Better to have and not need than to need and not have. It’s a once a year pain in the ass. You can always give it up but it can be difficult to get. It may be made more difficult to get back because you gave it up in the past. You can never know the future. You may need it for some unforeseen circumstances.
This makes the most sense, IMO. I’m also a dual U.S. and European citizen, and the idea of giving one up is crazy to me. Yeah, there are some minor hassles, but those are not easy citizenships to acquire. Being born into both is an incredible stroke of luck, and the flexibility it offers is fantastic. There literally isn’t a better passport than those two, and having both let’s you go just about anywhere in the Western world.
Can you please elaborate on why your father is paying taxes now in retirement? I could only imagine that scenario if he is withdrawing US-based investments, which then he rightfully needs to pay the taxes, or your country somehow does not have a double taxation treaty with the US - but maybe I'm entirely wrong.
To the first bullet in your list, I find that pretty disengenious on your part. Holding a US passport does entitle you to many services, including rescue abroad, regardless of if you decide to use them or not. Just because your home country also offers these services does not mean that the US does not offer you anthing. I don't want to pass judgement on your comments but they do come off as a little ungrateful. Even locked away, that passport affords you options and opportunities that billions of other people would love to have - you even recognize that you'd like to pass those options on to your children one day.
I left the US a decade ago which made me accutely aware of what it means to hold citizenship to a place where you don't live. I love my host nation and have no real plans to move back to the US but the least I can do is respect the citizenship that I hold even if my connections to my homeland become more tenuous by the day and I there's a lot that I don't agree with over there.
Edit: One thing I meant to point out, we never know what the future holds. People have asked me if I'd ever give up my US passport and I said no. Aside from my own version of patriotism and loyalty it's an insurance policy if I ever have to go back. How much do you value the insurance of knowing that you can go to the US if things ever go down hill where you live now?
One thing I meant to point out, we never know what the future holds. People have asked me if I'd ever give up my US passport and I said no. Aside from my own version of patriotism and loyalty it's an insurance policy if I ever have to go back. How much do you value the insurance of knowing that you can go to the US if things ever go down hill where you live now?
I shudder to think what would have become of all the Indians in Uganda when Idi Amin expelled them if the Republic of India and other Commonwealth nations weren't willing to take them in.
As an American that has lived abroad, yeah, the taxes are a pain and frustrating. The passport is useful, though admittedly, a European passport is equally, if not more so. Since your income is below the taxation threshold for now, I'd punt the decision. Filing the paperwork is a pain, but not really onerous. If dealing with the taxes does become onerous, it is at that point that I would make the decision.
I do agree you aren't really using any services from the US, though you also aren't paying for them either, so that evens out. If you ever find yourself in a bad situation while abroad, you have two embassies that can help you, rather than one, which is nice. Like you noted, if you have kids, they would get citizenship too which could be very useful for them if they choose to study or work in the US.
In summary, I think as it currently stands, the pros of citizenship currently out weight the cons of filing some paperwork for taxes, but that balance might change in the future.
May as well keep it as long as the tax burden is low. There are options that allow you to vote in federal elections if you so choose and the passport can be useful if you're ever visiting the US or one of its territories. The passport might also someday be useful if things change and a country you're visiting ends up souring on Europe but sticks with the US or something like that.
I would not give it up unless the financial burden began to impact other financial goals of yours. A citizenship is a very valuable thing, and despite associated burdens and headaches, USA is a very valuable citizenship. While you may not need it now, it is hard to predict whether living or working in the US will be beneficial to you down the road. Having dual citizenship can even make you attractive to employers, should the opportunity arise that a company you're working at is seeking to grow in the US. It seems much too valuable to me to give up because filing taxes are a burden. One metric might be whether having it is costing you more than it would cost to hypothetically go through the immigration process to obtain one (just a thought experiment to put a value on it).
One thing I don't quite follow is this:
However, there is an aspect I'd like to avoid: my father has reached retirement age and is now being heavily taxed by the US. He also has never lived or worked in the US.
Why is he being taxed? Is he a US citizen, or is it somehow because you are? How exactly would giving up your citizenship affect this?
Indeed. Despite its many problems and flaws, the US is still the undisputed hyperpower of the world in not just military power but finance, science, technology, agriculture, sport, arts and culture, and every imaginable facet of human economic life. An American citizenship is very valuable indeed.
