Why 49% of American Expats Are Ready to Renounce U.S. Citizenship

For many American expats, the decision to keep or renounce U.S. citizenship is no longer just a distant thought—it’s a pressing issue. Nearly half of all Americans living abroad now say they are seriously considering giving up their U.S. citizenship, a number that has jumped sharply in recent years. This trend is not just about politics or personal feelings. It’s shaped by a mix of tax rules, banking problems, and the real-life challenges of living as an American outside the United States 🇺🇸.

This guide compares the two main options for American expats: keeping U.S. citizenship or formally renouncing it. We’ll look at the requirements, timelines, costs, and the pros and cons of each path. By the end, you’ll have a clear sense of which choice might fit your situation best.

Why Are So Many American Expats Considering Renunciation?

Before diving into the comparison, it’s important to understand what’s driving this surge. According to analysis from VisaVerge.com, the main reasons include:

• Citizenship-Based Taxation: The United States 🇺🇸 taxes its citizens on all their income, no matter where they live. This means American expats must file U.S. tax returns every year, even if they earn no money in the U.S. This rule is rare—almost no other country does this.
• Banking and Financial Restrictions: U.S. laws like the Foreign Account Tax Compliance Act (FATCA) force foreign banks to report accounts held by Americans. Many banks simply refuse to deal with U.S. citizens, making it hard for expats to open accounts, get loans, or invest.
• Political and Personal Disillusionment: Many expats are unhappy with U.S. politics or policies. Some feel disconnected or frustrated by decisions made back home.
• Practical and Emotional Factors: Some expats are “accidental Americans”—people who didn’t even know they were U.S. citizens until a bank flagged them. Others are parents worried about passing these burdens on to their children.

With these challenges in mind, let’s compare the two main options.

Option 1: Keeping U.S. Citizenship as an Expat

Requirements and Ongoing Obligations

If you keep your U.S. citizenship while living abroad, you must:

• File U.S. tax returns every year. This includes reporting all worldwide income, even if you pay taxes in your new country.
• Report foreign bank accounts. If you have more than $10,000 in foreign accounts, you must file a special report called the FBAR (Report of Foreign Bank and Financial Accounts). Official FBAR Form
• Comply with FATCA rules. Your foreign banks may ask for extra paperwork or even refuse to serve you.
• Stay aware of U.S. laws. Changes in tax or banking rules can affect you, even if you haven’t lived in the United States 🇺🇸 for years.

Timelines and Costs

• Annual tax filing: Every year, usually by June 15 for expats (with possible extensions).
• Tax preparation costs: Many expats need to hire accountants who understand both U.S. and foreign tax laws. Fees can range from a few hundred to several thousand dollars per year.
• Possible double taxation: While tax treaties exist, they don’t always prevent paying taxes to both countries.

Pros of Keeping U.S. Citizenship

• Right to live and work in the United States 🇺🇸: You can return at any time, with no visa or permit needed.
• Access to U.S. government services: This includes Social Security, Medicare (if you return), and consular help abroad.
• Ability to pass citizenship to children: Your kids may be able to claim U.S. citizenship.
• Voting rights: You can vote in U.S. elections, even from abroad.

Cons of Keeping U.S. Citizenship

• Ongoing tax and reporting burden: Filing U.S. taxes from abroad is complex and time-consuming.
• Banking problems: Many foreign banks don’t want U.S. clients because of FATCA.
• Risk of double taxation: Some income may be taxed by both the United States 🇺🇸 and your new country.
• Possible inheritance and gift tax issues: U.S. rules can affect your estate planning, even if you live elsewhere.

Option 2: Renouncing U.S. Citizenship

Requirements and Steps

Renouncing U.S. citizenship is a formal, legal process. Here’s what it involves:

1. Book an appointment at a U.S. embassy or consulate abroad. Due to high demand, wait times can be months or even years.
2. Attend an in-person interview. You’ll need to explain your reasons and show you understand the consequences.
3. Pay the renunciation fee. As of 2025, this is $2,350.
4. Sign an oath of renunciation. This is a legal statement that you are giving up your citizenship.
5. Receive a Certificate of Loss of Nationality (CLN). This is your official proof that you are no longer a U.S. citizen.
6. File a final U.S. tax return. This is called the “dual-status” return, and you may also need to pay an “exit tax” if your assets are above a certain level. IRS Expatriation Tax Information

Timelines and Costs

• Appointment wait time: Can range from a few months to over a year, depending on the embassy or consulate.
• Renunciation fee: $2,350 (non-refundable).
• Final tax filing: Must be done for the year you renounce. If you are a “covered expatriate” (high net worth or high income), you may owe an exit tax.
• Legal and accounting fees: Many people hire lawyers or tax experts to help with the process. Costs vary widely.

Pros of Renouncing U.S. Citizenship

• No more U.S. tax filing or reporting: You are free from citizenship-based taxation and FATCA rules.
• Easier banking abroad: Foreign banks are more willing to serve you once you are no longer a U.S. citizen.
• Simpler estate planning: You avoid U.S. inheritance and gift tax rules.
• No risk of double taxation: You only pay taxes in your new country.

