As David927 mentions you probably don't owe anything. But you still need to file 1040's and 2555 for every year. So few Americans actually do it, you get the fe

As David927 mentions you probably don't owe anything. But you still need to file 1040's and 2555 for every year. So few Americans actually do it, you get the feeling that they are so happy to just receive them. Before returning to the US I did a batch of 5 tax returns with no tax liability. The other thing to note is that if you are married even to a foreign spouse without green card you can file jointly and you now get a full $182,800 exclusion. There are also rules where you can deduct further for housing expenses as well as tax paid locally. This is the IRS guide you should read. http://www.irs.gov/publications/p54/index.html http://www.irs.gov/publications/p54/index.html The bad news though is that for entrepreneurs, consultants etc. If you are self employed, in a partnership (including LLC's) you are not exempt from paying self employment tax (15.3% of the first $106,000 earned. This is likely the biggest issue for some of the people renouncing citizenship. The second issue also mentioned in the article is reporting of bank accounts containing more than $10k. Final bad news for US entrepreneurs abroad is that your startup might be classified as a Controlled Foreign Corporation, which in theory could lead to it being taxed in the US. These rules are so complex they make my head hurt just thinking of them. This PDF seems to explain it fairly well: http://www.avcadvisory.com/documents/pdf/CFC.pdf http://www.avcadvisory.com/documents/pdf/CFC.pdf