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The only way to avoid having to file American taxes as an American is to stop being one, to give up your citizenship. Doing so makes you pay a punitive exit tax
by estebank 6y ago
The only way to avoid having to file American taxes as an American is to stop being one, to give up your citizenship. Doing so makes you pay a punitive exit tax on all you assets as if you had sold them.
Before going down that route, keep in mind that you are obliged to file taxes on your global earnings, but if your "foreign" earnings are taxed at a higher rate than they would in the US and that country has unilateral reciprocity agreements (most places you would be thinking of going would meet both criteria) and you don't have any US income, then you have to file but don't pay anything. If any of the previous points isn't met then you will have to pay the difference. Basically Americans always pay at least an American tax rate, no matter where they are.
- Razengan 6y ago> Doing so makes you pay a punitive exit tax on all you assets as if you had sold them. This sounds like the blasphemy punishments for leaving a religion or cult. What’s the point of that?
- thaumasiotes 6y agoThe point is to make sure you can't avoid paying the inheritance tax just by not being an American when you die. Of course, it's still obviously worth it since your children won't have to pay the inheritance tax again...
- Aeolun 6y agoIf you give up your US citizenship anyway, why would you actually pay them anything? It seems like your obligation to pay the US government ends with your nationality.