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Post by luxlouise on Apr 17, 2015 12:15:46 GMT -5
Hi All,
This is a great board and shout out to Trevor and thanks to everyone that has contributed content-it has been very helpful information!
I was wondering if anyone might be able to speak to any of the implications that US citizens might want to consider before applying for citizenship? In particular I am interested in knowing more about considerations for having two nationalities, tax/property liability, voting requirements, health insurance coverage, etc.
I have heard from a friend that works abroad in the Netherlands that she still has to file taxes in both the US and the Netherlands even though she works full time in the the Netherlands and has lived there for over a year. I have also heard that unless you renounce your US citizenship that you will always be required to file US taxes regardless of whether you are living and working abroad. Any insights on where I might be able to learn more about this would be great.
Thanks
Louise
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Post by kristin on Apr 17, 2015 17:20:34 GMT -5
You have to file taxes in the U.S. no mater where you live if you are a U.S. citizen. The U.S. and Eritrea are the only two countries in the world that require that. Note I said file taxes, not pay taxes. If you live abroad, the U.S. still wants to know how much you are making and if you are making a certain amount (like $125,000 or more?) then you will have to pay a small amount of taxes to the U.S. but they also take into account the taxes you are paying to your host country. This has nothing to do with a dual citizenship, just where you are residing. My brother had to file tax returns with the U.S. even though he lived in South Korea for two years.
Luxembourg on the other hand only requires you to pay taxes if you live there.
You can google more details about the specifics with US or Luxembourg taxes.
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seblux
Junior Member
Posts: 83 
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Post by seblux on Apr 18, 2015 1:36:40 GMT -5
Also note that if you work in Luxembourg, taxes are deducted from your gross salary automatically. You can file a tax claim every year if you believe you have paid more too much tax (for instance you can deduct from your taxable income things like insurances premium, child kindergarten fees, etc)
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Post by luxlouise on Apr 18, 2015 10:22:19 GMT -5
Thanks Kristin and Seblux! This information is really helpful insights about the tax liabilities. It has been a big topic for discussion among my family as we explore the reclamation process. I started looking into some additional information and it looks like the US has 'tax treaties' with different countries for citizens working abroad that take into account, when you file US taxes, the taxes you may already be paying in the country where you are living and working. It also looks like there are some credits that would apply if one were living and working in Luxembourg "Foreign Earned Income Exclusion (IRS Form 2555 or Form 2555-EZ) and Foreign Tax Credits (IRS Form 1116). You may qualify to exclude from income up to an amount of your foreign earnings that is adjusted for inflation ($91,400 for 2009, $91,500 for 2010, $92,200 for 2011, $95,100 for 2012, $97,600 for2013, $99,200 for 2014)." I came across this tax guide online which may be helpful : www.pwc.lu/en/tax-consulting/docs/pwc-publ-lux-income-taxes-2014.pdfPlease feel free to let me know if you have other resources that I should look into. |
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Post by jhorner on May 15, 2015 14:59:20 GMT -5
Thanks, Luxlouise, this is quite helpful. Ive been concerned about potentially having Lux tax liability without actually living there, but that doesn't appear to be the case ("nationality is irrelevant" portion of the doc you posted.)
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Post by luxlouise on Jan 30, 2016 16:33:18 GMT -5
Just circling back to this thread to see if anyone has discovered any new information about this topic? Does anyone know if their might be implications for people that may own property and or have businesses in both or one location while living in the other? I have also learned that there may be challenges for US citizens who are/have worked with Top secret military/security clearances. if you are military or have any type of government security clearance it’s probably advisable that unless you really really really want a huge headache and lots of paperwork that you don’t apply. While it’s allowable for some US military members to have dual citizenship and it can be very tricky depending on the type of grade you are as well as the forms and paperwork that you have to apply for in order to make it allowable. It also would likely limit your ability to advance into higher positions that would require certain security clearances. Additionally if you wouldn’t be allowed to have dual citizenship and work on any government contracts that require a security clearance. news.clearancejobs.com/2014/11/03/dual-citizenship-foreign-passports-security-clearances/ |
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Post by luxlouise on Feb 2, 2016 0:50:14 GMT -5
Just as a disclaimer I am not trying to be negative or demotivate anyone from going through with this process. This is a wonderful opportunity and I am excited to go through the application process as I would love to become a Luxembourg citizen. I am only trying to ask the "hard" questions to have a full understanding and appreciation for the process and responsibilities of being a citizen in both countries.
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