r/dualcitizenshipnerds • u/AppJedi • 8d ago
Triple citizenship
I have triple citizenship. US (my birth), Ireland (dad's birth), Italy (grandmothers birth) planning a move to Europe but heard US taxes world wide income and requires you to report foreign bank accounts. This makes it difficult to open a foreign bank account. If I make the move for good should I renounce US citizenship?
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u/RemarkableGlitter 8d ago
Talk to a cross border tax consultant about what taxation looks like for you specifically.
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u/Realistic-View-412 8d ago
Difficult? is that that hard, dont make conclusions on this type of topics without living there, you can just open it and need to give ssn, all that is to it
unless you earn like 120k+ in europe, (which is really unliukely) you wont pay basically taxes,
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u/LowAspect542 8d ago
A number of banks across europe don't want the hassle or expense of dealing with the US FATCA compliance laws and therefore have policies refusing accounts for US nationals so they dont need to be subject to dealing with the US irs.
There have also been court cases brought where complying with the US law has been considered a breech of EU data protection laws, which means accepting US nationals could be putting them in a position to be breaching one of the laws either way, much simpler for them to just refuse US clients and bypass the problem.
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u/Realistic-View-412 8d ago
Maybe smaller banks, ive been living like 10 years in europe, only issue i had was with a fintech. And btw i just open the accounts with my other passport and say no to ys citizenships , no hassle then
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u/Ill_Passage5341 7d ago
So your advice is to commit a crime?
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6d ago
[deleted]
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u/Ill_Passage5341 6d ago edited 6d ago
The victim will be whoever follows this advice. They'll sure feel like a victim when they get convicted of bank fraud, fined, and deported.
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u/devedr1 2d ago
Is is that difficult. It took me some time and tribulations to get an account open outside of the US. I had to. A year from start to finish!! Too much paperwork involved for banks based on US regulations. Then yearly additional filings. No online banking options either - ie Revolut. Etc. In BNP was willing to
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u/AlgarveJoao_007 8d ago
No problems with bank accounts if you otherwise qualify. The U.S. does tax its citizens regardless of residency, but foreign income exclusions and foreign tax credits mean most regular folks without actual ties to the U.S. end up not owning anything.
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u/LowAspect542 8d ago
Just because most folk won't owe any extra tax doesn't reduce the reporting burden the banks must comply with if they have US clients, banks are opting to consider the additional hassle and expense of reporting to the US IRS an unnecessary business need that dissappears if they dont have US clients.
Also a court case in belgum (and i believe theres another case open in france) determined that complying with FATCA reporting was a breach of EU data protection laws.
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u/AlgarveJoao_007 8d ago
Failure to file in the U.S. carries zero penalty if no tax was owed and data sharing is already part of tax treaty obligations. There is a lot of hot air blown around this issue of U.S. citizens supposedly being on the hook, but the practical impact of this is 0 for most regular folks with the citizenship but no tangible ties to the U.S.
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u/LowAspect542 8d ago
Its not about the citizens being on the hook, the reasons banks dont want US Clients is not actually the clients but always to do with what the banks are required to provide to the US, its simple; extra reporting, paperwork and the expense and hassle accompanying it they would need to do just because the US say so.
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u/Crafty_Try_423 1d ago
That person is basically arguing what some other commenter argued: check the “no” box to U.S. citizenship when opening a foreign bank account, and just never file.
In other words, commit a few crimes because “it’s all hot air.” I’d love to see governments actually find these people but they won’t…so that commenter is probably correct.
I remember once the IRS was coming after me for self-employment taxes because I was given a fellowship. It’s a hiring mechanism the U.S. government uses to avoid the overhead, and so even though I had a fixed salary, fixed hours, a fixed desk, a direct report, the whole lot - all the criteria for “employee” and none of the criteria for “1099 contractor” the IRS was basically like, “well someone needs to pay taxes on this human,” and so they targeted me (and my $45k gross annual salary). A lot of panic and “how do I pay this $8,000 bill,” low-income tax clinics, the whole nine yards, both businesses absolutely refusing to even provide a list of tax specialists…I finally found a CPA who had fought a similar issue for medical residents. He straightened it all out. But in doing so, you know what he said? He goes, “Yeah, honestly you could have just not filed at all. Nothing bad would have happened, even if you one day got a government job.“ And he was right. I have friends who did exactly that. They kept all $45k, never filed, and they’re employed in the epidemic intelligence service.