I considered naturalizing in the Netherlands when I was coming up on my 5 year mark there but decided against it because doing so would require forfeiting my American citizenship. Despite how wonderfully livable the Netherlands and the rest of Europe are, the fact is that the European economy is languishing while the American economy is surging ahead in every sector.
Maybe someday I'd like to create my own company — but that would certainly bring me back into the US orbit.
I'd recommend just paying someone to do your US taxes for you.
I also want to note that history is fickle. Our relatively peaceful modern era gives the impression that history is over and all that's left to do is work, enjoy life, and save for retirement, but it's not over: this is only really the beginning of the rest of human history.
Things are going to change a lot within the next 50 years. Having dual citizenship means hedging your future with the two most successful human projects.
Within the next 50 years, the American project may collapse; but the European project is also fragile, perhaps even more so because of economic and demographic pressures that are now driving far-right movements across European nations.
The EU's monetary system has some major fundamental flaws, like the limited ability of European nations to set their own monetary policy. This mean seem abstract, but European nations have proven to be much less resilient to recessions.
US is virtually self-sufficient for its energy needs, which undergird all economic activity. The EU is very dependent on energy imports. The Russian invasion of Ukraine threatened the EU's natural gas supply. The recent coup in Niger threatens—if I recall correctly—a third of France's uranium supply, which is dangerous for France which chose to rely heavily on nuclear power. This fragility means that the European economy can be easily disrupted and upended by global events that affect its energy supplies.
I am very much impressed by your view of America and Europe as two projects. I believe it is a very valid point of view that hadn't ever occurred to me.
The European Union and the US are in many ways constructs that have merely existed for a brief time. If history has taught us anything, it is that empires rise and fall. While I wouldn't call the US or the European Union empires in the traditional sense, they do represent something similar for which there is no guarantee for success.
You are perfectly right in saying that the American and European projects may collapse in the next 50 years. If both or either of the two collapse, it would be wise to have citizenship in both.
That being said, I've recently seen a future projection of uninhabitable areas of Planet Earth. It was terrifying to say the least. The entire African equator region up to southern Europe, practically all of Southeast Asia, northern Australia and all of Central America were deemed uninhabitable due to rising temperatures. Those people will migrate North and South. There's no telling what will happen thereafter, but I am certain it won't be pretty.
I'd also like my future children (family planning is underway) to get their US citizenship first before potentially handing back my US passport.
You probably know this, but just in case you don’t: to pass US citizenship on, you (or your partner) must be a US citizen who has lived in the United States. The amount of time you have to have lived there depends on your circumstances, but if you never lived there and neither did your partner, your kids will not be US citizens at birth (unless they’re born in the US).
Maybe it’s better to remain ignorant on this point but…
The real pain with being a US citizen living outside the US is not that you have to file taxes. It’s the rules about PFICs. It makes it nearly impossible to responsibly plan for retirement.
Although I am not invested in PFICs, this is a very valuable comment.
Digging a bit deeper, I further learned that owning more than 49% of a company abroad also means I'd have to report that company's financials every year. That's a massive downside to having US citizenship, and this may actually be a situation I will be in sometime in the near future.
Definitely a legit reason to give up US citizenship.
If you travel to the us, you may face increased scrutiny on account of having given up the citizenship. That's one of the reasons I haven't given up mine, suck though it does.
I've read reports about this as well. It's one of the reasons that has deterred me from giving up mine as well.
Although I haven't traveled to the US in over a decade, I wouldn't want to be denied entry for something like this (despite having a valid visa of course)
The only downside I see with having a dual citizenship is if you earn more than 150K a year, cause the US will tax you even if you don’t live here. Otherwise the benefits of dual citizenship outweighs the downsides.
Knowing Europe I really doubt you earn enough to pay US taxes as a citizen living abroad. I wish I had a privilege of having both US and EU citizenship. It's like a lottery win to have both.
I think you're asking the wrong question. The question isn't should you give up your US passport, the question is why should you keep it? Is it doing anything useful for you? It doesn't sound like it.
People have suggested it might be good insurance if things go badly but if things have gone so badly in the EU that moving to the US is an improvement then you'll probably qualify as a refugee and can move to Canada or Australia or something anyway. If you do suddenly want to move to the US for work it's not that hard to get a visa when coming from the EU. I have several friends who have done that and it was a bit of paperwork but far from impossible.
