When you leave the U.S. to live in another country, you essentially have two choices from a tax perspective, both of which can cost you a pretty penny.
First, you can simply leave the country and take up residence elsewhere. But if you choose this option, beware: the United States continues to tax you on your worldwide income, no matter where you earn or derive it from.
Second, you can formally renounce your American citizenship or long-term residency and expatriate. This option is also not without its potential financial pitfalls, because the United States may impose an “exit tax” on you before you leave.
The rules behind this exit tax are complex, but whether you will be required to pay it depends largely on whether you are classified for tax purposes as a “covered expatriate.” ... Log in to view full article.