn't give the details.

However, it was a rare case and was not easy.

That being said it would not be wise to count on it.

As I previously stated, if you renounce your U.S. citizenship and want to regain U.S. citizenship, you must go through the time and expense of the entire green card process just like any other immigrant. There is no special treatment for a previous citizen and no guarantee that you will once again become one.

Sorry I wasn't clear. I meant to state that, according to the attorney, he DID NOT have to become a permanent resident and wait 5 or more years, etc.

Again, a rare case.

[Sp5]

(01-14-2014 07:35 PM)SpecialEd Wrote:  

I was born with dual U.S/EU citizenship. It has been invaluable to me. I did an extended 9 month trip through Europe last year. Over the summer, I had some unexpected cash flows problems so I picked up a restaurant gig in Vienna. I couldn't have done that if I was just an American.

In the future, I will probably drop the American one as I don't like the idea of world wide taxation. If i'm not living in the country, im not paying taxes. PERIOD.

You don't pay US taxes on the first $96,000 or so of foreign earned income. The amount is indexed and goes up every year.

People who have made for formal renunciation of U.S. citizenship have problems getting into the USA. Why? They are rightly suspected of being agents of a foreign government or generally disloyal.

[Tail Gunner]

(01-15-2014 04:38 AM)Sp5 Wrote:  

People who have made for formal renunciation of U.S. citizenship have problems getting into the USA. Why? They are rightly suspected of being agents of a foreign government or generally disloyal.

That is a myth. People who renounce their U.S. citizenship have no greater difficulty obtaining a visa than anyone else, although that could certainly change in the future. In such cases, the U.S. simply wants to ensure that you have sufficient ties to your new home country so that you do not overstay your visa and become an illegal alien.

Quote:

About Getting a Visa After Expatriation

Q. If you expatriate from a consulate away from your new overseas home and wish to apply for a B2 visa from the United States, will the State Department hold that against you? Also, say if an expatriate lived in Malta, and applied for a B2 visa in Toronto, will they invoke the part of the legal code that requires an immigrant to have "strong ties to your home country" so that they won't stay longer than the visa permits? - MF

A. Generally speaking, that doesn't matter. However, consular officials do have a great deal of discretionary authority and occasionally do abuse it. They might disagree with your decision to expatriate at a U.S. consulate outside the country in which you now reside, or that issued your second passport. It's equally possible they could hold it against you if you expatriated at a U.S. consulate in your country of residence or that issued your second passport. Wherever you apply for a U.S. visa after expatriation, you'll need to appear for a personal interview and try to convince the officer that you genuinely intend to return to your "home country" after visiting the United States. If you fail to do so, the consular officer will reject the application.

http://www.nestmann.com/answers-dual-nat...patriation

[SpecialEd]

(01-15-2014 04:38 AM)Sp5 Wrote:  

(01-14-2014 07:35 PM)SpecialEd Wrote:  

I was born with dual U.S/EU citizenship. It has been invaluable to me. I did an extended 9 month trip through Europe last year. Over the summer, I had some unexpected cash flows problems so I picked up a restaurant gig in Vienna. I couldn't have done that if I was just an American.

In the future, I will probably drop the American one as I don't like the idea of world wide taxation. If i'm not living in the country, im not paying taxes. PERIOD.

You don't pay US taxes on the first $96,000 or so of foreign earned income. The amount is indexed and goes up every year.

People who have made for formal renunciation of U.S. citizenship have problems getting into the USA. Why? They are rightly suspected of being agents of a foreign government or generally disloyal.

With inheritance and future investments, I will be making a lot more than $96K. Even if this were not the case, I resent the idea of having to file. Taxes are paid for government services, if you don't live in the jurisdiction of said government then what are you paying them for?

I don't like the leviathan of our current federal government that spends money it doesn't have and invades other nations on a whim. I guess I am disloyal then. As for getting back in, there is always the Rio Grande. A million people a year cross it, why not me?