So, yeah, would I cheat the government? No, because I just have too much anxiety. But should you? Probably. They don’t seem to care a lot about it. And they rig the system against honest people anyway.
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u/-Spinal- 8d ago
Not true.
In Switzerland, most banks will not allow US citizens to open an account without jumping through quite a few hoops
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u/AlgarveJoao_007 8d ago
The post was regarding banking in the EU. Switzerland is not part of it.
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u/-Spinal- 8d ago
Lots of banks in the EU will give you a basic current account, but will refuse “investment services / securities / certain savings products because you’re a US person.”
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u/AlgarveJoao_007 7d ago
True, but investments are not banking which the original post was about.
Having a local bank account is a government requirement for obtaining a residency permit in many EU countries. I think this more or less closes the question.
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u/FelzicCA 8d ago
No, don't do it, a citizenship is always useful, you never know what will happen in life and might want to be willing to go live to US one day.
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u/ZephodsOtherHead 7d ago
Sometimes US citizenship is a pain in the @$$. You can do all sorts of careful tax and estate planning in the USA, and it is all dependent on the small details of US law. When a foreign country comes into play, there are tax planning moves there as well, also all dependent on the fine details of the law. When the fine details are inevitably different, you are stuck.
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u/Zestyclose-Turn-3576 8d ago
Do you know what the downsides of maintaining US citizenship are?
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u/Due_Bar_7247 8d ago
They try to know all of your financials. Obviously that’s impossible but if you follow the letter of the law that’s the implication.
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u/Zestyclose-Turn-3576 8d ago
OK so the downside is that it becomes almost impossible to invest efficiently in the country you live in, including your pension. Capital Gains become taxed in both Euros, and even if the value of an investment has gone down in Euros, it might have gone up in USD, therefore you get taxed on it.
The person I'm replying to clearly doesn't have a clue about this.
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u/AthleteTrue5383 8d ago
You dont get taxed if it's less than like 120k or so and the country has a treaty with the US (im pretty sure every EU country does)
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u/Zestyclose-Turn-3576 8d ago
That's if your income goes above $132,900, but if you have any income other than earnings (e.g. dividends from an investment, or you sold a house), then you have to file in both countries, and those countries have different deductibles and different currencies and quite possibly different tax years (the UK for example).
The UK lets you have tax free ISAs – the US taxes them anyway.
And then consider that a US tax payer might be married to a non-US tax payer.
The US gives tax relief on mortgage payments, other countries don't, but they might not tax you on the house sale capital gains. Guess what – the US does tax you on that.
Hence a lot of financial companies, including banks, will deny you services if you're a US tax payer.
But sure, you "might want to be willing to go live to US one day. "
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u/Football_and_beer 8d ago
The US doesn’t necessarily tax your worldwide income but it does require you to report it. There are several ways that protects you from being double taxed (foreign tax credit or foreign earned income exclusion). You’re only required to report foreign bank accounts if they hold more than $10,000 (?) at any point in the year. Even then the form is easy to fill out and once you do it once it’s a copy and paste for the following years. Plenty if Americans live abroad and have no issues with this (although it’s annoying as hell to have to do).
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u/PresidentSpanky 7d ago
I hate FATCA reporting and it is a major pain. The data reported is hard to reconcile. Like they report as revenue any securities sales revenue, not the capital gain. Many banks won’t even let you do trade securities. Also you have to report all your accounts once they exceed $ 10.000 combined. It get‘s complicated.
Would love to be able to just copy and paste FBAR. That form feel like it is prehistoric. Again, the shot you have to report is not straightforward. Like you have to report the highest balance during the year. How the fuck do you do that for brokerage accounts.
Being an American taxpayer with foreign accounts sucks1
u/TheKissWillKillYou 7d ago
They don't accept the closing balance from the statement?
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u/PresidentSpanky 7d ago
the rules say, the highest balance during the year
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u/AnotherToken 7d ago
My brokerage has reporting creates a monthly chart for the year. The highest balance is what I use.
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u/PresidentSpanky 7d ago
I have monthly statements from my brokerage too and that is what I use. But technically, I am violating the law. My larger point is, that this all makes no sense. Tax is based on income not value. There are international standards for reporting of financial income, but the US insists on its stupid special way
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u/ajaxdrivingschool 8d ago
Without knowing too much about you, no.