If you do suddenly want to move to the US for work it's not that hard to get a visa when coming from the EU. I have several friends who have done that and it was a bit of paperwork but far from impossible.
I think this is kind of under-selling things. My wife is currently trying to get a spousal green card (she is currently a EU citizen), and despite this being one of the few basically "guaranteed" ways to get US residency on a timeline, it has been far from smooth and has upended a lot of our plans for the present and near future. Getting employment-based visas is typically harder, and it is heavily reliant on your employer wanting to sponsor it, which will basically only happen if they cannot find someone already with US work authorization to fill the role. Once you get it, many work visas are conditional on you staying with the company that is on the visa application, and if you want to switch jobs you might have to go through the process again. It can significantly reduce your freedom as a worker and makes it easier for companies to exploit you. This is speaking from experience of having to navigate this with my wife recently, so maybe things have changed since your friends went through the process. In any case, I would definitely not describe it as "a bit of paperwork".
I think as long as the tax burden is minimal, which it currently sounds like, it doesn't make sense to give up something which is on paper very valuable.
Hi @douchebag While i do not have direct experience with this topic, i recently listened to an April 2023 episode of Tim Ferriss podcast where he interviews Derek Sivers (of CD Baby fame and other stuff). Derek - being quite wealthy - went through and gave up his U.S. citizenship....and not for tax reasons as one might expect. He now greatly regrets doing so, and he advises anyone against giving it up. I'm linking to the transcript of the podcast, so you can do a quick ctrl-F to find the "citizenship" topic: https://tim.blog/2023/04/23/derek-sivers-transcript/
That was an interesting read. Very interesting reason to renounce his citizenship as well.
For anyone who hasn't read the transcript, he basically said that he'd spent the past 40 years of his life in the US, and wanted to spend the next 40 outside the US. To not fall back on "comfy California" when things would get tough, he decided to "burn that ship". Can't go back to the US permenantly if you're not a citizen anymore.
Note that the children will not be eligble for US citizenship unless you have lived in the US (which is not the case here). And with a European passport it’s basically always possible to ”fly in” to the US. It makes the whole situation a bit more challenging.
Give it up! American here hoping to emigrate and give up their citizenship as soon as I possibly can. Also saddling your children with US citizenship sounds like a terrible burden. You’re signing them up to file / pay taxes to the US government for a hypothetical benefit.
People love to keep things around because they think they might need it someday, but is it really worth all the extra mental space it occupies and time it costs to maintain?
As an American who did emigrate, I think you're way overthinking the time and cost of maintaining that citizenship. Passports only get renewed every ten years and can be done at an Embassy, taxes are not very complicated to fill out for most people and there is professional help overseas available, US will not collect taxes on up to $120,000 which is way more than most people overseas earn, double taxation treaties further protect earnings from the US.
Giving up a citizenship is a big deal, we're not talking about keeping that nice cardboard box around because you might use it some day. These are work and life opportunities and a huge insurance policy if anyone needs to live in the US for any reason. I could see myself adding a citizenship but things would have to be a lot more extreme in the US for me to even begin to consider ever giving it up
One day you might really regret giving up your citizenship. You will always be 2nd category citizen in any other country no matter what you think on that.
Also saddling your children with US citizenship sounds like a terrible burden
i find this to be a very strange take. They could always renounce the citizenship? But having an additional citizenship that would allow them opportunities to easily travel, live, or work in that country is a tremendous gift. All my thoughts on the US set aside. This would be the case for any country.
Maintaining the citizenship is a bit of paperwork. Acquiring the citizenship again could be a years long process, not even guaranteed, that is incredibly expensive.
Why do you want to give up your citizenship? Which country do you plan to move to? I would caution you against doing this for political reasons or disdain against the US, and to set emotions aside and think from a purely pragmatic standpoint. If you do this, please ensure you do not do so until you have secured citizenship in another country; you could become stateless otherwise.
I thank you for this hot take! It's refreshing to hear someone state a minority opinion.
May I ask, what specifically is it in your case that makes you want to give up your US citizenship? It sounds like it's something beyond the mental space and time burden?
