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Renunciation of US Citizenship & tax filing advice for Son

Renunciation of US Citizenship & tax filing advice for Son

Old Aug 24th 2020, 4:18 pm
  #16  
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by SadInStates View Post
Thank you Durham_lad, I must have missed your reply while I was posting.

Oh my goodness - I didn't know about ISA's and work pensions - must tell my son at once as he's starting his first job next month and is planning on opting into the employer pension scheme and opening up a LISA!!!
It really is a pita being a US citizen living abroad. We had none of this being UK citizens in the US!
My son opted into his UK employer's pension scheme and contributes to get the company match. No extra form filling required when filing taxes with the IRS although the company match is considered to be remuneration and therefore taxable. He keeps things simple and excludes all his UK wages using the Foreign Earned Income Exclusion (FEIE - form 2555). He files his own taxes using TurboTax. The value of the money in the company pension plan does need to be reported on an FBAR, assuming the FBAR limit of $10,000 is reached (max value of all financial accounts).
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Old Aug 24th 2020, 4:34 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by Giantaxe View Post
If I moved back to the UK and had no nexus with the US moving forward, I would undoubtedly renounce. Really, the fact that many people want to get into the US would have no bearing on my decision.
Exactly.
In fact what exactly are all these advantages of being a USC - apart from being able to live there indefinitely and potentially be drafted into their military against your will? I honestly can't think of one other benefit, especially if you are not living there and have no ties with the country whatsoever.

But my original question was about being fully tax compliant for 5 years when you've not had any income (eg been a full-time student) so haven't needed to file, and it seems you don't - so he is!
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Old Aug 24th 2020, 4:42 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by durham_lad View Post
My son opted into his UK employer's pension scheme and contributes to get the company match. No extra form filling required when filing taxes with the IRS although the company match is considered to be remuneration and therefore taxable. He keeps things simple and excludes all his UK wages using the Foreign Earned Income Exclusion (FEIE - form 2555). He files his own taxes using TurboTax. The value of the money in the company pension plan does need to be reported on an FBAR, assuming the FBAR limit of $10,000 is reached (max value of all financial accounts).
Thanks. Such a pita - especially for a young adult just starting out on the road to independence!
My daughter is at uni too and will have a year in industry soon but being in mid Wales is nowhere near an Embassy to schedule an appointment so has been putting it off. I'm sure the first tax filing will focus her mind a bit!
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Old Aug 24th 2020, 4:59 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Hopefully your son is under 18 1/2 as renouncing citizenship is slightly less complicated. A lot of UK banks now don't want to touch any US citizen. There are pros and cons. If he wants to move to the US , much easier if he has a US passport.. There is a lot to weigh up. Anything financial he will need to mention that he is a US citizen if he wants to stay compliant.


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Old Aug 24th 2020, 6:13 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by mrken30 View Post
Hopefully your son is under 18 1/2 as renouncing citizenship is slightly less complicated. A lot of UK banks now don't want to touch any US citizen. There are pros and cons. If he wants to move to the US , much easier if he has a US passport.. There is a lot to weigh up. Anything financial he will need to mention that he is a US citizen if he wants to stay compliant.
He is 22. He wasn't in a position to make that decision at 18 (and we recommended that he waited a bit to be sure) and he certainly wasn't in the position be able to afford it! The equivalent of $2350 is going to be earmarked for it from his first pay packet!!
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Old Aug 24th 2020, 6:18 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by SadInStates View Post
Exactly.
In fact what exactly are all these advantages of being a USC - apart from being able to live there indefinitely and potentially be drafted into their military against your will? I honestly can't think of one other benefit, especially if you are not living there and have no ties with the country whatsoever.
Ability to vote, do jury service and live outside the US without risking the ability to move back are the main reasons I became a citizen. Plus I have US born (now adult) children and presumed I would always have a nexus with the US anyway.
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Old Aug 24th 2020, 6:37 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by Giantaxe View Post
Ability to vote, do jury service and live outside the US without risking the ability to move back are the main reasons I became a citizen. Plus I have US born (now adult) children and presumed I would always have a nexus with the US anyway.
did your children return/stay to the us or return to and stay in the U.K.?
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Old Aug 24th 2020, 7:14 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by Ukoneday View Post
did your children return/stay to the us or return to and stay in the U.K.?
They are all in the US as they have been their whole lives. Of course, there is no guarantee that will remain the case...
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Old Aug 24th 2020, 7:42 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by Ukoneday View Post
did your children return/stay to the us or return to and stay in the U.K.?
My younger 3 were born in the US, the elder ones became citizens with us - not because they particularly wanted to but because their green cards were expiring too! They didn't have to do a thing - just show up with us at the oath ceremony and they were automatically included as they were minors. It's funny how you are allowed to choose USC for your minor children, but not renounce it for them!

My eldest was 18 and just finishing 12th grade when we moved back as a family,. He was adamant that he wasn't going with us so he remained- working and living with friends. He cut it for 18 months before asking for a ticket over.
My kids could end up living anywhere in the world, but that doesn't mean I'd follow them! I know many parents who sold up to be closer to their children, only for said children to later be relocated thousands of miles away!
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Old Aug 24th 2020, 9:11 pm
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Default Re: Renunciation of US Citizenship & tax filing advice for Son

Originally Posted by mrken30 View Post
A lot of UK banks now don't want to touch any US citizen. There are pros and cons. If he wants to move to the US , much easier if he has a US passport.. There is a lot to weigh up. Anything financial he will need to mention that he is a US citizen if he wants to stay compliant.
That’s news to me about the banks. Do you have any actual evidence of that? I’ve certainly not come across any.
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