Leaving the Country: Far Easier Said Than Done

New York Daily News

As we close in on the end of the 2020 presidential election, it is not unusual to hear an impassioned voter claim they will “leave the U.S.” if their candidate does not win the White House. However, notwithstanding the current challenges of finding employment and relocating to a foreign country amid the restrictions related to the COVID-19 pandemic, U.S. tax rules can make leaving the United States fairly painful.

Let’s count the ways.

The United States is unique in that its citizens are subject to income tax on their worldwide income. This is true even if an individual is not living in the United States on even a single day of the year and all the individual’s income is earned from a job and other sources outside the United States.

For example, John, a U.S. citizen, who is angry with the results of the election, chooses to relocate to his favorite European country on Jan. 1, 2021, and secures full-time employment with a company in that country. John will still be subject to U.S. income tax on every dollar he earns from that foreign job. In addition, John will also likely have to pay income tax in his new country of residence.

Does this amount to double tax on John’s income? Not necessarily.

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“Leaving the Country: Far Easier Said Than Done,” by Sean R. Weissbart was published in the New York Daily News on November 1, 2020. Reprinted with permission.