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I'm a digital nomad. Should I renounce my US citizenship?

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Re: I'm a digital nomad. Should I renounce my US citizenship?

#41

Post by toastal »

gregjor wrote: post #6

US citizens who live abroad for at least 330 days a year, or establish permanent residence abroad, may qualify for the Foreign Earned Income Exclusion (FEIE). that FEIE excludes the first $112,000 of income from federal income tax, double that for a married couple. Social Security/Medicare (aka self-employment tax) are not excluded. Most states will want state income tax, so establish residence in a state with no inc…

> Medicare

What a joke. I'm all for getting medical care to people in general, but you can't redeem Medicare abroad. There are no shared medical treaties. You can't get a voucher. You can't even get exemptions for living abroad. You just pay in, and if you want value for paying in your whole life, you have to expend greenhouse gases flying back to the US and pay their extortionate health care prices which are probably cheaper uninsured where you are (at least it has been for me).

That picture people have of retiring on a beach abroad, well, most of them stop once they realize they won't be covered for basically anything at their retirement age. https://www.cnbc.com/2019/08/08/retiring-overseas-how-medica...

More info: https://www.medicare.gov/Pubs/pdf/11037-Medicare-Coverage-Ou...

Re: I'm a digital nomad. Should I renounce my US citizenship?

#42

Post by brobinson »

0xy wrote: post #12
gregjor wrote: post #6

US citizens who live abroad for at least 330 days a year, or establish permanent residence abroad, may qualify for the Foreign Earned Income Exclusion (FEIE). that FEIE excludes the first $112,000 of income from federal income tax, double that for a married couple. Social Security/Medicare (aka self-employment tax) are not excluded. Most states will want state income tax, so establish residence in a state with no inc…

>Most states will want state income tax, so establish residence in a state with no income tax before going nomading. Is this true? I thought that was only the case if they could prove you are an active resident. Of course, if you maintain a mailing address or residence in California/NY then you better believe they'll make sure you pay. If you cut ties completely, they don't have grounds to come after you.

California actually has a guide for this: https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf

Re: I'm a digital nomad. Should I renounce my US citizenship?

#43

Post by CryptoPunk »

bryanrasmussen wrote: post #39
CryptoPunk wrote: post #18

Earlier quoted context omitted.

He saved a massive amount on capital gains tax, and any possible wealth tax that might be created in the US in the future.

yes, I'm aware of his wealth, hence my referring to Solon and Croesus.

Ah, gotcha

Re: I'm a digital nomad. Should I renounce my US citizenship?

#44

Post by switch007 »

mike_d wrote: post #17

The easy answer: It doesn't matter. Regardless of what you decide there is a 30,000 person waiting list for applications to be processed. They conveniently stopped during the pandemic and even now are processing maybe a dozen a month (all the names are published in the federal register so you can track it yourself). Most embassies and consulates aren't even taking appointments to process the form: https://uk.usembass…

I can’t stand this 1984 English:

“The U.S. Embassy London is currently unable to accept appointments for Loss of Nationality applications.”

No, they are not “unable”, they are unwilling or refusing.

Re: I'm a digital nomad. Should I renounce my US citizenship?

#45

Post by krageon »

bryanrasmussen wrote: post #5
SoftwarePatent wrote: post #4

Earlier quoted context omitted.

The article also talks about Eduardo Saverin, born Brazilian, become American, then renounced in favor of Singapore.

I'm not sure I am convinced that Saverin should have renounced, I think that decision may end up a modern example of Solon's advice to Croesus, but maybe that is just my western liberal prejudice against Singapore coming through.

> my western liberal prejudice against Singapore

What is there to be prejudiced against for Singapore? It is a singularly good place to live by basically every metric an actual human being could care about. Low crime, clean, high resident satisfaction, good schools, etc.

Re: I'm a digital nomad. Should I renounce my US citizenship?

#46

Post by [deleted] »

beagle3 wrote: post #30
idontwantthis wrote: post #9

Earlier quoted context omitted.

Yeah this article is really pointless because it doesn't mention this. I'm an American citizen living abroad (still digital, no longer nomadic). I only pay SS and Medicare tax to the US. Do not give up your US Citizenship for tax avoidance unless you are earning > $200k per year or making a lot of unearned income outside of the US. Or you are in some weird situation where you permanently want to be in the US more tha…

How do you pay SS and Medicare? I know someone in your situation who was trying to and was told you can only do that if you have US income source (which they don’t have)

[deleted]

Re: I'm a digital nomad. Should I renounce my US citizenship?

