Certainly I am in shock.
I've been planning my ER for a few years now and I'm looking at making it a reality by the end of 2008. I am looking at moving overseas and I have researched the tax implications/advantages of my future new home, which has a tax treaty with the US. But I got to thinking that since I plan to become a citizen of my new country, why should I retain citizenship in the US? I know that as long as I am a US citizen, I will have to pay US taxes no matter where I live. This, in principle bothers me, because I cannot understand why I have to pay taxes when I don't live in the US. So I thought, ok, renounce my US citizenship. Well, you can't do that for tax purposes. OK. So I won't, I'll do it for the simple fact that I love my new country, I will have become a citizen of my new country, and I have no intention of returning to the US. But then, I looked into what would happen if I kept my money in the US because I have IRAs and pensions (I know what to do about SS). So it appears that if I renounce my US citizenship, but still have this money in the US, I will be taxed as a non-resident alien (that was a new term for me) at the rate of 30% (I think it's 30%, if I recall correctly). So it would be better for me to keep my citizenship and pay the US taxes because I would have a lower rate than 30%.
I am just amazed at how far-reaching the US tax-hold is. I had no idea that they could do this.
Meanwhile, I am looking for advice on how to move money out of the US to my new country in a manner that is most financially beneficial to me. I am looking for how to find someone who could offer this professional advice. I have no idea how to find these kind of financial advisors since most people who do this kind of thing are multi-millionaires and unfortunately I am not. My financial advisor is trying to find someone to answer my questions, but no luck so far.
I've been planning my ER for a few years now and I'm looking at making it a reality by the end of 2008. I am looking at moving overseas and I have researched the tax implications/advantages of my future new home, which has a tax treaty with the US. But I got to thinking that since I plan to become a citizen of my new country, why should I retain citizenship in the US? I know that as long as I am a US citizen, I will have to pay US taxes no matter where I live. This, in principle bothers me, because I cannot understand why I have to pay taxes when I don't live in the US. So I thought, ok, renounce my US citizenship. Well, you can't do that for tax purposes. OK. So I won't, I'll do it for the simple fact that I love my new country, I will have become a citizen of my new country, and I have no intention of returning to the US. But then, I looked into what would happen if I kept my money in the US because I have IRAs and pensions (I know what to do about SS). So it appears that if I renounce my US citizenship, but still have this money in the US, I will be taxed as a non-resident alien (that was a new term for me) at the rate of 30% (I think it's 30%, if I recall correctly). So it would be better for me to keep my citizenship and pay the US taxes because I would have a lower rate than 30%.
I am just amazed at how far-reaching the US tax-hold is. I had no idea that they could do this.
Meanwhile, I am looking for advice on how to move money out of the US to my new country in a manner that is most financially beneficial to me. I am looking for how to find someone who could offer this professional advice. I have no idea how to find these kind of financial advisors since most people who do this kind of thing are multi-millionaires and unfortunately I am not. My financial advisor is trying to find someone to answer my questions, but no luck so far.