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To NOT want my children to get US passports?

(139 Posts)
Daffodilly Sat 16-Feb-13 20:45:25

DH is American (by birth) but also has British citizenship. We met, live and had our children in UK. No current plans to move to US.

Children are entitled to get US passports as well as UK ones. But my understanding is that at same time they are issued with a social security number too and being US citizens has implications for future tax situation. US citizens are taxed on worldwide income, regardless of where they live.

I feel this could be a huge burden to place on our children when they may never choose to live or work in US. DH places significant value on US citizenship for them.

"Taxpayers with an AGI (Adjusted Gross Income) of $57,000 or less can electronically file their tax return for free using freefile. Taxpayers with an AGI greater than $57,000 can either use the Free File Fillable Forms or efile by purchasing commercial software. A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best for you, get help choosing a software provider."


"U.S. Embassy
24/31 Grosvenor Square
London W1A 1 AE

Walk-In Assistance:
Tu-Th: 9 a.m. to 1 p.m. & 2 p.m. to 4 p.m.
Phone Service:
M-F: 9 a.m. to 12 p.m.
Tel: +44-207-894-0476
Fax: +44-207-495-4224"

from same page

Also you may be able to exclude $95K of your foreign earned income if you meet certain conditions -- e.g. you live the vast bulk of your time in a foreign country.

Knowsabitabouteducation Tue 19-Feb-13 16:20:55

You can't e-file with TurboTax. I think the sting is taking FEIE.

That's unless things have changed this year.

I don't think not being able to e-file is a show-stopper though.

lljkk Tue 19-Feb-13 14:54:08

Are you sure, Knowsit? Because FreeFile looks okay, I think that counts as e-filing; 2012/3 forms including 2555 here.

Thanks for the tip about CG counting as annual income, btw, I could never decipher whether that was the case or not (I've filed returns both ways in past).

Acinonyx Tue 19-Feb-13 14:40:12

You MUST use your US passport to enter the US. Both dh dd do this. Dh once tried to use hi UK passport because he forgot his US one. At immigration, they saw he was born in the US. To make it worse, it was clear dh was trying to hide the fact that he was in fact a US citizen hmm not dh's finest hour. He was taken for questioning and strictly speaking, could have been deported on the next plane back. he got a stiff warning, and I had to hang around with dd for hours not knowing what on earth was going on.

So definitely you must enter on your US passport. We won't try that again anytime soon.

claudedebussy Tue 19-Feb-13 13:36:29

i would not go there on a different passport if you have a us passport.

sorry, i meant, do not go there on a different passport if they've decided you are a US citizen.

note: you may not have any say in this.

claudedebussy Tue 19-Feb-13 13:35:10

dabdab, good question.

extra revenue from having to have a us passport, and then you get embroiled in the tax situation. win-win for them.

claudedebussy Tue 19-Feb-13 13:34:14

they threatened to arrest my dh. he basically got out of it by saying that he's travelled there hundreds of times before, and does he (the immigration guy) really want to be the first to cause a stink? but he won't go there again.

also, born in the us, no us passport, no social security number.

i would not go there on a different passport if you have a us passport.

dabdab Tue 19-Feb-13 13:30:59

But why is it illegal for US citizens to enter on an alternative passport if they are dual? My dc are dual, and we are travelling to US this summer - I was wondering about not renewing and just having them travel on UK passports because I would like to avoid the expense and the pain in the bum hours of waiting at Embassy for all 3 dc to get renewed
What will happen if we did travel on UK passports?

notMrsRobinson Tue 19-Feb-13 13:30:41

Thanks all. What a wealth of knowledge on MN! I'm going to speak to one of DH's partners who is also from the USA and ask him what he does, it seems that he's been diligently filing ever since he moved here many many years ago-- but that's because he intends to return one day, whereas I don't. However I don't want to burn any bridges. In the meantime I'm off to investigate how to get my hands on the tax forms, and talk to our company accountant about what I need to declare.

And Knowsabit I've just downloaded the application for DD, seems straightforward. We'll have a (hopefully) nice mother-and-daughter session going down to the Embassy for an appointment. And just in time as she's 18 in a few months, she can decide what she does after that!

Knowsabitabouteducation Tue 19-Feb-13 13:18:48

You can't efile from overseas, ll.

You have to print out your return, sign it, and take it to the post office.

lljkk Tue 19-Feb-13 13:16:40

CAB can't help you.
There are some helpful ex-pat forums.

This is what i think is true (am not expert):

Don't panic. ExPats fail-to-file tax returns a lot, It's very common.

I wouldn't bother with that form.

Get hold of the right forms for the right tax year (I guess you owe for 2012?) and file them soon. Your return isn't due until June 2013 and you can even request a deadline extension until September, I think. If your income in 2011 was over threshold you'll just have to file late taxes for that year too and any previous when you made lots of money; there will be some late penalties paying tax owed but not outrageous.

If you never owed taxes in previous years you don't have to worry about failing to pay tax installments last year; but you will have to worry about paying tax instalments for 2013 if you'll continue to have income over the threshold (because you were liable for tax last year, iyswim). That part I find tricky!

I would probably try the stupid Turbotax thing just because of the convenience of e-filing. I've had hmm experiences of bad advice from accountants so I would shy away from hiring one of them unless you think your situation is enormously complicated; I reckon I will pay less in penalties than I would to an accountant, and the accountant is never liable for any mistakes on your return, anyway. Technically you could sue accountant, but probably not worth it.

Your DS19 almost certainly does not have to file because he wouldn't owe anything, either (read upthread for details).

