If you’re a U.S. expat feeling overwhelmed by tax reporting rules or just ready to fully embrace life in another country, you’ve probably thought about renouncing your U.S. citizenship. It’s a major decision not just on paper, but emotionally too.
This handbook takes you through the process of relinquishing your U.S. citizenship, what it actually involves, and what to anticipate in the process. If you're in Australia, the UK, or anywhere else, it doesn't matter, process is the same and begins with verifying that you're dead certain. Here are the steps to renounce US citizenship
Step 1: Think It Through Carefully
Renunciation isn't something you simply complete on a form. It's irreversible, and it impacts your status to re-enter the U.S., your taxes, and even your retirement benefits.
Consider the following:
- Do I feel okay with having to obtain a visa in order to travel to the U.S.?
- Have I complied with all my U.S. tax requirements?
- What does this do to my children or spouse if they are still U.S. citizens?
Before you do anything official, consult with a tax advisor or expat expert. They've worked with people in your shoes and will be able to catch things you haven't thought of.
Step 2: Ensure You Have Another Citizenship
You can't give up U.S. citizenship unless you have another citizenship first. The U.S. government won't make you stateless.
Tip: Some individuals obtain the citizenship of the country they've lived in for years prior to renouncing US citizenship.
Step 3: Get Your Taxes in Order
You will have to demonstrate to the IRS that you are completely up-to-date on your U.S. taxes for the past five years prior to when you relinquish. That means:
- Annual tax returns
- FBAR reports (if your foreign accounts summed $10,000+)
- FATCA filings, if needed
You'll also submit Form 8854 to ensure you're in compliance and to see if you're a "covered expatriate." If you are, you'll be subject to an exit tax based on your wealth.
Step 4: Book a Consulate Appointment
Renouncing your citizenship isn't something that can be done online or through the mail. You'll have to visit a U.S. consulate or embassy in person. Start by emailing or calling the one closest to you and asking to schedule a renunciation appointment.
This is usually a two-trip affair: an interview to discuss how things will go, and another appointment to administer the Oath of Renunciation.
Some consulates have waiting lists that are months long, so plan ahead.
Step 5: Prepare Your Documents
To keep things moving smoothly, bring everything they’ll need, including:
- Your current U.S. passport (and any old ones)
- Your foreign passport
- Completed Form DS-4079 (this helps determine if you’re voluntarily giving up citizenship)
- Local ID or residence permit
- Payment for the $2,350 renunciation fee
Each consulate may have its own checklist, so double-check with them before your appointment.
Step 6: Go to Your Appointment and Take the Oath
During the appointment, the officer will describe the effects of abandoning, such as visa rules and loss of protections, and ensure you comprehend.
After you sign the papers and take the Oath, the embassy forwards your documents to Washington, D.C., where the State Department makes the final decision.
Note: You remain a U.S. citizen until your abandonment is officially approved.
Step 7: Wait for Your Certificate of Loss of Nationality (CLN)
This report is your formal documentation that you've renounced successfully. It typically comes in 4 to 6 months, but delays do occur.
You'll want your CLN for purposes such as demonstrating to banks or tax agencies that you're not a U.S. person anymore.
Step 8: File Your Final Tax Return
The year you renounce, you will file a dual-status return, and Form 8854 once more to tie things up for the IRS.
Depending on your financial situation, this may be easy, or it may need the assistance of a professional, particularly if you're subject to the exit tax.
Life After Renouncing
After it's all over, you're no longer an American taxpayer. That includes:
- No more IRS forms (unless you've got U.S. income)
- You'll need a visa to travel to visit family or friends in America.
- You won't vote in US elections or be eligible for most federal benefits
But to most expats, it's a trade-off they're willing to make. You have peace of mind, less bureaucracy, and an easier financial life overseas.
FAQs
How long does the entire process take?
Expect 4 to 8 months, depending on wait times at embassies and how quickly your CLN is granted.
Is the $2,350 fee universal?
Yes. It's a one-size-fits-all fee charged by the U.S. government, regardless of where you renounce.
Can I ever return to the U.S. to visit?
Yes, but you'll have to get a visa and there's a possibility it might be refused.
What will happen to my Social Security?
If you've worked long enough, you may still be able to collect, depending on where you reside.
Can I ever become a citizen of the U.S. again?
It's possible, but unlikely. You'd have to reenter through immigration like any foreign citizen.
Renouncing citizenship is not a decision to take lightly, but if you're overseas for the long haul and sick of dealing with two systems, it may be the best one. Just make sure you know what you're getting yourself into before you start.