Taxes are like maybe 10 hours every year, it sucks and could be massively streamlined, but it's not really asking that much, and really could just pay someone to do them for you, it's not massively expensive. I used to use Turbotax but their prices jumped to 200% so I moved on to something called FreeTaxUSA which is not as convenient as TT but is completely free for federal and state and covers everything that TT does.
The benefits are far from hypothetical too, you're just blind to them as a US citizen already, being able to enter the US at any time without any limits on how long you can stay or what rights you have is definitely big.
With the shit being stirred in Europe right now, giving up a free pass to move to a country with at least one-of, if not the largest standing armies in the world seems downright foolish.
There's a reason people spends years in a waiting list for citizenship or even enter the US illegally.
If I had citizenship to any other country, you better bet I'd be maintaining it if reasonably possible, even if it was just to be able to easily visit a few times.
I don't know anything about dual citizenshi, but if the concern is paying out a lot at retirement (although I'd like to know why that is, as others here seem to think that shouldn't be the case), why not hold onto the citizenship until you reach retirement age? And then when you approach retirement age decide if you still want to keep it or ditch it and then retire. Even if that tactic of ditching it once it becomes financially inconvenient isn't possible (idk if there are regulations in place to prevent that or what), if something costs you nothing but a few hours and some paper work once a year, but has potential to be valuable down the road, why wouldn't you keep it?
You don't make enough to suffer the foreign citizen tax burden, but I'd bet your other passport is much better than the American one. However if you just stay on top of stuff you should be fine, which you seem to do.
The best benefit would be to stay on top of current and future potential tax obligations and if/when you have kids tell them what they have, and the responsibilities that come with dual citizenship so they can manage it for themselves. I'd suggest you could maybe drop the US citizenship before any changes that could increase your American tax burden. I don't see much benefit to just having a US passport, but more options with minimal or manageable drawbacks is never a bad thing.
Another option you might not have considered is just to ignore everything related to responsibilities of being a US citizen until you need to go there. This is not a decent thing to do but it is less extreme than renouncing citizenship.
There is no statute of limitations on unfiled tax returns, but in most cases, the IRS only looks back six years. You should look into the specifics for your situation. I imagine that fixing your relationship with the IRS after ignoring them for 10+ years would be difficult, but it might be easier than trying to get citizenship after renouncing it. It might even be a cheaper too. The IRS might seize your passport. You might be assessed with criminal tax evasion penalties and you might lose your right to claim refunds for prior years. But those things could also happen even if you did your very best to file tax returns and follow the laws.
But those things could also happen even if you did your very best to file tax returns and follow the laws.
Every single American expat I know does taxes in a slightly different way, if they do them at all. I'm convinced we're all doing them wrong. It's such a farce.
You really do a political benefit from being an "American citizen", but it's very ephemeral. If you got kidnapped the headlines would read "American kidnapped" instead of no headlines at all in the US. Also the US State Department does have some real obligations towards your protection. But as you said, most countries offer this to their citizens. There are plenty of rescue teams just as skilled as any Americans rescue team too.
Even then, that's all extremely hypothetical. Do you expect to get kidnapped by a foreign government and accused of espionage?
I would say the best reason to keep your citizenship is if you ever plan to live in the US or want to travel there freely. If you give up your citizenship it is unlikely you would ever get it back and you would also be relying on getting a visa to visit. You also get into Puerto Rico with your US citizenship which i'd argue is a WAY better vacation!
Being below the tax threshold seems like it's not worth revoking your citizenship. If you were paying out the ass for taxes, then I would probably revoke. It seems like you never have even traveled to the US or even want to. And you do get to vote for the president, for whatever that is worth to you.
If it were me and the only downside was paperwork, I'd keep it. But I'd also make it a point to visit Puerto Rico or Hawaii or get at least some of juice from it. Maybe visit North Dakota in January to experience what hell is. Or Phoenix in August to experience what hell is.
I know one person who did this. Basically the only reasons they went through with it were:
Got permanent residency in the country they planned on staying in
Had an equally good passport from dual citizenship
Ended up earning enough that they did hit the limit and would have had to pay US taxes on top of local taxes.
I think if you don't at least meet those 2-3 conditions (depending on if you plan on living somewhere where your second passport doesn't give you visa free living), it's not worth giving up.
Also kids are an issue. As you stated you might want to hold off until you have gotten their citizenships sorted. Also consider the US is mildly douchey about visiting as a tourist if you have given up citizenship, which could very slightly possibly make things like attending university graduations harder to organize if your kids go to uni in the US.
