from Hacker News

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

by SoftwarePatent on 3/3/22, 5:32 AM with 91 comments

  • by gregjor on 3/3/22, 7:00 AM

    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 income tax before going nomading.

    https://www.irs.gov/individuals/international-taxpayers/fore...

    This is a huge tax break. You can exclude income earned from US sources too.

    If you live in a foreign country and pay taxes there you may be able to deduct those from US taxes, depends on reciprocal tax agreements.

    I used ustax.bz to help me figure this out, was worth it to me.

  • by jamisteven on 3/3/22, 7:57 AM

    I am still in disbelief that there is no other solution around this, its absolutely insane. I live/work in Switzerland, wife is Swiss, child born here etc. In Switzerland you have higher than average salaries and that 112k is easily surpassed. So they US is basically telling me to stay poor, or abandon my citizenship.
  • by bryanrasmussen on 3/3/22, 6:04 AM

    The one example of someone who maybe should renounce their American citizenship, Boris Johnson, and who in fact did renounce it https://www.theguardian.com/politics/2017/feb/08/boris-johns... was not a digital nomad.

    So hey if you have a citizenship somewhere else that is among one of the cool, slightly respecting rights of citizens countries in the world, and you never want to go to the U.S because reasons (including never wanting to work there - which seems weird given your digital nomad lifestyle) go ahead, renounce it.

  • by peppermint_tea on 3/3/22, 7:58 AM

    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 vs the U.S for this to be informative imo.

  • by Simon_O_Rourke on 3/3/22, 7:55 AM

    One or two of my American colleagues in Berlin got in over their head with the IRS while out there. As the article says, there may be occasions brought on by adverse tax assessments that effectively mean you can't travel home again if you give up your passport.

    This sadly was the case for my friend Amy, who couldn't travel back to Vermont for her grandmother's funeral. All because of "trivial" things like money and tax!

  • by __d on 3/3/22, 7:22 AM

    What other passports do you have available? The US tax obligations are onerous, but being a US citizen means good no-visa access to lots of places, and somewhere to return to if you want to.

    Establishing a "reason to leave" when visiting the US might mean you need to buy a house elsewhere if you do renounce.

  • by toastal on 3/3/22, 8:34 AM

    > 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.

  • by mike_d on 3/3/22, 7:49 AM

    The easy answer: It doesn't matter.

    Regardless of what you decide there is a 30,000 person waiting list for applications to be processed. They conveniently stopped during the pandemic and even now are processing maybe a dozen a month (all the names are published in the federal register so you can track it yourself).

    Most embassies and consulates aren't even taking appointments to process the form: https://uk.usembassy.gov/u-s-citizen-services/citizenship/lo...

  • by ggm on 3/3/22, 7:57 AM

    Not without acquiring a citizenship of real worth. Uruguay isn't a bad choice. or Ireland.

    If you aren't paying taxes (aside from sales taxes) you are at some remove leeching. Maybe there's a debate here, maybe you have registered as a resident alien in the places you nome to, but most nomads as I understand it seek to be visitor-status for as long as possible.

    I know the digital nomad economy includes people who want to sublet their place to you and then get very upset when you show them you've registered as a resident: It plays both ways.

    So by all means cease to be american, but please: pay your taxes wherever you are.

  • by PaywallBuster on 3/3/22, 8:04 AM

    search "flag theory"

    Probably bad idea to drop your passport if you don't have decent alternatives in place

  • by baskethead on 3/3/22, 7:54 AM

    If you're born in the US and renounce your citizenship, can you reacquire it later on?
  • by rramadass on 3/3/22, 7:22 AM

    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.

  • by Pinegulf on 3/3/22, 7:54 AM

    Digital nomad? I had to check that from wiki. You still need to physically reside somewhere. Maybe securing that first and then worrying about tax burden?
  • by linuxfan2718 on 3/3/22, 5:42 AM

    Lol this is crazy, of course not