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This tax scheme also causes a lot of trouble for kids who had the bad fortune of being born in the US, without growing up there or any other real ties to the co
by adamcik 13y ago
This tax scheme also causes a lot of trouble for kids who had the bad fortune of being born in the US, without growing up there or any other real ties to the country. You are still subject to the tax rules, are technically breaking the law every time you entry the US with you real passport (as you must use the US one even if you never got it as you as still technically a citizen).
Getting rid of the citizenship is then best done around the age of eighteen, but chances are no one will tell you how much of a pain in the ass all of this is, and likely you won't even be aware of the tax potential tax burden and paperwork. Alternative is to pretend like nothing and hope you never get caught.
When you finally get around to renouncing the whole thing becomes a never ending process of getting all the IRS papers and possibly back taxes in if you earn enough, getting a SSN as you can't file taxes without it, actually renouncing, and likely getting the SSN after you renounced as the whole thing takes bloody ages, and then finally figuring out exit taxes and if you are actually exempt from paying them. The exit taxes of course have two loop wholes, one of which is you were born a dual citizen _and_ still pay taxes to the other country, which means you are screwed if you are working abroad. While the other test checks net-worth, average income over the last five years and a few other things. Oh, and for the exit tax the states assumes you have sold all you assets and will tax you on the capital gains of those fictive sales...
Whole system is a mess, there is no way in hell expats can fix it as their votes don't in essence don't count and it's "free" money for the state. The level at which taxes kick in for expats of course stopped being adjusted long ago as the state realized that if they stop increasing the min. amount they get more money. Though it is still being moved slightly up, it's long since stopped targeting the truly wealthy and is now hurting more and more regular people (especially if you live in a high cost country with high wages that has crept above the threshold).
Throwing money and/or time out the window is no fun, so I have no problem understanding why people want to get rid of their citizenship if they can without becoming stateless.
- jacques_chester 13y agoHaving access to American universities and jobs on Amercian-citizen terms give those troubled children a helluva worldwide advantage. As an Australian I have no advantage on the education front over any other foreign student. I at least have a leg up in the E-3 visa. Dual citizenship can smooth the edges too, depending on the 2nd citizenship. Lots of countries have reciprocal tax treaties with the US that will excuse American citizens earning in the foreign country from paying American income tax, because they are paying local taxes. And vice versa.
- adamcik 13y agoThe way the US tax treaties work you get tax credits for your local taxes. So if you live in Scandinavia with high taxes, say 40% you have enough credits to offset all of your ~30% US taxes. But if you are in a low tax country, say 20% you would end up still paying ~10% taxes to the US. edit: And yes, if the citizenship is a good or bad thing is of course highly dependent on your other citizenship, your plans to study/work/live in the US, the country you intend to live in instead of the US and a number of other factors.
- jacques_chester 13y agoThanks, I didn't know that.
- deleted 13y ago[deleted]
- noja 13y ago> jobs on Amercian-citizen terms Yeah, I think most Europeans definitely would _not_ want that.
- jacques_chester 13y agoThe point is: it would be easier for me to find work in the centre of the software-development universe than outside it.
- noja 13y agoThat may be true, but that's not what you said.
- jacques_chester 13y agoIt's what I meant. I can't change that you put your own spin on it. As the author of the words I feel a certain ... authority ... on this.