Edit: Also, I feel like border agents might be kinda judgmental if you stroll in with an American accent, and some flag pops up on the computer saying "ex-citizen" 😅.
Better to have and not need than to need and not have. It’s a once a year pain in the ass. You can always give it up but it can be difficult to get. It may be made more difficult to get back because you gave it up in the past. You can never know the future. You may need it for some unforeseen circumstances.
It's downright impossible even, as far as I know.
You're probably right. For the time being it's better to take the yearly pain...
This makes the most sense, IMO. I’m also a dual U.S. and European citizen, and the idea of giving one up is crazy to me. Yeah, there are some minor hassles, but those are not easy citizenships to acquire. Being born into both is an incredible stroke of luck, and the flexibility it offers is fantastic. There literally isn’t a better passport than those two, and having both let’s you go just about anywhere in the Western world.
Can you please elaborate on why your father is paying taxes now in retirement? I could only imagine that scenario if he is withdrawing US-based investments, which then he rightfully needs to pay the taxes, or your country somehow does not have a double taxation treaty with the US - but maybe I'm entirely wrong.
To the first bullet in your list, I find that pretty disengenious on your part. Holding a US passport does entitle you to many services, including rescue abroad, regardless of if you decide to use them or not. Just because your home country also offers these services does not mean that the US does not offer you anthing. I don't want to pass judgement on your comments but they do come off as a little ungrateful. Even locked away, that passport affords you options and opportunities that billions of other people would love to have - you even recognize that you'd like to pass those options on to your children one day.
I left the US a decade ago which made me accutely aware of what it means to hold citizenship to a place where you don't live. I love my host nation and have no real plans to move back to the US but the least I can do is respect the citizenship that I hold even if my connections to my homeland become more tenuous by the day and I there's a lot that I don't agree with over there.
Edit: One thing I meant to point out, we never know what the future holds. People have asked me if I'd ever give up my US passport and I said no. Aside from my own version of patriotism and loyalty it's an insurance policy if I ever have to go back. How much do you value the insurance of knowing that you can go to the US if things ever go down hill where you live now?
I shudder to think what would have become of all the Indians in Uganda when Idi Amin expelled them if the Republic of India and other Commonwealth nations weren't willing to take them in.
As an American that has lived abroad, yeah, the taxes are a pain and frustrating. The passport is useful, though admittedly, a European passport is equally, if not more so. Since your income is below the taxation threshold for now, I'd punt the decision. Filing the paperwork is a pain, but not really onerous. If dealing with the taxes does become onerous, it is at that point that I would make the decision.
I do agree you aren't really using any services from the US, though you also aren't paying for them either, so that evens out. If you ever find yourself in a bad situation while abroad, you have two embassies that can help you, rather than one, which is nice. Like you noted, if you have kids, they would get citizenship too which could be very useful for them if they choose to study or work in the US.
In summary, I think as it currently stands, the pros of citizenship currently out weight the cons of filing some paperwork for taxes, but that balance might change in the future.
May as well keep it as long as the tax burden is low. There are options that allow you to vote in federal elections if you so choose and the passport can be useful if you're ever visiting the US or one of its territories. The passport might also someday be useful if things change and a country you're visiting ends up souring on Europe but sticks with the US or something like that.
I would not give it up unless the financial burden began to impact other financial goals of yours. A citizenship is a very valuable thing, and despite associated burdens and headaches, USA is a very valuable citizenship. While you may not need it now, it is hard to predict whether living or working in the US will be beneficial to you down the road. Having dual citizenship can even make you attractive to employers, should the opportunity arise that a company you're working at is seeking to grow in the US. It seems much too valuable to me to give up because filing taxes are a burden. One metric might be whether having it is costing you more than it would cost to hypothetically go through the immigration process to obtain one (just a thought experiment to put a value on it).
One thing I don't quite follow is this:
Why is he being taxed? Is he a US citizen, or is it somehow because you are? How exactly would giving up your citizenship affect this?
Indeed. Despite its many problems and flaws, the US is still the undisputed hyperpower of the world in not just military power but finance, science, technology, agriculture, sport, arts and culture, and every imaginable facet of human economic life. An American citizenship is very valuable indeed.
