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Giving up residency in the US
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BocaNY



Joined: 24 Mar 2009
Posts: 131

PostPosted: Tue Jul 29, 2014 4:50 pm    Post subject: Giving up residency in the US Reply with quote

Hi,

I was wondering if this could be done and if anyone has done it? What would it mean for a US citizen to do so? Does it get you out of paying states taxes? I know you won't be able to vote but other then that what are the pros & cons?

Cheers.
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nomad soul



Joined: 31 Jan 2010
Posts: 11448
Location: The real world

PostPosted: Tue Jul 29, 2014 5:03 pm    Post subject: Reply with quote

You mean renounce one's US citizenship. Frankly, those who did aren't likely to show up on this forum.

I posted this topic a few months ago: "More Americans renounce citizenship but deny stereotype" (http://forums.eslcafe.com/job/viewtopic.php?t=106720).


Last edited by nomad soul on Tue Jul 29, 2014 6:08 pm; edited 1 time in total
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spiral78



Joined: 05 Apr 2004
Posts: 11524
Location: On a Short Leash

PostPosted: Tue Jul 29, 2014 5:06 pm    Post subject: Reply with quote

No, actually, it's possible to maintain no residence in the US and retain citizenship (my current status).

You CAN in fact vote in national elections, from the state which was your last place of residence.

You do not have to file or pay state taxes, but you do have to file (probably not pay, as an EFL teacher!) federal tax forms annually, and you are responsible to report on FBAR any foreign account with 10,000 usd equivalent or more in any year.
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BocaNY



Joined: 24 Mar 2009
Posts: 131

PostPosted: Tue Jul 29, 2014 5:21 pm    Post subject: Reply with quote

Thanks Spiral.

Do you think it's worth it? What is FBAR? Do you know the gov website by any chance?
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spiral78



Joined: 05 Apr 2004
Posts: 11524
Location: On a Short Leash

PostPosted: Tue Jul 29, 2014 5:27 pm    Post subject: Reply with quote

For me, it's totally worth it. I don't own anything in the US, including a bank account, haven't earned a US dollar since 1998, and have no plans ever to return. Frankly, I'll give up citizenship when I have time to go through the process.

But I've been on 'no US residence' since 2000 and I personally think it simplifies things.

You can google FBAR - go to the IRS site.
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BocaNY



Joined: 24 Mar 2009
Posts: 131

PostPosted: Tue Jul 29, 2014 6:20 pm    Post subject: Reply with quote

Thanks again Spiral. I was reading the IRS stuff and it maybe my head hurt. Rolling Eyes LOL. Where or who do you contact if you want to maintain no residency? The only thing I own in the US is a bank account and a few credit cards.
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nomad soul



Joined: 31 Jan 2010
Posts: 11448
Location: The real world

PostPosted: Tue Jul 29, 2014 6:26 pm    Post subject: Reply with quote

BocaNY:

Sorry, I misunderstood. You want to keep US citizenship for whatever reasons, but live out the rest of your life outside the country.

From the FBAR site:
FBAR Assistance
Help in completing the FBAR is available Monday through Friday, 8 a.m. to 4:30 p.m. Eastern Time, at 866-270-0733 (toll-free inside the U.S.) or 313-234-6146 (not toll-free, for callers outside the U.S.). Questions regarding the FBAR can be sent to [email protected].
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spiral78



Joined: 05 Apr 2004
Posts: 11524
Location: On a Short Leash

PostPosted: Tue Jul 29, 2014 6:33 pm    Post subject: Reply with quote

Quote:
Where or who do you contact if you want to maintain no residency?


My last state of residence was Virginia (another reason I haven't given up citizenship - it's a swing state in national elections, so I can fantasize that my vote actually counts for something;-)).

I contacted the state voting registration and filled out a form saying that I no longer maintained a residence in Virginia (or in any other state) and am officially registered as (an independent) voter whose vote is counted in the state of Virginia. This freed me from tax requirements in Virginia.

Not sure if it's the same in all states - or if the procedure has changed over the past 15 years - but your last state of residence voting registration centre is probably a reasonable place to start.
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spiral78



Joined: 05 Apr 2004
Posts: 11524
Location: On a Short Leash

PostPosted: Tue Jul 29, 2014 6:38 pm    Post subject: Reply with quote

On a side note, I have serious reservations about the whole FBAR thing. It's not really designed to 'catch' people like EFL teachers, but like many IRS functions, it seems to assume guilt rather than innocence.