By the time you work thru allowances & deductions you may not owe for 2012, either. BUT if you can establish that now, then you will be in a good position whenever a year crops up that you do owe taxes, because you'll have paperwork to show you've been open & honest about previous income.

megandraper Tue 19-Feb-13 13:16:22

Don't forget that any tax-free savings you have in the UK (ISA's / Premium Bonds etc.) or tax-free benefits (child benefit etc.) are not tax-free from a US perspective, and need to be declared.

notMrsRobinson Tue 19-Feb-13 13:15:35

Many thanks Knowsabit, I guess they have an obligation to be reasonable! I suppose it cannot hurt to contact them as it's not like we've deliberately misled them and it seems like there are plenty of others in this situation. It's just the way the forms are written that makes me so nervous! I never minded doing returns when I was living there but that's because I usually got a refund.

Knowsabitabouteducation Tue 19-Feb-13 13:06:36

Unless you want to move to the US within 3 years, don't worry about back taxes. Just start to get your affairs in order.

You basically need to keep calendar year records of your income, and then do a 1040 before June 15th next year. It's pretty easy if your finances are simple.

As for your 17 year old, you have a short time to get her Consular Report of Birth Abroad, which will establish her US citizenship.

If she decides at a later date that she wants to study or settle in the US, she will have her paperwork cut out (and expenses), whereas it is very easy to do it now while she is still under 18.

notMrsRobinson Tue 19-Feb-13 13:01:56

aaarg. should have been this

notMrsRobinson Tue 19-Feb-13 12:59:04

Oh no, I can feel my life imploding having (skim) read this thread... I am from the USA and haven't filed a return since we moved here 18 years ago. Last year due to being a director of OH's company I earned over the threshold, first time ever. Can anyone help me and tell me who I need to 'fess up to? The Embassy scares the life out of me. BTW I gained British citizenship a few years ago but haven't got a UK passport yet. I am cursing my laziness but hoping I can use 'I was just a housewife' and 'no one told me I had to' to excuse all those years of non communication.

BTW I had no idea re: the citizenship, I have one child born in the US and one in UK, I'd assumed that the UK born one's entitlement to US had expired as she's 17 and we are not really bothered about it, no desire to live/work there... and DS aged 19 needs to know that he should be filing! he won't thank me for that I suppose. I need to sort this out but don't want to spend £££ doing it... is the UK Citizen's Advice a good place to start or will they just send me to the embassy? [[] this] was the form I found via the embassy website and I cannot make heads or tails of it... professional advice will be needed I suppose. Just furious that it will cost me money for no point whatsoever.

Can we all claim political asylum grin if they demand unreasonable amounts of money?

Sorry OP haven't carefully read the whole thread (as I've been to busy having a minor heart attack imagining what sort of prison they'll put me in) what have you decided to do?

lljkk Tue 19-Feb-13 12:57:22

having a US parent is enough to confer US citizenship

not always, the rules are complicated.
I haven't heard of anyone actually being turned back for travelling on their non-US passport, but I have heard of a great many wink-wink-nudge-nudge heavy hints dropped liked bombs about "That child should have a US passport" from the Border Agency people. They are still human beings and appreciate children can't fix the situation there and then, so they can't say something overt. At least one friend had no idea what they were on about, though until I explained.

Some of this talk about filing taxes is scare-mongering. Uk is moving hard towards universal self-assessment too, anyway.

My dad always files his own taxes, he got audited by the IRS and WON. smile.

juneau Tue 19-Feb-13 12:11:11

AFAIK it is illegal for a US citizen (and having a US parent is enough to confer US citizenship), to enter the US on a foreign passport. I'm assuming that your US DH has family there and will therefore wish to visit them with the DC at some point? If so, you should check very rigorously before you book your travel that you will not be breaking the law/risk being turned back at the border for having the wrong travel documents.

I know this because my DH is American and we faced a similar, though not identical, situation.

dreamingbohemian Tue 19-Feb-13 12:05:17

Yes, but if you were an Emirati, your logic would be that individuals shouldn't have to pay income taxes at all. My point is just that all tax laws and all attitudes toward taxes are relative, there is no one 'right' way to do it.

Saski Tue 19-Feb-13 11:56:14

I'm not sure I agree with your logic. My logic is that you should pay taxes in your country of residence.

dreamingbohemian Tue 19-Feb-13 11:42:20

Why should Brits pay income tax when people in Dubai pay no income tax at all?

yes it sucks but, again, that's life

It's not the US government's fault that you have chosen not to make use of the benefits of US citizenship.

Btw no one has mentioned yet one of the biggest benefits -- you can vote in US elections. Given some of the utter lunatics who run for office in the US, that's no small thing.

Saski Tue 19-Feb-13 11:19:43

Actually, the US government is becoming very unreasonable. There's no other country that taxes world-wide income. Why should US citizens living outside of the US pay US taxes, when they already pay taxes in their country of residence?

dreamingbohemian Tue 19-Feb-13 11:14:00

Oh my god, they can find your children! And...and... make them fill out paperwork! And if they're very rich, they might have to pay a little money under completely legal and transparent regulations!

I mean, come on now. I get it, taxes suck, nobody wants to pay taxes. But that's life. If you want to be all Gerard Depardieu about it, go ahead, but realistically your children will be minimally affected.

Saski Tue 19-Feb-13 10:52:06

If the US government can find a US citizen's bank account opened with a non-US passport, they can find their children.

The non-earning children of taxpayers coming under scrutiny since the US has gone bonkers are not old enough for us to know how the IRS will treat them.

It all could turn out to be paranoia. Then again, it might not.

HitWithTheYankStick Tue 19-Feb-13 10:32:11

I think people who are worried about their children already being 'burdened' with US citizenship if they have never gone to the embassy and got that Consular Report thingy, got passports, got SS numbers, are probably overthinking things.

I mean not even they can't FORCE you to take up a citizenship against your will.

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