I considered naturalizing in the Netherlands when I was coming up on my 5 year mark there but decided against it because doing so would require forfeiting my American citizenship. Despite how wonderfully livable the Netherlands and the rest of Europe are, the fact is that the European economy is languishing while the American economy is surging ahead in every sector.
Maybe someday I'd like to create my own company — but that would certainly bring me back into the US orbit.
I'd recommend just paying someone to do your US taxes for you.
I also want to note that history is fickle. Our relatively peaceful modern era gives the impression that history is over and all that's left to do is work, enjoy life, and save for retirement, but it's not over: this is only really the beginning of the rest of human history.
Things are going to change a lot within the next 50 years. Having dual citizenship means hedging your future with the two most successful human projects.
Within the next 50 years, the American project may collapse; but the European project is also fragile, perhaps even more so because of economic and demographic pressures that are now driving far-right movements across European nations.
I am very much impressed by your view of America and Europe as two projects. I believe it is a very valid point of view that hadn't ever occurred to me.
The European Union and the US are in many ways constructs that have merely existed for a brief time. If history has taught us anything, it is that empires rise and fall. While I wouldn't call the US or the European Union empires in the traditional sense, they do represent something similar for which there is no guarantee for success.
You are perfectly right in saying that the American and European projects may collapse in the next 50 years. If both or either of the two collapse, it would be wise to have citizenship in both.
That being said, I've recently seen a future projection of uninhabitable areas of Planet Earth. It was terrifying to say the least. The entire African equator region up to southern Europe, practically all of Southeast Asia, northern Australia and all of Central America were deemed uninhabitable due to rising temperatures. Those people will migrate North and South. There's no telling what will happen thereafter, but I am certain it won't be pretty.
You probably know this, but just in case you don’t: to pass US citizenship on, you (or your partner) must be a US citizen who has lived in the United States. The amount of time you have to have lived there depends on your circumstances, but if you never lived there and neither did your partner, your kids will not be US citizens at birth (unless they’re born in the US).
Interesting. I didn't know this. Yes, this appears to be the case:
See section "Child born abroad in wedlock to Two U.S. Citizen parents"
Interesting! I did not know this. Thank you for sharing!
Maybe it’s better to remain ignorant on this point but…
The real pain with being a US citizen living outside the US is not that you have to file taxes. It’s the rules about PFICs. It makes it nearly impossible to responsibly plan for retirement.
Although I am not invested in PFICs, this is a very valuable comment.
Digging a bit deeper, I further learned that owning more than 49% of a company abroad also means I'd have to report that company's financials every year. That's a massive downside to having US citizenship, and this may actually be a situation I will be in sometime in the near future.
Definitely a legit reason to give up US citizenship.
Is it just because those investments are heavily taxed?
If you travel to the us, you may face increased scrutiny on account of having given up the citizenship. That's one of the reasons I haven't given up mine, suck though it does.
I've read reports about this as well. It's one of the reasons that has deterred me from giving up mine as well.
Although I haven't traveled to the US in over a decade, I wouldn't want to be denied entry for something like this (despite having a valid visa of course)
The only downside I see with having a dual citizenship is if you earn more than 150K a year, cause the US will tax you even if you don’t live here. Otherwise the benefits of dual citizenship outweighs the downsides.
Based on what you have written, I would keep the passport until you have all of the children you plan to, and make the decision after that time.
Knowing Europe I really doubt you earn enough to pay US taxes as a citizen living abroad. I wish I had a privilege of having both US and EU citizenship. It's like a lottery win to have both.
I think you're asking the wrong question. The question isn't should you give up your US passport, the question is why should you keep it? Is it doing anything useful for you? It doesn't sound like it.
People have suggested it might be good insurance if things go badly but if things have gone so badly in the EU that moving to the US is an improvement then you'll probably qualify as a refugee and can move to Canada or Australia or something anyway. If you do suddenly want to move to the US for work it's not that hard to get a visa when coming from the EU. I have several friends who have done that and it was a bit of paperwork but far from impossible.
