1 in 3 expats ‘seriously considering’ or planning to renounce U.S. citizenship

Last week we saw millions of Americans rushing to file their taxes before the April 15th deadline. New surveys have found that nearly one-third of U.S. expats have plans to renounce their American citizenship due to the extra filings rules which are subsequently making some expats question their citizenship.

Between 2023 to 2024, the percentage of expats renouncing their citizenship rose from 20% to 30% due to the burden of managing and filing their U.S. taxes.

It has been proven difficult to many Americans living outside of the U.S. due to the strict filing requirements whereby income taxes must be paid on all sources of worldwide earnings. Although there may be some leeway in avoiding double-taxation by applying foreign tax credits as well as claiming a foreign income exclusion, expats may spend more money and time to file taxes in two counties every year.

The Report of Foreign Bank and Financial Accounts (FBAR) may be another factor that encourages expats to renounce their US citizenship. Expats will need to file FBAR forms if their combined account values of their non-US bank accounts exceed $10,000 any time during the tax year – failing to report this can trigger a hefty penalty.

Many have called for the taxing regime to be streamlined and simplified, therefore, easier to navigate and keep up with their tax filings – this would minimise the stress caused to expats and would make tax filing more manageable. This option would be more practical to navigate as opposed to completely renouncing their citizenship as this cannot be easily reversed.

Please contact our team for more information