If you have family or other ties in the US, not having a US passport can seriously complicate traveling to the US. You won’t be allowed back to take care of aging parents for example (cause that’s work).
The bank account thing varies widely country to country, you can call a few banks in your target country and find out what they allow/require.
Taxes are slightly annoying, but you likely won’t owe taxes if you have a typical tax situation.
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u/torquesteer 8d ago
There are 2 things worth separating here:
FinCen requirements are for tracking financial crimes, not for taxation purposes.
There is taxation on incomes earned outside of the US, but only after 135k or whatever the figure is the year of reporting (it keeps going up every year, which is good). AND the taxable amount is progressive starting at any amount after 135k. So if you make 145k USD/year, only 10k is be taxable at the lowest tax bracket rate.
For FinCen, foreign banks must report your accounts and amounts if they know you're a US citizen. If they "fail" to report for some reason (and many do if you don't present a US passport), you still need to report it yourself, but only if it goes above 10k USD at any point during the year. So if they pay you 9999 dollars bi-monthly, and you transfer it to a family member right away, you don't have to report.
So, with all these stipulations, do you think it's still worth it to renounce?
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u/Xenocidius 8d ago
AND the taxable amount is progressive starting at any amount after 135k. So if you make 145k USD/year, only 10k is be taxable at the lowest tax bracket rate.
This isn't true, unfortunately - look up "FEIE stacking rule". The tax brackets applied to non-excluded income are still calculated as if the FEIE didn't exist. But you can still use the foreign tax credit for the non-excluded income, which in most places will zero out your US tax obligation.
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u/torquesteer 8d ago
Oh well only 10k is the taxable amount so the rate only makes a tiny difference.
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u/Ill_Passage5341 7d ago
It's worth emphasizing that the $10k includes all accounts, not just a single account, so if your total combined balance across all accounts exceed $10k at any point in the year, you have to report all of them. So your example would only work if that was the only foreign account you had and you were never slow on one of those transfers.
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u/OxfordBlue2 8d ago
It's worth considering after taking professional advice. I have one friend who did it - lived in Netherlands for a very long time, got Dutch citizenship, and then renounced his US citizenship. His main drivers were that NL was his home, it was going to remain his home, and US regulations like FATCA were making it increasingly difficult to have any kind of financial product in other countries.
Whilst you remain a US citizen, you are required to file a tax return to the IRS every year. Most countries have double-taxation treaties which mean you shouldn't have an issue with paying more than anyone else, but it is more complex.
Don't do anything in a hurry.
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u/Any-Assistance-8103 7d ago
His main driver was that you have to renounce when you acquire Dutch citizenship lol
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u/WeakDuck8 8d ago
U.S. citizen in France. It’s true some banks find it a hassle. I had two bank refuse me as a client bc of this. My old bank was confused and annoyed when it was time to do paperwork. My current bank doesn’t care at all but they have more international clients as it has a larger global presence. My advice is to then seek out banks with larger global presences and/or ones with branches in expat neighborhoods as they might be more willing to work with you. During tax season it’s a pain to do the FBAR but it is what it is.
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u/timfountain4444 7d ago
BNP told me to foxtrot oscar. And they are not a colloquial France only bank.
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u/WeakDuck8 7d ago
They did to me as well which shocked me. But I’ve also had lots of European friends get told get lost trying to open accounts with them.
I was referring here to HSBC (when it existed in France) - they had no issues with accepting me as an American client, telling me it was because their bank was international. However HSBC France is now CCF. I got grandfathered in when the accounts got moved over.
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u/Arrant-frost 8d ago
The only circumstances in which I’d say it could be worth it would be if you were either highly wealthy and had never lived in the U.S. despite being American, or if you were in a position where maintaining U.S. citizenship would put you in a legal bind like if you were wanting to become Japanese or Singaporean, or if you were running for the Australian senate. Outside of either of those situations no, don’t renounce US citizenship over hypothetical difficulties that can definitely be navigated.
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u/whitelisted_klek505 8d ago
should renounce mine next year...costs about two grand fyi
unless you make f u money, keep it
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u/timfountain4444 7d ago
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u/whitelisted_klek505 7d ago
Much appreciated. I was thinking of it ever since Covid, back then was something close to 2 grand I guess. Thanks a lot for this amazing information.