I think this is kind of under-selling things. My wife is currently trying to get a spousal green card (she is currently a EU citizen), and despite this being one of the few basically "guaranteed" ways to get US residency on a timeline, it has been far from smooth and has upended a lot of our plans for the present and near future. Getting employment-based visas is typically harder, and it is heavily reliant on your employer wanting to sponsor it, which will basically only happen if they cannot find someone already with US work authorization to fill the role. Once you get it, many work visas are conditional on you staying with the company that is on the visa application, and if you want to switch jobs you might have to go through the process again. It can significantly reduce your freedom as a worker and makes it easier for companies to exploit you. This is speaking from experience of having to navigate this with my wife recently, so maybe things have changed since your friends went through the process. In any case, I would definitely not describe it as "a bit of paperwork".
I think as long as the tax burden is minimal, which it currently sounds like, it doesn't make sense to give up something which is on paper very valuable.
Hi @douchebag While i do not have direct experience with this topic, i recently listened to an April 2023 episode of Tim Ferriss podcast where he interviews Derek Sivers (of CD Baby fame and other stuff). Derek - being quite wealthy - went through and gave up his U.S. citizenship....and not for tax reasons as one might expect. He now greatly regrets doing so, and he advises anyone against giving it up. I'm linking to the transcript of the podcast, so you can do a quick ctrl-F to find the "citizenship" topic: https://tim.blog/2023/04/23/derek-sivers-transcript/
That was an interesting read. Very interesting reason to renounce his citizenship as well.
For anyone who hasn't read the transcript, he basically said that he'd spent the past 40 years of his life in the US, and wanted to spend the next 40 outside the US. To not fall back on "comfy California" when things would get tough, he decided to "burn that ship". Can't go back to the US permenantly if you're not a citizen anymore.
I found that interview interesting, too. Nice quote from there:
This is applicable to so many areas in life!
I have dual citizenship, and am entitled to a third, so I have thought about this somewhat.
As you want to gift your children the option of a US Citizenship, I think you will always want to retain your US Citizenship.
Because you do not want to be in a position where your children are in the US, they need your help, you want to fly in, but you don't have a passport.
Is that why your father retains his citizenship, in spite of the fact that he has never been to the US?
Note that the children will not be eligble for US citizenship unless you have lived in the US (which is not the case here). And with a European passport it’s basically always possible to ”fly in” to the US. It makes the whole situation a bit more challenging.
Give it up! American here hoping to emigrate and give up their citizenship as soon as I possibly can. Also saddling your children with US citizenship sounds like a terrible burden. You’re signing them up to file / pay taxes to the US government for a hypothetical benefit.
People love to keep things around because they think they might need it someday, but is it really worth all the extra mental space it occupies and time it costs to maintain?
As an American who did emigrate, I think you're way overthinking the time and cost of maintaining that citizenship. Passports only get renewed every ten years and can be done at an Embassy, taxes are not very complicated to fill out for most people and there is professional help overseas available, US will not collect taxes on up to $120,000 which is way more than most people overseas earn, double taxation treaties further protect earnings from the US.
Giving up a citizenship is a big deal, we're not talking about keeping that nice cardboard box around because you might use it some day. These are work and life opportunities and a huge insurance policy if anyone needs to live in the US for any reason. I could see myself adding a citizenship but things would have to be a lot more extreme in the US for me to even begin to consider ever giving it up
One day you might really regret giving up your citizenship. You will always be 2nd category citizen in any other country no matter what you think on that.
i find this to be a very strange take. They could always renounce the citizenship? But having an additional citizenship that would allow them opportunities to easily travel, live, or work in that country is a tremendous gift. All my thoughts on the US set aside. This would be the case for any country.
Maintaining the citizenship is a bit of paperwork. Acquiring the citizenship again could be a years long process, not even guaranteed, that is incredibly expensive.
Why do you want to give up your citizenship? Which country do you plan to move to? I would caution you against doing this for political reasons or disdain against the US, and to set emotions aside and think from a purely pragmatic standpoint. If you do this, please ensure you do not do so until you have secured citizenship in another country; you could become stateless otherwise.
I thank you for this hot take! It's refreshing to hear someone state a minority opinion.
May I ask, what specifically is it in your case that makes you want to give up your US citizenship? It sounds like it's something beyond the mental space and time burden?
Taxes are like maybe 10 hours every year, it sucks and could be massively streamlined, but it's not really asking that much, and really could just pay someone to do them for you, it's not massively expensive. I used to use Turbotax but their prices jumped to 200% so I moved on to something called FreeTaxUSA which is not as convenient as TT but is completely free for federal and state and covers everything that TT does.
