stevie223

I've been thinking about possibly getting US citizenship. I made a divorce post a few weeks ago with people saying I should apply for citizenship before leaving. This makes sense as it leaves the door open if I want to return in the future. This whole tax crap seems complicated or maybe I'm just an idiot lol, how much tax would I have to pay if i had no assets in America or savings and then moving to the UK for work. Let's just say I got a job with a 30k salary. How much of any would the US take on taxes? How much would it be to pay someone to file it for me?

durham_lad

This sounds similar to my son, except he does have a Roth IRA which he is letting grow for the next 2 or 3 decades. He files his own US taxes for free and it is very simple since he chooses to exclude all his UK salary using form 2555 (Foreign Earned Income Exclusion for earnings up to $107k). Consequently he pays no IRS taxes and since he has no USA income he pays his HMRC taxes through PAYE.

https://expatfile.tax/foreign-earned...QaAswAEALw_wcB

He does have to report his bank accounts, including employer pensions, on an FBAR each year but again that is easy to do online and is free.

stevie223

Thanks for your reply durham lad, I mean if I move back home I will have to do this regardless with my greencard anyway right? I've no idea if/when I'll move back to the UK. If I do I very much doubt ill move back to America again but can't count that out either. I've seen threads where people move back and forward and regret their decisions. I'm trying to be rational about everything but I don't want to owe taxes to a country I may never come back to aswell. It's a hard time trying to figure it out

durham_lad

I believe that once you have given up your greencard and have no assets or income in the USA then other than 1 US tax return the year you return you will never have to do another one.

If you are certain that you will never want to live or work again in the USA then not becoming a USC makes a lot of sense as you’ll never have another IRS return or FBAR to file.

stevie223

I'm not entirely sure whether or not I will return or not. I'm currently going through a divorce right now and so my only ties to American was my ex wife. Now everything is up in the air and I'm not sure whether I should stay in US or return closer to family back home

durham_lad

As a USC living in the UK there are some other tax reporting considerations. For example if you work for an employer with a DC pension plan, I believe that if you contribute more than the company match you have another form to file. If you open a cash ISA any interest is tax free in the UK but taxable in the US. If you have a stocks and shares ISA then any funds are treated as PFICs and taxed punitively by the IRS. You won’t be able to hold any investment funds outside of a pension plan without them being treated as PFICs.

It is all manageable but frustrating at times, even buying tax software to file yourself is difficult if you don’t have a US credit card with a US address.