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Americans renouncing Citizenship Over Taxes

Posted by on Apr. 19, 2012 at 11:42 AM
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American Expatriates Renounce Citizenship Over Taxes

The Huffington Post  |  By  Posted: 04/18/2012 6:21 pm Updated: 04/19/2012 9:21 am

American Renounce Citizenship Taxes
Almost 1,800 Americans and Green Card holders renounced their citizenship this year

This year almost 1,800 people renounced their American citizenship and Green Cards, thanks to a costly and timely tax requirement, reports ABC News.

That's because the U.S. is one of the only countries in the world that requires its citizens working abroad to file taxes at home, reports the Daily Mail.

American expatriates are exempt from paying tax on the first $95,100 of income earned abroad as long as they fill in the Foreign Income Exclusion form and prove taxes are paid to the country they reside in. But the process is complicated.

Americans expatriates also have to comply with another regulation that calls for them to disclose information on foreign bank accounts with at least $10,000, explains ABC News. Banks are required to provide information on those very clients and their funds to the U.S. government.

Considering that an estimated 3 to 6 million Americans reside abroad, notes TIME magazine, less than 2,000 people relinquishing citizenship isn't too high of a number. Still, the figure is an indication of a growing trend given that only 502 citizens handed in their passports back in 2009.

But relinquishing one's U.S. citizenship isn't as simple as one might imagine.

Some ex-Americans are still required to file and pay taxes for up to 10 years even after formally deemed a "renunciant" by the U.S. State Department.

The person must also prove they have no intention to return to live in the U.S. and in most cases have another citizenship secured, notes Harper's Magazine.

by on Apr. 19, 2012 at 11:42 AM
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