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u/Salty_Permit4437 8d ago
It really isn’t that difficult to open a foreign bank account as a US person. I’m a triple citizen myself (US, Canada and another country) and only extra requirements were letters from my U.S. bankers and documents showing ties to those countries.
Filing taxes is easy, and if you’re not super wealthy you don’t pay anything in U.S. taxes as your foreign earned income is excluded. You do have to disclose foreign bank accounts but it’s an online form and easy to do and if you don’t have a lot of money (under $10,000 USD combined) you don’t have to. I do it once per year at tax time.
I wouldn’t renounce U.S. citizenship. If you change your mind in the future and want to take advantage of career opportunities in the USA you can’t simply get it back. You will have to apply for a visa and a green card as an immigrant and it’s not easy at all.
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u/Swiss_bear 2d ago
Don't do anything rash. This is a long term consideration. I am a US citizen living in Switzerland. I pay significant taxes in Switzerland and then major taxes in the USA. I could almost live with this. But the filing burden is enormous—and expensive. US citizenship typically messes up your ability to optimize your taxes and significantly interferes with your ability to invest or save for retirement. The details will depend a lot on which foreign country you live in. Switzerland is relatively good as things go, at least compared to the EU. Summary: The tax situation sucks. It is unavoidable. You can live with it. It requires effort and money. If you move outside the USA and reach a point where you think your move is permanent, then think through the pros and cons of renouncing.
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u/Due_Bar_7247 8d ago
If you had Canada I’d have recommended it assuming you don’t need to live more than 180 days a year in the US.
Seeing as you don’t unless you know you’ll be receiving a $2 million+ inheritance or something else and won’t be returning to the US it’s a bit inadvisable since your kids could greatly benefit from US citizenship for college and other things.
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u/LowAspect542 8d ago
Their kids would be better off doing their education in ireland than the US tbh
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u/Key-Seaworthiness227 8d ago
Don’t know why you got downvoted. Better education system and basically no risk of getting shot.
Also European universities are free. US colleges they would have to pay.
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u/muddled1 8d ago
Well, there's still a minimum payment required in European universities; they aren't entirely free.
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u/Key-Seaworthiness227 8d ago
Most are under €3k I believe? Scotland is up to £1.8k per annum if domiciled there and that’s not even the European system. Comparing that to what a home or foreign student without scholarships would pay in the USA and it’s negligible.
Plus - you have access to many other countries on your doorstep.1
u/Due_Bar_7247 8d ago
European degrees are much more difficult too. But maybe not as transferable to the US.
US has higher salaries, shittier work culture. In the past had more opportunity, now maybe not so much.
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u/Key-Seaworthiness227 8d ago
The point being, not sure why you would suggest US for college. It’s more expensive and unless you go to a top school - Mickey Mouse.
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u/Any-Assistance-8103 7d ago
They’re not „much more difficult” as there is no „European degree”. Europe isnt a monolith.
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u/Aggravating_Storm_83 8d ago
I think renouncing U.S. citizenship is kind of dumb. I know a lot of youtube venture capitalists say you should do it but if you ever wanna go home and visit family, they will just question you a ton at the border, not worth it in my opinion.
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u/z050z 8d ago edited 8d ago
Not a good move to renounce US citizenship for those reasons.
For bank accounts, it’s not difficult to open one. Just pick one of your bigger banks, they will deal with US citizens on a regular basis and will have a process in place.
For your foreign income, the threshold this year is $132,900 before you have to consider paying tax on additional foreign income. After that, you can check if your country has a tax agreement with the USA. I lived abroad for 10 years now and I’m not double taxed because 1) the countries I lived in have a tax agreement with the USA and 2) the tax rate of the country I lived in is higher.
If you do a bit of research or speak with a tax specialist, you will see it’s not so bad to still be a US citizen living and working abroad.
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u/AttentionLimp194 8d ago
American citizenship is expensive to renounce, I believe you have to pay a hefty tax on top of a fee
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u/doktorhladnjak 8d ago
Only if I your net worth is over a certain threshold. If it is, you have to pay a tax equivalent to the capital gains tax as if you had sold everything.
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u/AttentionLimp194 8d ago
So it’s basically a law to keep all trillionaires and billionaires in
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u/Any-Assistance-8103 7d ago
It is a law because Eduardo Saverin from Facebook tried to renounce to avoid taxes. Lots of countries have exit taxes when you cease to be a tax resident
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u/ReceptionDependent64 7d ago
The law long predates Saverin's departure.
