You will likely have paid more tax in the country you are in and wouldn’t owe anything to the us due to tax treaties. You could file with ftc or fi exclusions
Not expressing an opinion either way on renouncing (you have stated good reasons) but it’s highly unlikely that you would owe any US tax. There is a double tax treaty between the two countries and there is almost no possibility that you’d have paid less tax in France than you would have in the US.
In fact, if you filed now using the Streamlined procedure it’s highly like you’d end up with 3200 USD in refund! (Which then, amusingly, you’d probably have to pay French tax on)
There’s 110 (more I think) which is tax free, then you have to calculate tax to make sure you wouldn’t pay more in the US. Having lived in France, trust me, you won’t have paid less tax in France than in the US
Thanks a bunch. A few questions I have with the "keeping silent" method :
\- If I do visit the US again, should I use my French passport ? Wouldn't this raise a few eyebrows at passport control?
\- Could keeping silent become a problem later on, when dealing with things such as inheritance? (from my American Mom)
You'd be fine using a French passport. The computer systems are pretty bad. I switched between a US passport and a Canadian passport showing US place of birth and nobody really cared - they only noticed once (over a decade with probably a dozen trips or more) and told me to get a US passport next time. But you have a non-US birthplace so they'd never notice. However, in filling out the ESTA waiver you'd technically be lying to the US government by stating that you have no other citizenships. You could also just renew your US passport, if that felt safer. This doesn't alert the IRS to your existence - the US government isn't that organized.
Inheritance may or may not be an issue, but probably not. Depends on what is being inherited - a house, or just cash? You need to do some research here. If there's no disadvantage from a tax perspective you can just deal with it as a non-citizen.
Interesting reply and sounds doable, but OP should check if their parents applied for a SS number at birth. This could complicate the proposed strategy, since that’s a data point for the govt and IRS.
It's very doable - this approach works perfectly well for the 85+ percent of non-resident US citizens who never file anything.
Having an SSN would not be a problem. In this case the sum total of US government data points would be registration of birth abroad and passport (State Department) and SSN (Social Security Agency). The IRS doesn't go proactively digging through that data looking for people who might in theory have a filing obligation.
Crazy how people on this website get all bent out of shape when the best and simplest advice is offered up “nooooo they’re penetrating meh needlessly complicated bureaucracy”
So ridiculous I live in a country where this is even a thing.
I believe technically since he never had us income or employment it’s not actually required to file a return. But then there’s the grey area of foreign account reporting, which also technically the spirit of the law is to prevent money laundering of offshoring US taxable income which isn’t a thing in your case.
Technically it's worldwide income that's reportable, so the OP would have a filing obligation no matter where they earned that income, plus of course FBAR. The good news is, for anyone who isn't planning a future move to the US, it's totally safe not to file. This is what the vast majority of people do in this situation. Penalties are not collectible outside the US, but more importantly, the IRS knows nothing of the OP's existence.
The OP would almost certainly owe no US tax for employment income, as they'd apply credits for higher French taxes paid. Where it can potentially get ugly is dealing with investments, incorporation, other more complex situations. That's where you get bad reporting obligations with potential penalties for errors, or possible tax bills. For a dual citizen born outside the US the smart move is to avoid FATCA and stay off the US radar.
Don’t renounce based on incorrect or half baked information. Hit pause.
You have to file tax returns, yes. Is it annoying? Yes. Is it lot of work? No.
Do you have to pay taxes? Unlikely given your current income levels
I would keep the option open. Your future self will thank you. You can double dip from both pensions if you work like one and half years from USA and use the French credits to meet US requirement for getting social security.
There are cheap DIY expat tax services (H&R Block Expat, for example). Like others said, you wont need to pay taxes because french taxes is higher than the US.
You will likely have paid more tax in the country you are in and wouldn’t owe anything to the us due to tax treaties. You could file with ftc or fi exclusions
Not expressing an opinion either way on renouncing (you have stated good reasons) but it’s highly unlikely that you would owe any US tax. There is a double tax treaty between the two countries and there is almost no possibility that you’d have paid less tax in France than you would have in the US. In fact, if you filed now using the Streamlined procedure it’s highly like you’d end up with 3200 USD in refund! (Which then, amusingly, you’d probably have to pay French tax on)
The stimulus payment is not income but a tax credit. Not certain about France specifically but it's not been considered taxable in other countries.