Cons of Renouncing U.S. Citizenship

• Loss of right to live and work in the United States 🇺🇸: You would need a visa to visit or return, just like any other foreigner.
• No access to U.S. government services: This includes Social Security (in some cases), Medicare, and consular help.
• Possible exit tax: High-net-worth individuals may owe a large tax bill when they renounce.
• Irreversible: Once you renounce, you cannot get your citizenship back easily.
• Impact on family: Your children may lose the right to claim U.S. citizenship, depending on their age and situation.

Side-by-Side Comparison Table

Pros and Cons for Different Situations

For Long-Term Expats

• Pros of Renouncing: No more tax headaches, easier banking, and simpler life abroad.
• Cons of Renouncing: Lose the safety net of U.S. citizenship if you ever want to return.

For Dual Nationals

• Pros of Renouncing: If you already have another citizenship, you won’t become stateless. You can fully integrate into your new country.
• Cons of Renouncing: You may lose the ability to pass U.S. citizenship to your children.

For “Accidental Americans”

• Pros of Renouncing: Escape from unwanted tax and reporting duties.
• Cons of Renouncing: The process can be expensive and time-consuming, even if you never lived in the United States 🇺🇸.

For Parents with Children

• Pros of Renouncing: Avoid passing on tax and reporting burdens to your kids.
• Cons of Renouncing: Your children may lose the chance to claim U.S. citizenship.

For High-Net-Worth Individuals

• Pros of Renouncing: No more U.S. estate or gift tax worries.
• Cons of Renouncing: You may face a large exit tax when you give up citizenship.

Recommendations for Specific Circumstances

• If you plan to return to the United States 🇺🇸 someday: Keeping your citizenship is usually best, unless the tax and banking problems are overwhelming.
• If you have strong ties to your new country and no plans to return: Renouncing may make life much easier, especially if you face banking or tax troubles.
• If you are a dual national or “accidental American”: Renouncing can free you from unwanted duties, but be sure you understand the process and costs.
• If you have significant assets: Get professional advice before renouncing, as the exit tax can be steep.

Decision-Making Framework

When deciding whether to keep or renounce U.S. citizenship, consider these questions:

1. Do you plan to live in the United States 🇺🇸 again?
   • If yes, keeping citizenship is safer.
2. Are you struggling with tax or banking problems because of your U.S. citizenship?
   • If yes, renouncing may solve these issues.
3. Do you have another citizenship or can you get one?
   • If not, renouncing could leave you stateless, which is very risky.
4. Are you willing to pay the renunciation fee and possible exit tax?
   • If not, keeping citizenship may be the only choice.
5. How will this decision affect your family, especially children?
   • Think about their future rights and options.

Practical Steps and Resources

If you decide to keep your U.S. citizenship:

• Stay informed about tax and reporting rules. The IRS website has detailed guides for expats. IRS Tax Guide for U.S. Citizens Abroad
• Consider hiring a tax professional who understands both U.S. and foreign laws.
• Keep good records of your income, bank accounts, and tax filings.

If you decide to renounce:

• Check the U.S. Department of State’s official guide for renunciation procedures and appointment booking. Renunciation of U.S. Nationality
• Prepare for a long wait. Demand is high, and some embassies have backlogs of over 30,000 people.
• Gather all required documents. This includes proof of other citizenship, tax records, and personal identification.
• Consult a tax or immigration lawyer to understand your obligations and avoid surprises.

Final Thoughts

The choice between keeping or renouncing U.S. citizenship is deeply personal and depends on your life plans, finances, and family situation. For many American expats, the burden of citizenship-based taxation and banking restrictions has become too much to bear. Others value the security and rights that come with a U.S. passport.

Whatever you decide, take the time to understand the process, costs, and long-term effects. Use official resources and seek expert advice if needed. The trend of Americans giving up their citizenship is likely to keep growing unless major changes are made to U.S. tax and banking laws. For now, each expat must weigh the pros and cons and choose the path that fits their own life best.

Learn Today

Citizenship-Based Taxation → U.S. taxes citizens on worldwide income regardless of their residency or where income is earned.
FATCA → Foreign Account Tax Compliance Act requiring foreign banks to report accounts held by U.S. citizens to the IRS.
FBAR → Report of Foreign Bank and Financial Accounts, required for foreign accounts exceeding $10,000 balance.
Exit Tax → A tax imposed on certain expatriates with high net worth or income when they renounce U.S. citizenship.
Certificate of Loss of Nationality → Official document confirming a person has legally renounced U.S. citizenship.

This Article in a Nutshell

American expats struggle with citizenship-based taxation, FATCA banking hurdles, and emotional ties. They must choose to keep or formally renounce U.S. citizenship, weighing tax burdens, costs, and rights. Renouncing costs $2,350 plus possible exit taxes; keeping citizenship demands complex annual filings but retains U.S. privileges and voting rights.
— By VisaVerge.com