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Renouncing US Citizenship: The New Expat Trend?
+ Dollar weakens in 2025
Mike Berner
September 30, 2025
THIS WEEK ABROAD
Thinking about cutting ties with the U.S.? You’re not alone — record numbers of expats are considering it. Add in California’s tax traps and the dollar’s recent slump, and life abroad feels more complicated than ever (that is, if you aren’t a reader of Americans Abroad!)
Let’s dive in 👇
Money & Tax Corner
🛂 WOULD YOU RENOUNCE U.S. CITIZENSHIP?
Here’s a question you might have asked yourself: would you ever give up your U.S. passport?
A new survey from Greenback Expat Taxes shows that nearly half of U.S. expats are considering renouncing U.S. citizenship — a huge jump from the 30% who were thinking about it in 2024.
Last year, over 4,000 Americans actually pulled the trigger and gave up their passports. While that sounds like s small number, it represents a massive increase from the 300-400 Americans who renounced citizenship 15 years ago.
What’s driving the trend
According to the survey, the biggest reason by far that U.S. citizens want to turn in their passports is taxes. Of the 49% of American expats who are thinking about renouncing citizenship, 61% cite the burden of managing or filing U.S. taxes as a major reason.
Another major reason why American expats want to turn in their passport is difficulty dealing with foreign banks due to American citizenship; 41% of those surveyed cited banking woes as a major factor.
FYI: Read more about how Swiss banks with U.S. branches can help solve your banking problems.
What happens when you renounce citizenship
enouncing citizenship can free you from certain obligations, but it also comes with serious financial, legal, and social consequences. Here are the key points you need to know:
Exit tax
If you’re a “covered expatriate” — meaning your net worth is $2M+, your five-year average tax bill is above $201,000 (2024), or you haven’t met past tax obligations — you may face an exit tax.
The IRS treats your assets as if you sold them the day before renouncing.
The first $821,000 in gains (2024) is exempt. Anything above that is taxed at capital gains rates.
Retirement & benefits
Social Security: You may still qualify, but payments depend on agreements between the U.S. and your new country.
Medicare: Generally not available outside the U.S.
Retirement accounts (401k, IRA, etc.): Withdrawals after renouncing may face higher taxes and withholding.
Legal & social consequences
You’ll lose all U.S. rights: voting, embassy protections, and access to a U.S. passport.
Re-entry isn’t guaranteed: As a foreign national, you’ll need a visa or ESTA — and entry can be denied for legal, tax, or security reasons.
Bottom line: Renouncing U.S. citizenship is a major decision. While it may make sense for some expats, consider the consequences before you hand in your passport.
Video of the Week
🎥HOW TO LEAVE CALIFORNIA TAX RESIDENCY
Terminating California residency is notoriously difficult, especially for US expats and remote workers moving abroad or to another state. The state government in Sacramento is notorious for pursuing ex-residents for taxes.
Before you leave California, you must cut all ties. Among other steps, you must sell or rent out your house, close local bank accounts, and notify your employer. Also, you can obtain your driver’s license and residential address in another US state, ideally a low-tax state such as Florida.
Watch our new video guide to learn the ins and outs, or read the full article on Savvy Nomad’s site.
Must-Know News
📉DOLLAR WEAKNESS PUSHES UP AMERICAN TRAVEL COSTS
After a strong run in 2022–2023, the U.S. dollar has been sliding in 2025, losing more than 10% against a basket of global currencies earlier this year.
For U.S. travelers, that means higher prices abroad. A hotel room in Europe has become noticeably more expensive when converted from dollars to the local currency.
The (sorta) good news is that the dollar recently bounced back slightly on upbeat U.S. economic data, and analysts say the outlook for late-2025 remains uncertain. Until then, smart travelers are hedging by pre-paying for flights or accommodations in dollars. A few destinations where the local currency is weaker (Argentina, Japan, Indonesia) also look like relative bargains.
Bottom line: the dollar’s dip makes overseas adventures pricier, but with a little planning, you can still make your travel budget go further.