[Akula]

(01-15-2014 04:38 AM)Sp5 Wrote:  

(01-14-2014 07:35 PM)SpecialEd Wrote:  

I was born with dual U.S/EU citizenship. It has been invaluable to me. I did an extended 9 month trip through Europe last year. Over the summer, I had some unexpected cash flows problems so I picked up a restaurant gig in Vienna. I couldn't have done that if I was just an American.

In the future, I will probably drop the American one as I don't like the idea of world wide taxation. If i'm not living in the country, im not paying taxes. PERIOD.

You don't pay US taxes on the first $96,000 or so of foreign earned income. The amount is indexed and goes up every year.

It's actually a bit higher than $96K now, and you also get a 'rent allowance' that offsets taxable income. This can be a pretty large amount in really expensive domiciles like Moscow.

Re renouncing your US citizenship, I'm pretty sure that you have to pay some sort of 30%+ penalty on ALL your assets if you give up your US passport. That can make it an expensive proposition. Pre-crisis I know a lot of million-dollar guys were giving up their US passports bc they were making a killing in Russia but those days are mostly over now.

[Teutatis]

Yes, I live and work in the US so I pay taxes here, but are you saying that if hypothetically I were to start a business somewhere in the world I would still have to pay taxes on it to the US government, even if I'm not a citizen and just a permanent resident?

[Peregrine]

(01-15-2014 06:48 PM)Teutatis Wrote:  

Yes, I live and work in the US so I pay taxes here, but are you saying that if hypothetically I were to start a business somewhere in the world I would still have to pay taxes on it to the US government, even if I'm not a citizen and just a permanent resident?

That is correct - here's an IRS document (PDF) for reference.

[Teutatis]

Thank you for that, I must admit I wasn't aware this rule applied to permanent residents as well and from what I can tell the only way to avoid double taxation is if the country where you're earning that income has an income tax treaty with the US. I can see how this can easily become very messy.

[Akula]

(01-15-2014 06:48 PM)Teutatis Wrote:  

Yes, I live and work in the US so I pay taxes here, but are you saying that if hypothetically I were to start a business somewhere in the world I would still have to pay taxes on it to the US government, even if I'm not a citizen and just a permanent resident?

Yep. And the US is pretty much the only first world country that does it this way.

Logically it makes no sense for my country of birth to be taxing me at all on income made in a foreign country in foreign currency when I no longer live back home. It's a scam and disgrace and really highlights how economically unjust the US can be. But there aren't enough expats making over the exemption threshold to put up a fight about it I think.

If you did start a business abroad you'd also have to live outside the US for 330 out of the 365 days of the year too. Otherwise you're still considered a US citizen for tax purposes and have to pay US taxes on the full amount. There are tax offsets of course (i.e. if you paid UK taxes for the full year it would pretty much offset US taxes given they would be higher in Britain).

[Laurifer]

Dual citizenship has been beneficial to me because I can freely travel between the USA and Canada as often as I want. I can also work in both countries without zero issues.

Due to a sluggish American economy, both of my brothers have taken up residence in Canada indefinitely and have stable, high-paying jobs versus the dismal prospects they had back in the states (Arizona in particular.)

I'm currently working here as well to save money while I figure out where I want to travel to next.

However, its always a drag having to explain my dual-citizenship status to customs agents every time I'm at the airport.

[hipster]

Taxation of overseas permanent residents is complete non sense not only for the reasons already exposed but they are making their citzens SLAVES, that's exactly what communist countries like Cuba do.

[Peregrine]

(01-17-2014 02:26 AM)Laurifer Wrote:  

However, its always a drag having to explain my dual-citizenship status to customs agents every time I'm at the airport.

What instance(s) would require you to declare your dual citizenship status?

