Should I become a US citizen before I move back to Ireland, renew Greencard or let it lapse?
I'm new to this forum and thrilled to have found it. I am married to a US citizen and we live in the US with our 2 US born children. I've had a Greencard for 11 years and its due to expire in 2019. We are planning to move home to Ireland this time next year. Before we do, I am considering becoming a US citizen so that if we should ever think about returning to live here in the US - say to retire or things dont work out - we have that option without having to go through the hoops of Greencard application again - that and who knows what way the administration could change things for non -citizens. But I'm wondering what the implications of that are - taxation specifically. My husband will always want to keep his US passport so does that mean we'll have to file despite living in Ireland? Does that mean we'll get taxed on our income twice? We are not huge earners as of now but I'm afraid that if I apply for citizenship I might be screwing myself over regardless! Can anyone help or point me in the direction of someone who can?
Sincere thanks - Ingrid
When I moved back to Ireland from the US, I did have to continue to file US taxes (fed & CA) as a US green card holder. I don't know how that would have changed as years progressed, but I imagine at some point I would no longer be required to file (I have since moved back to the US).
Your husband MUST continue to file regardless. All US citizens are obliged to. The issue of double taxation starts to apply at certain income levels. Most people will not be double-taxed, however a tax accountant can best advise you on the details. There are plenty of options out there, but the service I used 2 years running, and am happy to refer people to, are Taxes For Expats. (that is an affiliate link, but if you'd rather go directly to their website, feel free to do so. However if you do go through that link, be sure to use code IMC50 for a $50 discount). Tax pro's, including Taxes for Expats, often have blogposts on this topic.
The issue of applying for citizenship is quite personal though. I'm not sure how to advise you there. If you are unsure how your future will turn out back in Ireland, then of course having dual nationality is a huge bonus.
Welcome to the site 🙂
Thanks so much Liam
Yes it seems to be when you are in the Tax System here you're in whether you reside here or not. My Greencard expires next year so I think I may as well apply for citizenship if we're going to have to continue to file for my husband anyways. We may hop back across the Atlantic to retire - who knows? It's good to have options. Thanks for the referral - happy to go through your link. This is the first of what I'm sure will be many questions!
Yeah, at some point I'll probably spring for US citizenship too. I just never really get around to it. In your case I can see the attraction though. It takes a while, so if you're certain, then it's best to get moving on it.
Happy to answer your questions as they come up. Sorry for the delay in this one though. Had family in town for a week, so I took a break form the site 🙂
If you think you might ever want to return to live in the US on your own then you should definitely apply for US citizenship as that would be a sure guarantee you could. If you think you would only go back to the US with your spouse then the decision to become a USC is not so clearcut as you have a ticket back into the US by virtue of marriage to a US citizen . Before deciding, you should be aware that living as a US citizen outside of the US can be burdensome and costly in time and or fees, and heaven help you if you fail to file the correct form and the IRS becomes aware of it (huge penalties). You need to weigh up the negative factors, e.g as a US citizen outside of the US you likely will not be able to participate in the same tax-saving retirement plans that your neighbours can use, and US taxes and filing requirements for a business, capital gains, gifts and estate taxes can be onerous and costly. As an overseas US citizen with middle income wages I paid little or no US taxes because of FTC (Foreign Tax Credit) and (FEIE) Foreign Earned Income Exemption deductions. But the IRS made it impractical to invest in "foreign" mutual funds and certain tax-free savings plans. If house prices continue to rise where I live then if I ever sold I would have had to pay the US capital gains as well as any taxes due in my country of residence. And it took me 40 hours each year to do US taxes and reporting. So last year I joined the thousands of people who paid the US $2350 fee and renounced US citizenship. I gave up the idea of retiring to the US because I couldn't afford the medical (not qualified for Medicare). As I had filed regularly and my net worth including the value of all retirement pensions and property was under US$2million I have now escaped the US tax regime. Those who renounce with more than $2million or who have not kept compliant with the IRS are subject to the cruel and unusual punishment of being immediately taxed on all assets, e.g. forced to sell their home to pay the tax. The US is the only country besides Eritrea that operates on Citizen-based Taxati0n. The rest of the world uses Residence-based taxation. Banks in some countries won't open an account for you if you are "US person", and your employer may avoid promoting US citizens into positions with signing authority, and the US paperwork if you ever start a "foreign" company causes grief. I still have my UK and Canadian citizenships but the US one has gone, as it was for me and thousands or others more of a liability than an asset. Enough was enough. If I were much younger and held on to the idea of working and living there again it would be different. If you decide that you don't want to become a US citizen before you leave then you should get advice to make sure you don't become a long-term lawful permanent resident who would be classified as a US person for federal tax purposes. Think about the I.407 green card abandonment form.
First off I want to thank you so much for the hugely insightful and personal first-hand information that you offered here. Your advice will be a benefit to so many people, thank you!
I find it is such a shame that the US has such a cumbersome and costly process in place that is forces people like you to renounce citizenship. Americans, probably like most other nationalities, have immense pride in their country and it is unfortunate that people feel the need to part ways with their birthright for the sake of some cash. I can totally see where you're coming from though, and as a green card holder the taxation issue has been a sticking point for me regarding citizenship.
I have read in the past that certain states can still come after you for tax even after you have renounced your citizenship, California being one of the trickier ones. Is that something that you have heard of or looked into?
Again, thank you for contributing your thoughts.