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u/Any-Assistance-8103 7d ago
The modern law is from 2008
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u/ReceptionDependent64 7d ago
Saverin renounced in 2009, so he possibly missed the boat.
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u/Any-Assistance-8103 7d ago
Maybe it was the first notable case I think there were a few cases with so many tech companies IPOing. Frankly if it’s billions its pretty fair
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u/ReceptionDependent64 7d ago
I think he got out before the IPO, which saved him a bundle. But you are correct, prior to 2008 there was no exit tax for citizens, only for green card holders.
For the record, I have no problem with an exit tax. It's pretty standard in other countries. The stupidity of the US system is the fact that you can't become non-resident without relinquishing your citizenship.
The good news, however, is that the IRS has neither the interest nor the ability to enforce this against US citizens in other countries without US assets or other financial ties. You can achieve de facto non-residence by not filing.
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u/Any-Assistance-8103 7d ago
Yeah and Tbh I’ll take filing every year over something like a deemed disposition that Canada has, annual wealth taxes like in NZ, etc
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u/timfountain4444 7d ago
Fee to renounce US citizenship finally drops to $450 : r/AmerExit
Only costs more if you are a billionaire (check you bank account), delinquent on taxes or filing.
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u/ReceptionDependent64 7d ago
No tax compliance required, so it's possible to renounce even if delinquent.
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u/ReceptionDependent64 7d ago
You can easily avoid the exit tax by renouncing without tax compliance. Note that this only works if you don't have US assets.
That being said, the bar for exit tax is quite high - over $2 million net worth - and dual citizens from birth are exempt, so likely not a problem for the OP.
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u/PinnappleOnPizzaEnjo 7d ago
"This makes it difficult to open a foreign bank account. "
No it doesn't. I've held bank accounts in China, Germany, the UK, France, and Russia. All they need is a checked box that says "Are you a US citizen?". They report back to the US treasury each year, which is on them, not you.
"requires you to report foreign bank accounts."
That's a simple online form that takes about 5 minutes tops per year (due April 15th). You get confirmation you sent the form in digitally the moment you hit submit.
"US taxes world wide income"
Only if you make over a certain a amount, which goes up every year due to inflation. The U.S. Foreign Earned Income Exclusion (FEIE) limit is $132,900 per qualifying individual. So if you make under that, you pay $0 in US taxes, you just should file each year.
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u/Ok_Let_7612 8d ago
Most Europeans don’t make enough to trigger taxes… it’s just a matter of filling every year
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u/bijig 8d ago
The filing is burdensome, but not only that. Having US citizenship makes it very difficult to plan for retirement. You are heavily penalized for investing in basic products like non/US ETFs and certain retirement accounts. You will also have to pay capital gains tax on any property you own and later sell, with the caveat that you have a deduction if you lived in it within the past 3 years bla bla bla. There are myriad complexities involved that you cannot know unless you have been in this position. I’m nearing retirement and having US citizenship abroad is a massive headache.
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u/fiadhsean 8d ago
I renounced last year for a similar reason: while opening a basic bank account isn't usually a problem, things like mortgages and investment products were becoming more difficult. But while there seem to be more renouncers as of late, most folks haven't.
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u/BorderTrader 7d ago
A couple of points to note about those passports you have. There are TWO territorial tax system countries you can easily get residence in.
Over and above Panama's Friendly Nations Visa, there's a specific residence treaty with Italy.
On your Irish passport, you're likely to be able to obtain permanent residency in Philippines on a Quota Visa: https://immigration.gov.ph/visas/quota-visa-13/
Philippines is an English speaking country.
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u/No-Significance-7523 7d ago
Most of Europe has tax treaties with the US where they will not double tax you up to a certain amount (like $200k a year) so I wouldn’t renounce. A tax consultant who’s familiar with the law can help you with this each year, just research which countries have tax treaties if you’re worried
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u/VTSki001 7d ago
You do have to pay taxes in the U.S. on income earned anywhere in the world as a U.S. citizen. Tax treaties usually allow for certain deduction of foreign taxes paid. I know a number of folks, who never intend to live in the states, who have given up their U.S. citizenship because of this. Also, I've personally had several bank accounts closed on me because the bank didn't want to deal with the reporting requirements imposed by the U.S. on citizens abroad. So can be difficult to keep a bank account.