[Peregrine]

You (and I) may not like the USA's policy of global taxation on its citizens, but it's not total nonsense. I imagine the notion stems from the ethos espoused by JFK's "ask what you can do for your country". Citizens are supposedly a part of the team no matter where they reside. If you're making more than 96k, the thinking is that you have enough to contribute to your homeland, to which you should be loyal to.

Granted, I'm only loyal to myself, family, and a few select friends, but I understand where America's tax policy comes from.

[paninaro]

(01-15-2014 12:41 PM)SpecialEd Wrote:  

With inheritance and future investments, I will be making a lot more than $96K. Even if this were not the case, I resent the idea of having to file. Taxes are paid for government services, if you don't live in the jurisdiction of said government then what are you paying them for?

The explanation is that you have the benefits of being a US citizen even when you are living abroad.

But as for the tax thing and it being a burden if you are a US citizen living abroad, what is commonly overlooked is that there's almost always a tax treaty between the US and the other country, which prevents double taxation. So leaving the $96k exemption aside, your overall tax burden will typically be equal to the higher of the two tax rates (the US vs country you live in).

In other words, if you live in Sweden and the effective tax rate is 30%, and in the US it would be 25%, then you pay 30% to Sweden, then on your US tax you get a credit for that tax already paid, and you owe the US nothing.

Also remember to look at the type of income, as the US has vastly different rates. You mentioned income from investments, so that may qualify as capital gain and then you pay "only" 15-20%, and not the earned income tax rate which could be a lot higher.

[SpecialEd]

(01-18-2014 12:13 AM)paninaro Wrote:  

(01-15-2014 12:41 PM)SpecialEd Wrote:  

With inheritance and future investments, I will be making a lot more than $96K. Even if this were not the case, I resent the idea of having to file. Taxes are paid for government services, if you don't live in the jurisdiction of said government then what are you paying them for?

The explanation is that you have the benefits of being a US citizen even when you are living abroad.

But as for the tax thing and it being a burden if you are a US citizen living abroad, what is commonly overlooked is that there's almost always a tax treaty between the US and the other country, which prevents double taxation. So leaving the $96k exemption aside, your overall tax burden will typically be equal to the higher of the two tax rates (the US vs country you live in).

In other words, if you live in Sweden and the effective tax rate is 30%, and in the US it would be 25%, then you pay 30% to Sweden, then on your US tax you get a credit for that tax already paid, and you owe the US nothing.

Also remember to look at the type of income, as the US has vastly different rates. You mentioned income from investments, so that may qualify as capital gain and then you pay "only" 15-20%, and not the earned income tax rate which could be a lot higher.

I am not feeling these benefits. The fact of the matter is the U.S is the only country in the industrialized world that implements world wide taxation. My plan is to split my time between 2-3 countries during the year so that I am not a resident for tax purposes anywhere. Most countries have a 6 month rule. Basically, I would live half of the year in spain, half the year in EE and then kill a few weeks in the tropics.

Of course, being a U.S citizen makes this lifestyle impossible, hence why I will probably have to give it up.

[Ricardinho]

@SpecialEd

Completely agree with you. Although situations like these are never black & white, the benefits have proved to be minuscule so far. Can't fathom it could ever be more useful if you plan on being on being a business owner.

Though,here in Chile at least, massive DHV for being American & having proof doesn't hurt.

[theArbiter]

(01-18-2014 12:13 AM)paninaro Wrote:  

(01-15-2014 12:41 PM)SpecialEd Wrote:  

With inheritance and future investments, I will be making a lot more than $96K. Even if this were not the case, I resent the idea of having to file. Taxes are paid for government services, if you don't live in the jurisdiction of said government then what are you paying them for?

The explanation is that you have the benefits of being a US citizen even when you are living abroad.

But as for the tax thing and it being a burden if you are a US citizen living abroad, what is commonly overlooked is that there's almost always a tax treaty between the US and the other country, which prevents double taxation. So leaving the $96k exemption aside, your overall tax burden will typically be equal to the higher of the two tax rates (the US vs country you live in).

