Maintaining US Citizenship

[Gypsy Angel]

I'm sure there is probably another thread about this topic somewhere, but I can't seem to find it. Please bare with me...

My bf and I are actively planning to become live aboard cruisers in the next 1-2 years. What do we need to maintain our U.S. citizenship? Is a residence required or can we just throw all our stuff in storage and hit the water?

We will also be homeschooling our teenage son. If there is a thread on this topic, please send me that way...

[Reality Check]

I think the Key is not to become dead or disavow your citizenship. You still may have none citizenship issues such as taxes, insurance and money and your need of an active passport.

[noreault]

You don't lose your citizenship if you are out of the country, doesn't matter how long. You do need to keep your passport current (they last 10 years), but that is only so you can get into other countries. The US has world taxes and you are required to submit to the IRS, but not to your last state of residence. If you want to vote in federal elections you maintain registration with the election district you last resided in.

[TaoJones]

Originally Posted by Gypsy Angel

I'm sure there is probably another thread about this topic somewhere, but I can't seem to find it. Please bare with me...

My bf and I are actively planning to become live aboard cruisers in the next 1-2 years. What do we need to maintain our U.S. citizenship? Is a residence required or can we just throw all our stuff in storage and hit the water?

We will also be homeschooling our teenage son. If there is a thread on this topic, please send me that way...

Fear not, Gypsy Angel. Your US citizenship is virtually one with the marrow of your bones.

The US is much more interested in your taxes than your location on the face of the planet, and it, alone, among first-world nations (and all nations, as far as I know) bases your tax liability upon your citizenship, not your residency. Thus, it is in the nation's interest that American citizens remain American citizens, and cannot easily slough off their obligation to pay US taxes, even by renouncing their US citizenship!

If you think about it, all nations would probably like to do this, so what makes the US the only nation that does so? Without a doubt, it is because the US has the resources and world-wide "reach" to enforce its wishes in this regard. As other nations emerge to challenge the US for world domination, they, too, will probably consider taking similar action. The real question will be how long the US can maintain this policy as its influence and reach declines.

Another member of Cruisers Forum has put forth the notion that he is so disgusted with how deeply the various levels of government reach into his pockets to extract his hard-earned wealth, that he intends to emigrate to another country (in his case, the UK) to put his dollars beyond their reach. Boy, is he in for a rude awakening!

Even if an American renounces his/her citizenship, US law still obligates such former citizens to file US tax returns and pay US taxes on worldwide income for ten more years.

So you can rest easily, Gypsy Angel. Your US citizenship will still maintain no matter where you go, or how long you're gone. If your passports expire while you're half-way 'round the world, you just need to visit your nearest American consulate at least six months prior to expiration to get new passports. And even if you have other children long after you've left the US, guess what - they are US citizens, as well.

Is this a great country, or what!?

Here's a link to an on-point article in the International Herald Tribune:

Americans abroad are giving up citizenship for lower taxes - International Herald Tribune

TaoJones

[Chattcatdaddy]

Originally Posted by TaoJones

Even if an American renounces his/her citizenship, US law still obligates such former citizens to file US tax returns and pay US taxes on worldwide income for ten more years.

Here's a link to an on-point article in the International Herald Tribune:

Americans abroad are giving up citizenship for lower taxes - International Herald Tribune

TaoJones

That article is interesting. It stated that they tried to pass the law for taxes for ten more years after renouncing citizenship. That would be kinda hard to enforce seeing that the US would have to go thru a lot of trouble to collect the taxes from a non-citizen.

Anyone here on these boards renounced US citizenship?

[Pelagic]

Nicely put Tao…but one or two questions:

Does the US now allow dual nationality, ie. dual passports?

If so, then who would claim tax jurisdiction on world income?

[TaoJones]

Originally Posted by Pelagic

Nicely put Tao…but one or two questions:

Does the US now allow dual nationality, ie. dual passports?

If so, then who would claim tax jurisdiction on world income?

Yes, the US recognizes dual citizenship/dual nationality although it was not always so, and newly naturalized US citizens are still required to take an oath renouncing their prior citizenship. It's a strange dichotomy, I know, but it has little force in law. The newly naturalized US citizen, though he/she may willingly take the oath of renunciation, is often considered to still be a citizen under the laws of his prior homeland, and there are instances where such individuals have been unwillingly placed in the armed forces of their country of birth upon returning to the country on a visit.

This is a very complicated area, to be sure, but there are numerous sites on the web that carry a great deal of information in this regard. For example, these two are note-worthy:

Dual Citizenship FAQ

US State Department Services Dual Nationality

As to the tax liability question, I can only post what I believe to be the case, and I assume others who are more up-to-speed on the subject will correct me if this is inaccurate. If a US citizen earns income in another country and is obligated to pay income taxes to that country, he is given credit on his US tax obligation for any such taxes paid. He would only have to pay tax to the US if his obligation as calculated under the US Tax Code exceeds the amount paid to the country where the income was earned.