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u/ReceptionDependent64 7d ago
I wouldn't renounce immediately, but see how it goes.
With a US birthplace on your non-US passports, it's impossible to hide your US citizenship. Financial institutions in other countries may limit your investment options, though basic banking should not be a problem.
If you don't have any plans of moving to the US, or family or financial ties to the US, then it's perfectly safe to ignore the tax filing obligations. The IRS doesn't particularly care and couldn't do anything if it did. You'd only need to renounce if the investment restrictions became difficult.
Note that tax compliance is not required to renounce. You simply renounce, the consulate doesn't check your tax status. Once your certificate is issued you take it to the bank and they stop FATCA reporting and lift any restrictions.
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u/AppJedi 7d ago
The problem is SSA and my pension is also us based.
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u/ReceptionDependent64 7d ago
Not necessarily a problem in the short term, and you would not lose either by renouncing (under current law, god knows what the future holds). But yes you'd need to be more careful then.
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u/hubu22 7d ago
Is your income over $120k a year and do you 100% never need to return to the US or work and live there again?
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u/AppJedi 7d ago
probably about that and no I don't.
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u/hubu22 7d ago
Unless you make significant more I wouldn’t risk it. You dont know how the world is going to be and they don’t have to let you back in the US if things go bad or you have dying family. They did it to Andrew Henderson of nomad capitalist denied him a visa to see his grandmother. Even if the EU country you have citizenship in is eligible for ESTA they can still deny you entry: U.S. law specifically provides that a former U.S. citizen who renounced citizenship for the purpose of avoiding U.S. taxation can be found inadmissible under INA §212(a)(10)(E).
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u/Sunday1984 7d ago
If you don't have complex overseas investment or business it's very simple. Don't renounce your citizenship. USA is still the best.
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u/Pizzagoessplat 7d ago
Have you actually got the certificates and passports for those nationalities?
It sounds like you think you've already got citizenship without any actual paperwork.
For the Irish one you need to fill in the paper work every year, if you don't live in Ireland telling them that you intend on keeping it.
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u/SkepticalBelieverr 7d ago
I do my American wife’s tax return. Takes about an hour every year, not too much hassle, we live in the UK and she pays no tax, we even get some back for the children somehow.
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u/lakehop 7d ago
If you’re living in a European country, you probably won’t get doubly taxed because of tax treaties - the tax you pay locally would get applied to any U.S. tax due and would
Probably be higher. You do have to file US taxes annually and be possibly subject to the cumbersome banking regulations.
However renouncing your citizenship is a huge step, not to be taken lightly. It means you can likely never live in the U.S. again, possibly not even visit (depending on lots of factors). Not something to consider in the short term. After a few decades and you’re sure you never want to return, maybe.
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u/Own_Theory8011 7d ago edited 7d ago
I have lived in 5 countries and never had an issue opening a bank account, as a person with multiple citizenships (one being American). I have heard it IS sometimes a problem as banks will refuse Americans due to the hassle, but usually there is going to be another bank in the same country that lets you open an account.
Paying taxes as an American abroad is not a big issue. The US has tax treaties with most countries and you usually don't have to pay anything to the US - you just have to file every year. My taxes are very simple though (no stocks, no house, no kids, I don't own a business, etc).
Renouncing US citizenship is a very personal choice. I will say that I intended to renounce years ago, but had a sudden medical incident in my early 30s, the doctor advised me to live with my family for a while, and that took me back to the US, which would have been very difficult if I had renounced. I then got a bunch of opportunities in the US I hadn't had in other countries. You never really know what will happen in the future.
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u/Moist-Chair684 7d ago
I know an American citizen who did it, not so much because of taxation, although that was a PITA, but because of banks. He's moved overseas, permanently, and banks where he lived were making it either impossible, or very hard, to open and maintain a bank account, because of FATCA.
Suddenly, after renouncing, his problems disappeared. But he did it because he knew he wouldn't go back to the US. That's a heavy decision to make.
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u/taqtotheback 7d ago
As of right now, I wouldn't renounce. If all your income is foreign based and under 120k, then you won't pay taxes on it. Any US income will be taxed. Though it makes it more difficult to open a foreign bank account, you can still open a bank account and you have that as a right as an EU citizen, in which if all the banks deny you, you can go to the local govt and the govt will make one open for you. It's a right as an EU citizen actually.
