3 ms·

Interesting. Are you sure taxation ends after 10 years?

by anonymous245 16y ago

stretchwithme 16y ago
yeah, after you forfeit your citizenship, the US expects you to keep paying income tax for ten years.
- loewenskind 16y ago
  Only if you give it up for tax purposes.
dagw 16y ago
I think it depends on if you have any financial dealings with the US. As long as you completely leave (no property, no loans, no investments, drawing no salary from the US, not paying into any of retirement benefits etc. etc.) then yea it will end. On the other hand my mother hasn't lived in the US for close to 35 years now and she still has to file a tax return and pay a few bucks every year, due to still having some financial ties with US.
- loewenskind 16y ago
  No, this is completely wrong. Filing has nothing to do with "having some financial ties with the US", it has to do with being a US citizen. You are double taxes with some extra write-offs [1]. The 10 year thing comes if you give up your citizenship for tax purposes (if you have over $2million in assets this is automatically assumed). In that case you are taxed at a higher rate for 10 years before finally getting off the hook. If you give up your citizen for other reasons then you only have to file for one additional year. Oh yea, if you have $10k at any moment in the course of the year you must report all bank accounts where the money was (i.e. 3k in one account, 5k in another, 2k in a third, report all 3). You wont hear about this rule unless you live in a so-called "tax haven". Guess why that is. [1] This is very complex. For a single earner you can take an exemption on the first ~$80k. In most of the US that's a lot of money. Not necessarily everywhere, so depending on where you live you may hit this pretty fast. Taking the exemption makes you unable to claim certain things so you can also chose not to take the exception and use a more complex form. I have a tax guy do this for me (takes him over 3 hours to go through the paper work) and costs about $1k/year.

Interesting. Are you sure taxation ends after 10 years?

stretchwithme 16y ago

yeah, after you forfeit your citizenship, the US expects you to keep paying income tax for ten years.

loewenskind 16y ago
Only if you give it up for tax purposes.

dagw 16y ago

I think it depends on if you have any financial dealings with the US. As long as you completely leave (no property, no loans, no investments, drawing no salary from the US, not paying into any of retirement benefits etc. etc.) then yea it will end. On the other hand my mother hasn't lived in the US for close to 35 years now and she still has to file a tax return and pay a few bucks every year, due to still having some financial ties with US.

loewenskind 16y ago
No, this is completely wrong. Filing has nothing to do with "having some financial ties with the US", it has to do with being a US citizen. You are double taxes with some extra write-offs [1]. The 10 year thing comes if you give up your citizenship for tax purposes (if you have over $2million in assets this is automatically assumed). In that case you are taxed at a higher rate for 10 years before finally getting off the hook. If you give up your citizen for other reasons then you only have to file for one additional year. Oh yea, if you have $10k at any moment in the course of the year you must report all bank accounts where the money was (i.e. 3k in one account, 5k in another, 2k in a third, report all 3). You wont hear about this rule unless you live in a so-called "tax haven". Guess why that is. [1] This is very complex. For a single earner you can take an exemption on the first ~$80k. In most of the US that's a lot of money. Not necessarily everywhere, so depending on where you live you may hit this pretty fast. Taking the exemption makes you unable to claim certain things so you can also chose not to take the exception and use a more complex form. I have a tax guy do this for me (takes him over 3 hours to go through the paper work) and costs about $1k/year.