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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?

#51

Post by eru »

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.

Totally depends on what your other passport is.

If you can replace your American passport with a Canadian, Australian or Singaporean passport, it's not too bad: people from these countries have an easy time getting a visa to work in the US. [0] All while not being subject to American taxes while outside the US.

> Plus the way the world is shaping up, you will be better off with the country's Economic/Financial/Military Systems behind you.

Eh, it's a two-edged sword. On this aspect you are probably better off with the passport of a country that's clearly in the Western sphere, but also one that no-one actually hates. Think Canada or Switzerland.

[0] Though I don't know how well that works for former citizens?

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

#52

Post by toastal »

> Being American entitles you to consular assistance from the US when you’re abroad

Please. Every document costs triple what it should be and then you are responsible for paying shipping and return shipping even if they decide to decline you. You are treated like a foreigner by your own country.

Let's talk about COVID-19: While countries like China and France procured vaccines for its citizens, the US did not. They gave out vaccines to other countries, but refused any assistance to its citizens saying it was the local government's responsibility (meanwhile every ambassador and foreign worker inside the embassy got priority shots). It's not their problem why?

The embassy prioritizes galas and showmanship more than actually helping citizens. If they cared, they'd be fighting to fix the stupid FBAR situation; you should not be treated like a criminal for having $10k in a bank in the country of your domicile, where you have a home and a family to look after.

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

#53

Post by peppermint_tea »

anonymoushn wrote: post #31
peppermint_tea wrote: post #25

The article fails to mention on which passport he travels which is quite relevant. The other passport you own will be linked to another country, financial system... and taxes. not a very good article, without comparing U.S vs another country tax system/medicare pros and cons, it is impossible to make an enlightened decision, therefore making the title of this article irrelevant. we would need one article per country…

Do you think U.S. medicare covers services outside the U.S.?

Unsure, I am not from the U.S, but I tought maybe you can get back to the country for treatment...

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

#54

Post by bryanrasmussen »

krageon wrote: post #45
bryanrasmussen wrote: post #5

Earlier quoted context omitted.

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.

hmm, well there we can see I was wrong, I just went to look at https://en.wikipedia.org/wiki/Democracy_Index I was sure Singapore was registered as a Hybrid regime but I can see it is listed as a flawed democracy, if that's correct and I guess I'll assume it is as I'm not planning to move there anyway then there isn't a reason to hold anything against them, given that very few countries are better than flawed Democracy.

on edit: still criminal system seems overly harsh.

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

#55

Post by idontwantthis »

plugger wrote: post #38
idontwantthis wrote: post #22

Earlier quoted context omitted.

No you're not really if you know what the FEIE is. You don't get taxed on the first $112,000 of earned income this year. It's one extra page you need to file with your taxes. That means no income tax on any earned income up to that amount. "Income tax" on "earned income" does not include Social Security, medicare/caid tax so you still pay some. It also doesn't cover "unearned" income like capital gains or rent. I sai…

I understand what FEIE is. but as you said, it's the first $112k. BUT, you still have to file every year, which incurs a time and financial penalty. W2 forms aren't designed for mere mortals to fumble their way through, so most outsource it to a tax accountant at a financial cost. Also, tax accountants abroad that specialise in US tax law are both rare and expensive. > medicare/caid tax so you still pay some exactly.…

That’s great you’ve found a home in a country with similar security and stability to the US. None of what I’m saying matters to you because you found a new home to pay taxes to.

There’s no good reason for you to keep your US citizenship just like there’s no good reason for the average Australian citizen to gain US citizenship.

This is in the context of digital nomads who probably aren’t seeking citizenship in Australia or a similar country.

Ending US citizenship purely for tax avoidance without considering FEIE (like this article does) aimed at a target audience of young people who probably don’t know much about where they are going or how taxes work (digital nomads) is not smart.

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

#56

Post by Stevvo »

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…

I imagine if someone is considering revoking their citizenship just to avoid tax, they make a lot more than $112,000

I wouldn't call it a tax break; the US is the only country that double taxes its citizens on foreign-earned income.

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

#57

Post by gregjor »

toastal wrote: post #41
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 probabl…

Medical insurance and health care abroad for expats costs a lot less in most places, compared the to US. As a US citizen you can’t get out of paying taxes for Social Security and Medicare, just cost of citizenship the way I look at it. Not something I get too wound up over. Even if I can’t benefit from Medicare I am paying in for my parents and other people who can benefit from it, while I pay $50 for a doctor’s visit in Thailand.

You can collect Social Security while living abroad.

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

#58

Post by gregjor »

mellavora wrote: post #35
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…

Did ustax.bz also tell you that if you are self-employed, you still need to file quarterly with the US, unless you are in a country with a totalitization treaty with the US? unless you earn less than $400/yr. > International Tax Gap Series > If you are a self-employed U.S. citizen or resident, the rules for paying self-employment tax are generally the same whether you are living in the United States or abroad. > The…

Self-employed taxpayers are supposed to file quarterlies regardless of where they live. If you don’t you get a penalty assessed. And yes, ustax.bz told me that, but I already knew.

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

#59

Post by gregjor »

seanmcdirmid wrote: post #10
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…

> double that for a married couple Only if your spouse also qualifies, which isn’t necessarily just because they have an ITIN (oh, and it only applies to their income, and not yours…which often won’t work out if your spouse is earning local wages). SS and Medicare aren’t collected on income earned abroad, but you also have to be careful because your credits towards benefits don’t accrue either. I quickly dropped the…

Digital nomads generally aren’t getting permanent residency or work permits, so they aren’t paying local taxes wherever they happen to stay. Longer-term expats and retirees will have different visas and tax situations.

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

#60

Post by gregjor »

brobinson wrote: post #49
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…

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.

TurboTax has the FEIE worksheet and forms.

If you make enough money that renouncing citizenship looks like a good option the cost of tax preparation and opening a foreign bank account are going to be trivial details someone else will handle for you.

It’s a hassle for Americans to open bank accounts in some countries because of IRS reporting, but if you have a few million dollars to deposit you won’t have any problems.

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