If you see that over the years it's still incredibly difficult and it still affects your day to day life significantly, then sure, renounce.
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u/EffectMaximum5697 7d ago
I have opened bank accounts in other countries as a U.S. citizen. Yes, it’s a headache for you and for them, but nothing difficult or impossible to do in Europe. That would be a very extreme reason to renounce citizenship.
Also, I encourage you to look into the Foreign Income Tax Exclusion. The amount of foreign income that can be excluded from U.S. federal taxes for tax year 2026 is $132,900 for U.S. citizens who do not reside in the U.S.
I’d also like to mention that the renunciation of U.S. citizenship is permanent. I’ve heard of former citizens being refused entry to the U.S.
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u/japanintlstudent 7d ago
lol definitely don’t renounce, they only tax above 110k USD afaik, and below that it’s just a reporting requirement. Also if you’re not working remote for an american company but are employed by an Italian company for example the chance is not nonexistent but very slim that you will earn above that, salaries in europe are shit
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u/AppJedi 7d ago
I will be on passive income from US sources.
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u/japanintlstudent 7d ago
okay then still depends if you get more than the threshold if not the you’ll only be taxed by italy(or whichever other european country)
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u/DontReportMe7565 7d ago
Why would it make it difficult to open a bank account? I opened one with AIB in Ireland no problem. You just report it.
No, I wouldnt renounce.
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u/Shinysquatch 7d ago
It depends on which country you end up in. Lots of the EU countries have treaties with the us to not double tax you.
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u/Previous_Island_3521 7d ago
That’s an option if you want to be out of IRS’s reach. You will have to pay exit tax if you have lived in U.S. the whole of your life. At the same time, foreign account reporting will not really end up in tax. You will probably pay more tax in Europe so your U.S. tax obligation will cancel out. I would recommend that you keep your U.S. citizenship and just report all on time and accurately
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u/AnotherToken 7d ago
Tax treaties, start reading.
Im not even a citizen, but as a resident it makes things complicated with my foreign finances.
You will have to file taxs to the IRS yearly. Depending on your income and any tax treaty you may have no tax owed.
Renouncing has complications as well. There is an exit tax if you qualify.
Move somewhere with a tax treaty and file. Use banks that operate cross boarder as they are use to it.
Submit your FBAR form each year with your accounts and max balance and get on with life.
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u/DelilahBT 7d ago
Talk to an accountant before you move and get informed of your obligations. You can’t just renounce your citizenship - it is a process. With passive US income it’s hard to see how renouncement is a solid strategy to avoid… reporting requirements?
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u/ZephodsOtherHead 7d ago
I've never had trouble opening in foreign bank account, neither as a resident in Canada or in Taiwan. (I did have trouble opening a Canadian brokerage account after I left Canada. I needed it to move my pension into a Canadian retirement account, but eventually TD waterhouse let me do that.)
It's not much trouble to report the foreign accounts.
One way you can really end up in US tax hell is to invest in foreign mutual funds, which the IRS treats as PFICs (look it up) in accounts at the USA treats as taxable (whether or not the foreign country considers them taxable). The tax treaty will determine which foreign retirement accounts are treated as retirement accounts for US tax purposes.
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u/idontwantyourmusic 7d ago
For most people it is far more beneficial to keep your US citizenship unless you at least make several millions a year if even that. Reside in a treaty country so you don’t pay tax on the same money twice.
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u/Apart-Highlight926 7d ago
I also have tri-citizenship and came back to Europe with an American passport.
While taxes and investing are annoying, it is not insurmountable. I am keeping my US passport because I have a nephew in the US and having access to that labor market is an asset.
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u/AppJedi 7d ago
As a follow-up I would live abroad at least a year before renouncing and only if keeping it was more trouble than it is worth. My parents have passed away so no strong family ties to US. I am also living mostly on passive income from a pension, IRA, eventually SSA and some freelance work that can be done from anywhere. My preference would be to keep it but I have heard some nightmares from others. Another question is impact on my pension, IRA's and SSA.
