What happens if I give up my U.S. citizenship?

Renouncing your U.S. citizenship means that you: Give up your rights and responsibilities as a U.S. citizen. Must become a citizen of another nation, or risk becoming “stateless.” May need a visa to visit the United States.

Do you still pay taxes if you leave the US?

Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.

How much is the US exit tax?

The exit tax is a tax on the built-in appreciation in the expatriate’s property (such as a house), as if the property had been sold for its fair market value on the day before expatriation. The current maximum capital gains rate is 23.8\%, which includes the 20\% capital gains tax and the 3.8\% net investment income tax.

How do taxes work if you have dual citizenship?

For individuals who are dual citizens of the U.S. and another country, the U.S. imposes taxes on its citizens for income earned anywhere in the world. If you are living in your country of dual residence that is not the U.S., you may owe taxes both to the U.S. government and to the country where the income was earned.

How can I renounce my US citizenship without a tax return?

In order to renounce your US citizenship, you have to show that you have been tax compliant for the last 5 years. If you contemplate giving up your citizenship because you haven’t filed US tax returns and FBAR in previous years, you may be in for a surprise. As a non-compliant individual you are a “covered expat” and subject to exit tax.

Why would someone want to renounce their citizenship?

Tax Reasons for Renouncing U.S. Citizenship As mentioned, many people renounce their citizenship to avoid new tax rules in the United States that add extra layers and fees to tax preparation. One tax regulation that caused several people to consider renunciation is the Foreign Account Tax Compliance Act of 2010 (FATCA).

Do previous tax obligations carry over after renouncing citizenship?

Any previous tax obligations will carry over until certain documents are filed. For example, you must file a Form 8854 and file a copy of this form with the Department of Treasury after renouncing your citizenship. In addition to filing a Form 8854, you must also have filed your taxes for the past five years.

Do I have to pay taxes on capital gains from citizenship renovation?

While the first $713,000 of capital gains is not taxed, you may still end up with a hefty tax bill. There are some qualified individuals who can renounce their citizenship without being subject to taxes based on their assets or income.