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Not to mention that you still need to pay taxes to the IRS even if you live abroad. Want to not pay taxes? You must renounce your US citizenship. Want to renou

Not to mention that you still need to pay taxes to the IRS even if you live abroad. Want to not pay taxes? You must renounce your US citizenship. Want to renounce your citizenship? You must now pay an expatriation/exit tax on your assets that can range from hundreds of thousands to millions of dollars for some retirees. If you are born in the United States, you are truly stuck here and forced to pay a forever tax by virtue of being alive.

giantg2 5y ago
I guess one could have hidden accounts or have them in banks that won't work with the US gov, and live in a non-extradition areas...
- Teknoman117 5y ago
  That's what Eduardo Saverin did (one of the co-founders of Facebook). Settled out of court, moved all the money out of country, ran off to Singapore, and renounced his citizenship. Dodged some $700 million in taxes. IIRC he's barred from entry into the US for any reason until he pays back taxes or something.
dlisboa 5y ago
I don’t think those people really care about paying US taxes considering life is so cheap in Vietnam. The mere fact of not paying American prices for housing, healthcare, food, etc is a substantial discount. The tax money they lost will not make that much of a difference there, as opposed to Europe.
hungryforcodes 5y ago
But then you have another problem. If you renounce your citizenship -- which passport will you use to enter into Vietnam, or which ever country you'd like to stay in.
wing-_-nuts 5y ago
US LTCG taxes are ridiculously low (0% under the 15% tax bracket), and that's going to be the primary income source for early retirees. This is such an overblown argument unless you're working overseas and then you're often very well paid AND countries often have tax treaties to give you a break.
- MandieD 5y ago
  Middle class, working-age Americans with normal IT jobs in the EU sigh, look longingly at their (if lucky) dormant 401k/Roth accounts back home, realize they really are going to be working until retirement age because no one will open a brokerage account for an American here, and that while tax treaties generally prevent double taxation on wage income, things get “fun” on just about anything else.
  - wing-_-nuts 5y ago
    If I lived abroad, I'd make my parent's address my primary address and keep all us accounts tied to it. Transfer money via crypto stablecoin (Ironically, sending money internationally is crypto's only killer app) and invest with your US accounts until you gain whatever residency / citizenship that allows one access to the financial system in your country.
    - MandieD 5y ago
      That is a terrible idea come tax-time if you claim residence abroad. Also, according to expat chitchat, Vanguard is particularly good at sussing out clients who claim Stateside addresses but don’t actually live there.
arn 5y ago
There's a foreign tax credit up to $100k. So, for the retired, I don't think paying extra tax is an issue.
- MandieD 5y ago
  Foreign Earned Income Exclusion. Not any other sort of income, including things like parental leave benefits. (Not exactly) Pro-tip: if you are in pretty much any EU country, and have anything on top of earned income (rental income, any form of government-paid benefits), you are possibly better off not claiming the FEIE - there’s a reason you have to specifically request it when filing, and it’s not because the IRS want to be jerks (about that, anyway).
FooBarBizBazz 5y ago
Is it really so bad to just keep your US citizenship? I understand that, if you're working and making any reasonable amount of money, you're going to get hit with a lot of double taxation, which sucks. Plus FATCA and the other annoyances. But say you're retired with a modest burn rate. Then, between the Foreign Tax Credit and the Foreign Earned Income Exclusion, you won't really have to pay much in US tax, right?
pkaye 5y ago
Looking it up there is a $2m threshold before this tax matters. Then there are various yearly tax exclusions and credit that make this negligible for average retirees.
more_corn 5y ago
Americans living in foreign countries have to pay taxes on income over $100k if I’m not mistaken. You do still have to file though. Which is bullshit. And the expensive , laborious process for renouncing citizenship is also bullshit.
krageon 5y ago
If you simply never go back, the odds are high you will never be bothered by this. And if you won't be bothered, the rules are not important.

giantg2 5y ago

I guess one could have hidden accounts or have them in banks that won't work with the US gov, and live in a non-extradition areas...

Teknoman117 5y ago
That's what Eduardo Saverin did (one of the co-founders of Facebook). Settled out of court, moved all the money out of country, ran off to Singapore, and renounced his citizenship. Dodged some $700 million in taxes. IIRC he's barred from entry into the US for any reason until he pays back taxes or something.

dlisboa 5y ago

I don’t think those people really care about paying US taxes considering life is so cheap in Vietnam. The mere fact of not paying American prices for housing, healthcare, food, etc is a substantial discount. The tax money they lost will not make that much of a difference there, as opposed to Europe.

hungryforcodes 5y ago

But then you have another problem. If you renounce your citizenship -- which passport will you use to enter into Vietnam, or which ever country you'd like to stay in.

wing-_-nuts 5y ago

US LTCG taxes are ridiculously low (0% under the 15% tax bracket), and that's going to be the primary income source for early retirees. This is such an overblown argument unless you're working overseas and then you're often very well paid AND countries often have tax treaties to give you a break.

MandieD 5y ago
Middle class, working-age Americans with normal IT jobs in the EU sigh, look longingly at their (if lucky) dormant 401k/Roth accounts back home, realize they really are going to be working until retirement age because no one will open a brokerage account for an American here, and that while tax treaties generally prevent double taxation on wage income, things get “fun” on just about anything else.
- wing-_-nuts 5y ago
  If I lived abroad, I'd make my parent's address my primary address and keep all us accounts tied to it. Transfer money via crypto stablecoin (Ironically, sending money internationally is crypto's only killer app) and invest with your US accounts until you gain whatever residency / citizenship that allows one access to the financial system in your country.
  - MandieD 5y ago
    That is a terrible idea come tax-time if you claim residence abroad. Also, according to expat chitchat, Vanguard is particularly good at sussing out clients who claim Stateside addresses but don’t actually live there.

arn 5y ago

There's a foreign tax credit up to $100k. So, for the retired, I don't think paying extra tax is an issue.

MandieD 5y ago
Foreign Earned Income Exclusion. Not any other sort of income, including things like parental leave benefits. (Not exactly) Pro-tip: if you are in pretty much any EU country, and have anything on top of earned income (rental income, any form of government-paid benefits), you are possibly better off not claiming the FEIE - there’s a reason you have to specifically request it when filing, and it’s not because the IRS want to be jerks (about that, anyway).

FooBarBizBazz 5y ago

Is it really so bad to just keep your US citizenship? I understand that, if you're working and making any reasonable amount of money, you're going to get hit with a lot of double taxation, which sucks. Plus FATCA and the other annoyances. But say you're retired with a modest burn rate. Then, between the Foreign Tax Credit and the Foreign Earned Income Exclusion, you won't really have to pay much in US tax, right?

pkaye 5y ago

Looking it up there is a $2m threshold before this tax matters. Then there are various yearly tax exclusions and credit that make this negligible for average retirees.

more_corn 5y ago

Americans living in foreign countries have to pay taxes on income over $100k if I’m not mistaken. You do still have to file though. Which is bullshit. And the expensive , laborious process for renouncing citizenship is also bullshit.

krageon 5y ago

If you simply never go back, the odds are high you will never be bothered by this. And if you won't be bothered, the rules are not important.