TaoJones

[Hiracer]

Originally Posted by TaoJones

As to the tax liability question, I can only post what I believe to be the case, and I assume others who are more up-to-speed on the subject will correct me if this is inaccurate. If a US citizen earns income in another country and is obligated to pay income taxes to that country, he is given credit on his US tax obligation for any such taxes paid. He would only have to pay tax to the US if his obligation as calculated under the US Tax Code exceeds the amount paid to the country where the income was earned.

TaoJones,

The reason why this is so complicated is because there is no law in the sense of Internal Revenue Code 'statutes.' The taxation of duel citizens is determined by treaty between the countries, and in the absense of a tax treaty then taxes for both countries is fully owed (i.e., double taxation).

[delmarrey]

Don't quote me but I believe one has to pay the taxes to the country from which they are receiving the money and are a citizen to at the time.

e.g. My wife has three citizenships. US, Canadian an Philippines. While she was a worker in Canada but not yet a citizen she had to pay taxes to Canada and the Philippines. After her citizenship to Canada she could stop payment to P.I. and only pay Canada. Now that she is a US citizen and working here she only has to pay US taxes.

It's really a complicated situation but it's always best to talk to tax reps in all countries of income to find out who has the priority or shared.

[Islander]

I have dual Irish and US citizenship.

As I understand it, one can leave the US and after 10 years, assuming you have another citizenship, renounce US citizenship and cease to be liable for US taxes. It seems, though, that in this case you may be prevented from entering the US ever again!

However, most countries (at least those I would ever consider living in) have dual taxation agreements with the US and each other, so in reality all you are renouncing is the requirement to file US tax returns. US taxes being generally lower than other countries' you probably pay nothing to the IRS, unless you are in some tax-haven for the mega rich.

I don't recall anything in the naturalization process requiring me to renounce my Irish citizenship, just "fealty to foreign princes and potentates" - probably relevant to those who served in foreign armed forces or worked in sensitive public service positions.

Irish citizenship cannot be renounced or removed. The only effect of dual citizenship from Ireland's perspective is they will no longer make representation on your behalf in the US (if you get into difficulty), but outside the US they will.

I think in the cruising context dual citizenship will be very useful (I'm not out there yet so I'm speculating). I believe there are countries that allow EU citizens stay longer than US citizens without a need to renew visas etc. Also, it may be possible to import a boat into the EU free of VAT at some stage and avoid the 18 month limit on cruising Europe.

I'm not an attorney, so please disregard all the above!

Cheers.

[James S]

Maintaining a non resident status may have some tax benefits.

[Hud3]

Originally Posted by Gypsy Angel

I'm sure there is probably another thread about this topic somewhere, but I can't seem to find it. Please bare with me...

My bf and I are actively planning to become live aboard cruisers in the next 1-2 years. What do we need to maintain our U.S. citizenship? Is a residence required or can we just throw all our stuff in storage and hit the water?

We will also be homeschooling our teenage son. If there is a thread on this topic, please send me that way...

We seemed to have wandered a bit astray, talking about renouncing US citizenship. I think Gypsy Angel is asking the opposite--how to keep her US citizenship. Several posters have given the correct answer--you don't need to do anything.

There are some other considerations that need to be thought through, however, like how to vote via absentee ballot, how to get mail forwarded, how to maintain a US address if your credit card company requires it (most do), whether your state drivers' licenses will still be valid when you come back to the US for a visit, how to renew your passport if it is about to expire, will you have to pay state taxes, etc.

And, here's a link to some threads on homeschooling.

[sck5]

I have lived overseas for many years at a time in the past and the above posters are correct that there is no expiration date on US citizenship. You can, however, lose it if you swear allegiance to a foreign government. This was important back in the day when I was in high school in Mexico, which had a policy of requiring all men to serve a year of military duty when they came of age. That meant that men had a problem with maintaining dual citizenship but women did not. A quirk in the law means that there is no problem if you served in the foreign military BEFORE becoming a US citizen. A Dutch friend of mine became naturalized in the US but didnt have to renounce Dutch citizenship because his military service and oaths of allegiance to the Netherlands were in the past. Note that military service isnt the only thing that would require you to swear allegiance to a foreign government but it is the most common issue.

I am a bit fuzzy on the tax rules since they have been in flux in the past few years. Not too long ago you had to be out of the US continuously for 13 months to not have to pay taxes and after that could visit for no longer than one month a year. That may have changed though.

On maintaining a US address, my sister picked my house to "live" in while she worked overseas for a while. That meant her voter registration and car license renewal came to my house so she could vote absentee and still drive. We live in the same state so there wasnt any real complication but you can pick anywhere people are willing to collect mail for you as your "permanent" address. It isnt strictly legal but it works.

[Meck]

Hi all, this is a subject that I have been looking into as well. Obviously to maintain your good citizenship in the US you have to file your taxes every year. But, if you are living outside the US for 190 days (or there a bouts) or more your "outside" income is free of tax up to $80K per person ($180K if you are married and file jointly). So, you can definitely maintain citizenship and earn income without paying a lot to the piper...

Good luck, we're right behind you!

Jon and Jules

[James S]

Originally Posted by Meck

Obviously to maintain your good citizenship in the US you have to file your taxes every year.
Jon and Jules

I think if you have no income, you don’t even have to file...I think?