Thinking About Moving Outside the United States? Simple Factors to Consider Before Making a Move

Should I stay or should I go? More people are thinking about moving out of the United States for many different reasons. Some want new career opportunities, a different lifestyle, more global mobility, to be closer to family, or simply because the world in the United States feels overwhelming. Others are thinking about long term tax planning or starting fresh somewhere new.

Before making a move, it is important to understand how your U.S. status affects your taxes and legal obligations.

If you keep your U.S. citizenship: Your tax situation does not change much. The United States continues to tax citizens on income and assets no matter where they live.

If you give up citizenship or end long term resident status: The rules become more complex. The United States has an exit tax that may require you to pay tax on gains you have not yet realized. There are also many nontax issues to consider, such as immigration rules in your new country, your ability to return to the United States, access to benefits, and how your move could affect inheritance or financial accounts.

Careful planning can help you:

• Make the most of the Foreign Earned Income Exclusion

• Reduce possible exit tax

• Structure foreign investments wisely

• Handle deferred compensation

• Stay compliant and avoid penalties or covered expatriate status

• Understand any limits on reentry or benefits after you leave

A person is treated as a U.S. taxpayer if they are a U.S. citizen or if they meet the substantial presence test or hold a green card. These individuals are taxed on worldwide income and assets. Simply moving abroad does not change this. The only way to end U.S. tax residency is to formally give up citizenship or officially abandon a green card.

If you have any questions or would like to schedule a check-up appointment, please call Rehberg Law Group at 206.246.8772 or email at contact@rehberglaw.com to schedule an appointment.