The benefits are far from hypothetical too, you're just blind to them as a US citizen already, being able to enter the US at any time without any limits on how long you can stay or what rights you have is definitely big.
With the shit being stirred in Europe right now, giving up a free pass to move to a country with at least one-of, if not the largest standing armies in the world seems downright foolish.
There's a reason people spends years in a waiting list for citizenship or even enter the US illegally.
If I had citizenship to any other country, you better bet I'd be maintaining it if reasonably possible, even if it was just to be able to easily visit a few times.
I don't know anything about dual citizenshi, but if the concern is paying out a lot at retirement (although I'd like to know why that is, as others here seem to think that shouldn't be the case), why not hold onto the citizenship until you reach retirement age? And then when you approach retirement age decide if you still want to keep it or ditch it and then retire. Even if that tactic of ditching it once it becomes financially inconvenient isn't possible (idk if there are regulations in place to prevent that or what), if something costs you nothing but a few hours and some paper work once a year, but has potential to be valuable down the road, why wouldn't you keep it?
You don't make enough to suffer the foreign citizen tax burden, but I'd bet your other passport is much better than the American one. However if you just stay on top of stuff you should be fine, which you seem to do.
The best benefit would be to stay on top of current and future potential tax obligations and if/when you have kids tell them what they have, and the responsibilities that come with dual citizenship so they can manage it for themselves. I'd suggest you could maybe drop the US citizenship before any changes that could increase your American tax burden. I don't see much benefit to just having a US passport, but more options with minimal or manageable drawbacks is never a bad thing.
Another option you might not have considered is just to ignore everything related to responsibilities of being a US citizen until you need to go there. This is not a decent thing to do but it is less extreme than renouncing citizenship.
There is no statute of limitations on unfiled tax returns, but in most cases, the IRS only looks back six years. You should look into the specifics for your situation. I imagine that fixing your relationship with the IRS after ignoring them for 10+ years would be difficult, but it might be easier than trying to get citizenship after renouncing it. It might even be a cheaper too. The IRS might seize your passport. You might be assessed with criminal tax evasion penalties and you might lose your right to claim refunds for prior years. But those things could also happen even if you did your very best to file tax returns and follow the laws.
Every single American expat I know does taxes in a slightly different way, if they do them at all. I'm convinced we're all doing them wrong. It's such a farce.
You really do a political benefit from being an "American citizen", but it's very ephemeral. If you got kidnapped the headlines would read "American kidnapped" instead of no headlines at all in the US. Also the US State Department does have some real obligations towards your protection. But as you said, most countries offer this to their citizens. There are plenty of rescue teams just as skilled as any Americans rescue team too.
Even then, that's all extremely hypothetical. Do you expect to get kidnapped by a foreign government and accused of espionage?
I would say the best reason to keep your citizenship is if you ever plan to live in the US or want to travel there freely. If you give up your citizenship it is unlikely you would ever get it back and you would also be relying on getting a visa to visit. You also get into Puerto Rico with your US citizenship which i'd argue is a WAY better vacation!
Being below the tax threshold seems like it's not worth revoking your citizenship. If you were paying out the ass for taxes, then I would probably revoke. It seems like you never have even traveled to the US or even want to. And you do get to vote for the president, for whatever that is worth to you.
If it were me and the only downside was paperwork, I'd keep it. But I'd also make it a point to visit Puerto Rico or Hawaii or get at least some of juice from it. Maybe visit North Dakota in January to experience what hell is. Or Phoenix in August to experience what hell is.
I know one person who did this. Basically the only reasons they went through with it were:
I think if you don't at least meet those 2-3 conditions (depending on if you plan on living somewhere where your second passport doesn't give you visa free living), it's not worth giving up.
Also kids are an issue. As you stated you might want to hold off until you have gotten their citizenships sorted. Also consider the US is mildly douchey about visiting as a tourist if you have given up citizenship, which could very slightly possibly make things like attending university graduations harder to organize if your kids go to uni in the US.
Edit: Also, I feel like border agents might be kinda judgmental if you stroll in with an American accent, and some flag pops up on the computer saying "ex-citizen" 😅.
You should also look into the estate tax (i.e. inheritance tax).
Edit: here's the wiki link. Not an expert so not vouching for the accuracy.