If I become a citizen of the United States and then decide to live in a foreign country, must I pay any form of taxes to the United States Government.

First scenario assume that all my income would be generated in the foreign country.

Second scenario assumes that some or all my income would be generated in the US while staying in a foreign country.

Third Scenario assume that my income is made from anywhere but I hold some bank accounts, investment accounts, 401k, IRA's in the USA.

  • 1
    You mean "expatriate", someone living outside their country. "expatriot" is someone who used to be loyal to their country. – DJClayworth Apr 15 '11 at 21:10
  • What did you decide, Mallow? Currently it's worse than my answer suggests. Not only does a U.S. citizen overseas have to file every year (whether or not owing money), that citizen also has to file an FBAR stating account balances if the citizen has sums in foreign banks that add up to $10,000 or more total. U.S. law for expatriates seems to include a presumption of guilt. – Kyralessa Nov 16 '20 at 12:29
  • I was in a very different situation in 2011. My decision has no relevance to your followup. The FBAR is a scary and effective deterrent to owning anything abroad. Analyses your risk for FBAR and get help (lawyer, accountant, other professionals) according to what your needs are at the moment. – Mallow Nov 16 '20 at 16:44

I've lived overseas in the past, and my understanding (albeit this was some ten years ago) is this:

If you're a US citizen, you must pay taxes to the U.S. on any income, earned in the U.S. or outside it. This definitely applies to "earned income", whether earned in the U.S. or outside it. I think it probably applies to capital gains but I'm less sure.

If the foreign country has a taxation rate lower than that of the U.S., you pay the difference between the two; you can deduct foreign taxes paid from the amount you'd owe.

However, if the taxation rate of the foreign country exceeds the rate of the U.S., you don't owe anything to the U.S.

This is a very basic understanding, but for specifics you really need to ask the IRS. No answer you get here will be authoritative.

  • Re: "No answer you get here will be authoritative." Technically true, yes, but answers here are welcome to quote or point to authoritative sources. We like that a lot. – Chris W. Rea Apr 15 '11 at 23:16
  • Good point. Added one link as a start. – Kyralessa Apr 15 '11 at 23:21
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    If the foreign country has taxation rate lower ... this is true only if there is dual tax avoidance treaty, for example between US & Singapore, but if its US and India, you would have to pay tax at both places. – Dheer Apr 16 '11 at 6:23
  • Thanks, I wasn't sure if this was still the case and it is the only thing that makes me wonder if I should become a citizen or not, since I do not yet know what adventures I want to take a part in, in my life :) When I'm ready I will see a professional – Mallow Apr 18 '11 at 5:19
  • It's important to note that while you may not owe anything to the US, you are still required to file in the US if you're a citizen. (The US is one of the few countries in the world to tax citizens who neither live there nor work there.) – Kyralessa Mar 26 at 15:12

As a US citizen, you'll have to a file a tax return on your worldwide income, no matter where you live. You'll also have to pay taxes to the IRS on that income, but there are various exemptions and foreign tax credits that come into play, so basically the IRS takes into account taxes paid abroad on income generated abroad.

This is a subject that really requires input from a qualified professional.

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