#47

Post by silverpepsi »

beagle3 wrote: post #30
idontwantthis wrote: post #9

Earlier quoted context omitted.

Yeah this article is really pointless because it doesn't mention this. I'm an American citizen living abroad (still digital, no longer nomadic). I only pay SS and Medicare tax to the US. Do not give up your US Citizenship for tax avoidance unless you are earning > $200k per year or making a lot of unearned income outside of the US. Or you are in some weird situation where you permanently want to be in the US more tha…

How do you pay SS and Medicare? I know someone in your situation who was trying to and was told you can only do that if you have US income source (which they don’t have)

I'm going to assume they didn't know what they were talking about as my employer is US based. And by legal definition, the income I'm getting from them is foreign sourced income at least 330-365 days of the year. I'm taking the FEIE deduction yearly.

Source doesn't mean what it does to the layman for intl taxes.

Re: I'm a digital nomad. Should I renounce my US citizenship?

#48

Post by Ancapistani »

0xy wrote: post #12
gregjor wrote: post #6

US citizens who live abroad for at least 330 days a year, or establish permanent residence abroad, may qualify for the Foreign Earned Income Exclusion (FEIE). that FEIE excludes the first $112,000 of income from federal income tax, double that for a married couple. Social Security/Medicare (aka self-employment tax) are not excluded. Most states will want state income tax, so establish residence in a state with no inc…

>Most states will want state income tax, so establish residence in a state with no income tax before going nomading. Is this true? I thought that was only the case if they could prove you are an active resident. Of course, if you maintain a mailing address or residence in California/NY then you better believe they'll make sure you pay. If you cut ties completely, they don't have grounds to come after you.

I moved from Virginia to Arkansas a few years ago, with my move-in date as January 1 to simplify taxes. After filing my previous year’s taxes (both VA and federal), the state of Arkansas sent me a letter demanding that I pay an estimated AR tax for the previous year because I had filed my federal taxes from an Arkansas address, but had not filed AR taxes.

I ended up having to go to court over it, twice so far. The first time was a “tax court”, and they deferred the judgement until I could obtain acceptable proof that I had held a driver’s license in another state for that year. The license itself wasn’t enough. The second time was after the judgement was issued anyways, and I had to file for it to be vacated.

Re: I'm a digital nomad. Should I renounce my US citizenship?

#49

Post by brobinson »

idontwantthis wrote: post #9
gregjor wrote: post #6

US citizens who live abroad for at least 330 days a year, or establish permanent residence abroad, may qualify for the Foreign Earned Income Exclusion (FEIE). that FEIE excludes the first $112,000 of income from federal income tax, double that for a married couple. Social Security/Medicare (aka self-employment tax) are not excluded. Most states will want state income tax, so establish residence in a state with no inc…

Yeah this article is really pointless because it doesn't mention this. I'm an American citizen living abroad (still digital, no longer nomadic). I only pay SS and Medicare tax to the US. Do not give up your US Citizenship for tax avoidance unless you are earning > $200k per year or making a lot of unearned income outside of the US. Or you are in some weird situation where you permanently want to be in the US more tha…

There's also FATCA, FBAR, and a bunch of other nonsense you still have to deal with. Lots of foreign banks won't do business with Americans. You're also paying for an unnecessary tax return preparation each year. Renouncing in light of all this stuff makes sense for a lot of people.

Re: I'm a digital nomad. Should I renounce my US citizenship?

#50

Post by toastal »

rramadass wrote: post #8

Don't! That passport has tremendous value. It will be a huge Opportunity Loss. Plus the way the world is shaping up, you will be better off with the country's Economic/Financial/Military Systems behind you.

Counterpoint: having a US passport has made securing banking very difficult as a lot of places don't want to deal with the IRS. It's been impossible for me to get an account on a local currency crypto exchange well because they don't want to deal with the FTC rules. The last one I looked at, their FAQs included a special place to upload your US citizenship renunciation forms. A US passport puts you an a lot lists with Syria, Yemen, Iran, etc. (and one could easily argue the US as a terrorist country).
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