I want to point one thing out because nearly every source online (including posts on this forum) that quotes the 96k exclusion leaves this out: there is no 96k exclusion on self-employment tax. It only applies to federal income tax (state tax is state dependent). You have to pay this stupid self-employment tax right from the very first dollar you earn.

Especially with Social Security funds projected to be rapidly diminishing in a few decades, this is bad news for those who don't plan on collecting.

Sure, there are also some countries with which the United States has international Social Security agreements, though only 5 of the countries are non-Europe. In addition, this is probably only suitable for those who plan on staying long-term in specific countries, not perpetual or even semi-perpetual travelers.

If you're working for a foreign company, however, I don't think you're subject to Social Security tax. Here's a link for some more information.

[paninaro]

(01-18-2014 11:00 PM)theArbiter Wrote:  

I want to point one thing out because nearly every source online (including posts on this forum) that quotes the 96k exclusion leaves this out: there is no 96k exclusion on self-employment tax. It only applies to federal income tax (state tax is state dependent). You have to pay this stupid self-employment tax right from the very first dollar you earn.

I assumed an American who has moved abroad and is self-employed, would start a corporate entity in their new location. Then their income is as dividends, and self employment tax wouldn't come into play. But you are indeed correct that self-employment tax would apply if there is no foreign company established.

[Tail Gunner]

(01-20-2014 01:58 AM)paninaro Wrote:  

(01-18-2014 11:00 PM)theArbiter Wrote:  

I want to point one thing out because nearly every source online (including posts on this forum) that quotes the 96k exclusion leaves this out: there is no 96k exclusion on self-employment tax. It only applies to federal income tax (state tax is state dependent). You have to pay this stupid self-employment tax right from the very first dollar you earn.

I assumed an American who has moved abroad and is self-employed, would start a corporate entity in their new location. Then their income is as dividends, and self employment tax wouldn't come into play. But you are indeed correct that self-employment tax would apply if there is no foreign company established.

You are half right. You must form a foreign corporation, but dividends are always taxed.

Quote:

Third, the Foreign Earned Income Exclusion (FEIE) may be the beginning and the end of the tax planning you require. (This is discussed in detail here.) As an American citizen living and working abroad who qualifies for the FEIE, your first US$97,600 (for 2013) of earned income is tax-free in the States.

Note, though, that the FEIE applies to earned income only. It’s no help when it comes to investment, dividend, interest, or capital gain income.

Quote:

Remember, though, that the FEIE applies only to federal income tax. If you're using it as the beginning and the end of your international tax management strategy, you're still liable for Medicare, Social Security, and FICA ...which amount to about 7.5% a year. And your employer is required to match your Medicare, Social Security, and FICA contributions, so your situation is costing him about 7.5%, as well.

Plus, if you're self-employed abroad but operating without a corporation, you're liable for 100% of FICA and Social Security...and you can suffer a reduction of your FEIE based on business expenses you claim.

Quote:

To maximize the tax benefits of residing abroad and (legally) minimize your total tax obligation in the U.S., here's what you want to do:

First, form an offshore corporation in a zero-tax jurisdiction, register that company with the IRS, and open a foreign bank account in its name.

Second, draw a salary of up to US$97,600 from that foreign corporation. As long as you qualify for the FEIE, and the company's income is derived from active, not passive, business, you will have no U.S. federal income tax liability on this income.

Voliá. The properly registered and domiciled as foreign corporation is not responsible for Medicare, Social Security, or FICA.

Furthermore, you are now not self-employed; you are an employee of your offshore corporation, and therefore not subject to self-employment taxes either (that is, no Social Security, no Medicare, no FICA).

Plus, all the expenses of the offshore corporation are now additional deductions and do not reduce your Foreign Earned Income Exclusion.

http://www.liveandinvestoverseas.com/rea...-2013.html