My spouse is not a US citizen and has never been employed in the US. Our income is nothing to do with the US, and it worries me that I must report bank accounts which contain nothing whatsoever owing to the US.

I'd like to trust the IRS, but they made a mistake years ago that cost me 7 years of bad credit (a lien on me that was in fact an IRS error). It also cost me 7 years of stress and strain to get them to take it off. After this experience, I'm obviously gun-shy about reporting our assets, even though I'm doing absolutely nothing off-color in terms of filing or paying anything due to the US.

Nomadsoul's pointed out that a growing number of US expats are renouncing citizenship for this reason....I may in fact join them at some point.
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BadBeagleBad



Joined: 23 Aug 2010
Posts: 1186
Location: 24.18105,-103.25185

PostPosted: Tue Jul 29, 2014 10:01 pm    Post subject: Reply with quote

spiral78 wrote:
On a side note, I have serious reservations about the whole FBAR thing. It's not really designed to 'catch' people like EFL teachers, but like many IRS functions, it seems to assume guilt rather than innocence.

My spouse is not a US citizen and has never been employed in the US. Our income is nothing to do with the US, and it worries me that I must report bank accounts which contain nothing whatsoever owing to the US.

I'd like to trust the IRS, but they made a mistake years ago that cost me 7 years of bad credit (a lien on me that was in fact an IRS error). It also cost me 7 years of stress and strain to get them to take it off. After this experience, I'm obviously gun-shy about reporting our assets, even though I'm doing absolutely nothing off-color in terms of filing or paying anything due to the US.

Nomadsoul's pointed out that a growing number of US expats are renouncing citizenship for this reason....I may in fact join them at some point.


I am in the process of renoucing. It is a major pain, but I have assets in Mexico that are not in my name for just that reason. My husband is not a US citizen and we have no plans to live in the US, ever. We don't have a joint bank account and I don't file joint taxes, because I think it is ridiculous to have to report his non US income, or for the IRS to have access to information about HIS money. Morally, it is also blurry to me. I can open an account as a Mexican citizen, with my Mexican papers, that the US would likely not have any way to trace, but if they did, I could be in trouble, so it is just easier for me to give it up. Not something I did lightly, but after a lot of thought, it really seemed like the only possible solution unless I want everything to be in my husband's name. Not that I think that is a problem, but in case he were to pass away before I do, even though I am on everything as the survivor who knows how easy, or hard, it would be to get everything taken care of.
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naturegirl321



Joined: 04 May 2003
Posts: 9041
Location: home sweet home

PostPosted: Wed Jul 30, 2014 3:52 am    Post subject: Reply with quote

Get everything out of the USA. Property, credit cards, bank accounts, etc. anything you have that could tie you there.
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BocaNY



Joined: 24 Mar 2009
Posts: 131

PostPosted: Thu Jul 31, 2014 11:15 am    Post subject: Reply with quote

This makes me wish I still had residency in FL..no state taxes. :/ The FBAR seems kinda messed up. It seems that if you open a foreign account for retirement you have to report it and the US gov't can then tax it if they want. That seems very unfair. I don't get why the US is the only country that taxes it's citizens on wages they made overseas.
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nomad soul



Joined: 31 Jan 2010
Posts: 11448
Location: The real world

PostPosted: Thu Jul 31, 2014 11:35 am    Post subject: Reply with quote

You might find "US Taxes Abroad for Dummies" (http://americansabroad.org/issues/taxation/us-taxes-abroad-dummies/) useful.
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spiral78



Joined: 05 Apr 2004
Posts: 11524
Location: On a Short Leash

PostPosted: Thu Jul 31, 2014 12:19 pm    Post subject: Reply with quote

Quote:
the US gov't can then tax it if they want.


Technically, no, they can't tax the income of a full-time resident abroad unless you make over something around 90,000 usd/equivalent in a given year. As this is unlikely, taxes aren't really a worry.
At least, that's the current law!

However, the fact that they have exact bank account information for couples where one spouse is not a US citizen worries quite a lot of people.
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naturegirl321



Joined: 04 May 2003
Posts: 9041
Location: home sweet home

PostPosted: Thu Jul 31, 2014 2:56 pm    Post subject: Reply with quote

Spiral is right. People have taken the issue to court. Some have won. I make less than the 90ish K and I still pay taxes. If you are self employed or have property or income from stocks for example you're still supposed to pay.

With that being said I've worked with many people who weren't even aware that they had to file. And they hadn't for years. But if you ever go back it could cause problems. A friend of mine had to backfile because of the FAFSA. Another because he needed to get his wife a visa. Another to take out a mortgage.
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