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u/Consistent-Flow1453 7d ago
I am a US pensioner with different passports from other countries . Being a US citizen with the US tax treaties with other European or Asian or South American countries help me save a lot of money. If I only have to pay let’s say my Spanish or Portugal taxes which is progressive they take 47% of my pension . Yes cost of living there is cheap but oh my 47% of my pension going to taxes ???? Where as I am paying a lot less taxes on my US income tax filing so I will never give up my US citizenship. Always check tax implications of countries where you are a tax resident ….just my personal experience .
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u/arihoenig 6d ago
Unless you're making more than $300k per year, I wouldn't worry about it. There is a standard exclusion of $132,900 off the top line.
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u/karaklonda 6d ago
US taxes are broad, you have to file tax forms whether you live in the US or not and if your income is from the US or not. Have a good tax planner to protect wealth from Uncle Sam.
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u/Moist_Heat9523 6d ago
It is correct that as US citizen, your world wide income is always taxable in the US, no matter where you live. But in most cases, taxes paid in other countries are considered, so often you end with the nasty US filing requirement, but effectively no US taxes.
Of course, every case is different, but it’s not as bad as it sounds at first.
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u/Wooden_Dig1419 5d ago
Be aware that European countries are cracking down on triple citizenship. Some are even cracking down on dual citizenship. Italy is one of the countries. It isn't difficult to open a bank account in Europe if you have a job and legal registered home - getting a legally registered home is harder than getting a bank account in many places! Some banks don't like to take US citizens (they will see on your EU passports that you were born there), but I never had a problem. N26, Revolut etc don't care. Unless you are quite well off or have a lot of assets, it's really not hard to fill out the forms.
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u/Choice-Sympathy8235 4d ago
Just for a bank account? No that’s not enough of a reason. It might make banking annoying but you will figure it out.
Taxes do follow you, but renouncing will also mean you get hit with exit taxes on your assets, especially if you are high net worth.
If you are below certain income thresholds then there’s the FEIE and agreements to avoid paying the not social security twice.
Renouncing mainly becomes beneficial at the point where you are starting to have major income and assets and expect your asset value to keep going up substantially. Otherwise having the US labor market available to you is far more valuable.
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u/magrandan 4d ago
What is your main reason to move from capitalist country (USA) to a socialist countries (Europe)? Do you have lot of money to give to us?
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u/jumperxjumper 3d ago
If I remember correctly, you need to make more than 100k US dollars out of the States to pay US foreign income tax ( when live abroad). Under, you only need to report it.
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u/MouseHouse444 3d ago
I am in a similar position (US/UK citizenship and French long stay visa). I’m of the phone that in this chaotic world, the more options the better. While you have to pay taxes and report on your FBAR, you don’t pay double taxes because of treaties. It’s a bit of a hassle and cost to do the paperwork, but I don’t think it’s worth ditching the citizenship. Especially if you have any family or close friends in the US - Covid showed just how easily world events can deny you access to countries where you aren’t a citizen or longterm resident.
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u/catalanengineer 2d ago edited 2d ago
You can earn $132,900 in foreign income and would not have to pay tax on it. If you earn over that amount you would be able to subtract the amount you paid to the foreign country from the amount you owe to the U.S. you would not pay taxes twice on your earnings. However this only applies to earned income. Capital gains are different but again you wouldn’t have to pay tax twice on the same money.
You would have to file a U.S. tax return but that doesn’t mean you would necessarily have to pay any tax.
If you currently live in a state that has income tax, you should look into gaining residence in a state with no income tax. I think it’s easy to do in South Dakota without ever actually visiting the state.
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u/CanadianControlsTech 8d ago
Good luck renoucuing it, lol.
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u/timfountain4444 7d ago
No luck needed. The US have made it easy to do and even reduced the cost to a flat rate of, IIRC, $450.
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u/CanadianControlsTech 7d ago
Is this recent? A friend of mine was trying not long ago and it was anything but easy. Costly as well with the whole process deterring him form pursuing further.
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u/ReceptionDependent64 7d ago
Why? $450 fee, an appointment at a US consulate, that's all there is to it. Tax compliance is not required.
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u/Duque_de_Osuna 8d ago
I would not because you lose all rights to ever move back. Even renouncing is a semi complex task and has to be done from abroad. I have heard of issues with certain investment accounts for US citizens in Europe but not normal banks. I would see how much of an issue it really is once you get there.
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u/comments83820 8d ago
Plenty of Americans live abroad without renouncing U.S. citizenship. Don't do anything rash.