US citizens still have an obligation to file US taxes, even when living abroad. In addition, FATCA can complicate international banking for Americans. To simplify their tax filing and banking situiation, many expats therefore consider renouncing their US citizenship.
Renunciation may help in relieving you from future US tax filing requirements. However, it can also have significant tax implications, especially if the IRS considers you a “covered expatriate”.
A covered expat is a US citizen with over $2M of net worth and/or an average annual net tax liability for the preceding 5 years of $190,000 (indexed for inflation).
Covered expats must pay Exit Tax upon renouncing their US citizenship. Proactive planning can minimize this.
Renouncing is a drastic step, and it is not right for everyone. However, for some, it may be the best for their particular situation.
We have significant experience with this delicate process. We can guide you in planning your expatriation and in making the right financial decisions to optimize your tax strategy to minimize potential exit tax. We can also help prepare and file the necessary forms and coach you through the process.
In addition, through our extensive network, we can connect you with trusted service providers, including immigration and tax attorneys, local accountants, and licensed valuation professionals, to assist in the transition.
Our experienced experts at Global Expat Advisors have worked on many expatriation cases, including high-profile, complex international situations.
We can assist you in strategic planning, form preparation, and more throughout the citizenship renunciation process and make this complex process much more straightforward.
Analyze your tax situation and potential exit tax exposure, estimate your tax liability upon renunciation.
Plan for tax implications of Section 877A exit tax for covered expats. Devise strategies to minimize exit tax.
Estimate post-renunciation tax liability and tax treaty implications.
Advise on obtaining a 2nd passport through investments (Dominica, Malta, Grenada).
Giving up your US passport has significant implications and cost.
We have helped many clients successfully navigate this delicate process.
