Why US Tax Season Never Ends When You’re an American Citizen Living Abroad

There are many things to look forward to during the year: Christmas, spring break, summer holidays, birthdays and more. But for American expats, US tax season is never one of these moments, and it can be a year-long obligation for most. Many are physically and emotionally exhausted after the time spent addressing the annual filings, paying high accounting and legal fees, and knowing they need to take the proper steps to ensure next year’s filings are not a disastrous surprise.

If you’re a US expat tired of the financial and emotional cost of filing cross-border US taxes, now is the time to consider renouncing your US citizenship before the calendar turns to 2024 and you have yet another annual filing obligation. That’s great news for your US tax preparer every year, but not great news for your sanity!

US citizens living abroad don’t need to be stuck in this “Groundhog Day” time loop of reliving the same tax burden every year. Renouncing your US citizenship the right way can be a safe and legal way out of double taxation and other pitfalls. Should one decide to renounce, the issue is getting an appointment at a Consulate or Embassy. In many locations, wait times can be more than 18-24 months. And the day of that interview is when you stop being taxed by the US based on your citizenship. Thus, it is a race to the altar to make 2023 the last US tax return they ever file. An interview date to renounce in January 2024 means a 2024 US tax filing headache and cost.

The good news is that we are constantly monitoring US Consulates and Embassies worldwide with shorter wait times for those looking to make 2023 the last US tax return they ever file. But the clock is ticking.

More US citizens than ever are deciding to renounce their US citizenship to alleviate their tax burden. In 2022, more than 3400 US expats officially renounced their citizenship. Despite 2021 providing lower figures because of the pandemic, the number of renunciations is on the rise. Between 2005 and 2009, fewer than 2,500 US expats renounced their citizenship. Between 2010 (the year the Foreign Account Tax Compliance (FATCA) was passed into law) and 2020, that number soared to 36,840, with record wait times and lines worldwide to get appointments.

Our firm fully understands the importance of renouncing our client’s US citizenship properly. The key word in that phrase is “properly.” If US citizenship or green card is not terminated correctly, one can be subject to tens of thousands of dollars in failure-to-file penalties, as well as an exit tax and covered expatriate status. The US has many pitfalls and landmines (exit tax, inheritance tax, disbarment from the US for life, loss of benefits, etc.) that one must successfully navigate in renouncing properly. Our firm can work with you and ensure these pitfalls are avoided.

Our team of US lawyers represents between 600 and 900 US citizens and green card holders who decide to renounce their US status correctly every year on six continents – more than any other firm in the world. We can also help expedite your renunciation process by identifying US embassies and consulates with shorter wait times.

We’ve helped thousands of US expats and green card holders successfully terminate their citizenship status – but, again, it MUST be done the right way.

If you or a family member is a US citizen or green card holder considering renunciation, we invite you to visit our dedicated webpage for more information. This page contains links to register for our upcoming renunciation webinars. You can find one tailored to your geographic location in our events listings.

These webinars thoroughly review everything you need to know about the US citizenship renunciation process and available options should you decide to take the next steps.

Click here to view our upcoming Renunciation Webinars and register

If you would like to get the process started on addressing your US issues immediately (with legal fees in mind), please schedule a one-hour call or video conference consultation with me by:

• Signing up on our virtual calendar or
• Contacting Jeanine Wilk at jwilk@moodystax.com or 403-693-5124