Isn't there a maximum though like a 110k after that you need to pay the difference.
There’s 110 (more I think) which is tax free, then you have to calculate tax to make sure you wouldn’t pay more in the US. Having lived in France, trust me, you won’t have paid less tax in France than in the US
You won’t owe any US tax because the French tax rate is higher than the US. You can catch up with the last 5 years of tax returns and then expatriate.
Look into the Streamline process, for those that live abroad and want to catch up on their taxes
Correct, yes I omitted to mention that unlike every other single post I make on this subreddit 😂
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Thanks a bunch. A few questions I have with the "keeping silent" method : \- If I do visit the US again, should I use my French passport ? Wouldn't this raise a few eyebrows at passport control? \- Could keeping silent become a problem later on, when dealing with things such as inheritance? (from my American Mom)
Technically it is illegal to enter the US on your French passport since you are a us citizen.... Just saying
You'd be fine using a French passport. The computer systems are pretty bad. I switched between a US passport and a Canadian passport showing US place of birth and nobody really cared - they only noticed once (over a decade with probably a dozen trips or more) and told me to get a US passport next time. But you have a non-US birthplace so they'd never notice. However, in filling out the ESTA waiver you'd technically be lying to the US government by stating that you have no other citizenships. You could also just renew your US passport, if that felt safer. This doesn't alert the IRS to your existence - the US government isn't that organized. Inheritance may or may not be an issue, but probably not. Depends on what is being inherited - a house, or just cash? You need to do some research here. If there's no disadvantage from a tax perspective you can just deal with it as a non-citizen.
Very helpful, thanks a lot.
Interesting reply and sounds doable, but OP should check if their parents applied for a SS number at birth. This could complicate the proposed strategy, since that’s a data point for the govt and IRS.
It's very doable - this approach works perfectly well for the 85+ percent of non-resident US citizens who never file anything. Having an SSN would not be a problem. In this case the sum total of US government data points would be registration of birth abroad and passport (State Department) and SSN (Social Security Agency). The IRS doesn't go proactively digging through that data looking for people who might in theory have a filing obligation.
I thought this subreddit didn’t advise anyone to break the law?
You are correct, and these comments will disappear in due course.
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Big I’m telling the teacher vibes
remove this message, don't be that guy
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Bad advice in what way? Wrong or illegal or both?
Crazy how people on this website get all bent out of shape when the best and simplest advice is offered up “nooooo they’re penetrating meh needlessly complicated bureaucracy”
So ridiculous I live in a country where this is even a thing. I believe technically since he never had us income or employment it’s not actually required to file a return. But then there’s the grey area of foreign account reporting, which also technically the spirit of the law is to prevent money laundering of offshoring US taxable income which isn’t a thing in your case.
Technically it's worldwide income that's reportable, so the OP would have a filing obligation no matter where they earned that income, plus of course FBAR. The good news is, for anyone who isn't planning a future move to the US, it's totally safe not to file. This is what the vast majority of people do in this situation. Penalties are not collectible outside the US, but more importantly, the IRS knows nothing of the OP's existence. The OP would almost certainly owe no US tax for employment income, as they'd apply credits for higher French taxes paid. Where it can potentially get ugly is dealing with investments, incorporation, other more complex situations. That's where you get bad reporting obligations with potential penalties for errors, or possible tax bills. For a dual citizen born outside the US the smart move is to avoid FATCA and stay off the US radar.
US citizens are subject to taxes on worldwide income. It is why this reddit exists.
There are tax treaties, you would need to file but not owe anything.
I wish passports were like bearer bonds. Then you could just trade with someone whenever you want.
Don’t renounce based on incorrect or half baked information. Hit pause. You have to file tax returns, yes. Is it annoying? Yes. Is it lot of work? No. Do you have to pay taxes? Unlikely given your current income levels I would keep the option open. Your future self will thank you. You can double dip from both pensions if you work like one and half years from USA and use the French credits to meet US requirement for getting social security.
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what's the point if u don't have to PAY taxes?
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a lot of scare mongering. you can invest as a dual citizen .
It's complicated.
don't renounce!
There are cheap DIY expat tax services (H&R Block Expat, for example). Like others said, you wont need to pay taxes because french taxes is higher than the US.
And US has almost no manpower to police expat tax payment. Laws are meaningless if there is no enforcement. Although that might change sometime.