How do I know if I will be a covered expatriate?
By working through the tests, because covered status is determined by three of them and any one is enough. There is an income test, a net-worth test and a compliance certification, and they are independent: satisfying two comfortably does not help if the third catches you. The mistake is assuming a modest balance sheet settles the question. The certification concerns your filing history rather than your wealth, so someone well inside the financial tests can still be covered on their record alone.
Do I have to be up to date on past US returns before expatriating?
This is the test people find out about last, and it is the one with the longest lead time. The compliance certification looks back over prior years, so it is a statement about a filing history that either exists or has to be built. If years are missing, the work is filing them properly before the expatriation, not attaching an explanation to the final return. Once the expatriation has happened, the look-back period is fixed and the record is whatever it was on the day.
Does the exit tax apply if I sell nothing that year?
Yes, for a covered expatriate, and that is the feature that catches people financially rather than technically. The regime applies a mark-to-market charge, which treats assets as disposed of rather than waiting for an actual sale. So a charge can arise in a year with no transaction and no cash coming in. Anything without a quoted price — private company shares, an interest in a partnership, property — needs a defensible valuation as at the relevant day, and that evidence is easier to assemble beforehand.
Can I still plan once I have already renounced?
Much less than before, which is why the planning is done before the expatriation rather than at the final return. Before the date, the levers are real: the timing itself, the composition of the balance sheet, realising losses, and getting the filing record into the state the certification requires. Afterwards the facts are fixed and the work becomes reporting them accurately and, where years are missing, catching up. Plenty still needs doing after the event; it is simply no longer planning.
Can unfiled back years alone make me a covered expatriate?
Yes. The compliance certification stands on its own footing, alongside the income and net-worth tests, and any one of the three is sufficient. So a person whose income and assets sit well inside both financial tests can still be covered because of the state of their filings. It is worth saying plainly, because it is the test most easily fixed in advance and the one most often discovered too late. Establish what was filed, and for which years, before anything else is decided.
What should I check first before giving up US citizenship?
The filing record, then the balance sheet, then the date. The record comes first because the certification looks back over prior years and fixing gaps takes the longest. The balance sheet comes next, both for the net-worth test and because a mark-to-market charge needs values for assets that have no market price. The date comes last, once the first two are understood, since it is the variable you control. Reversing that order is how people book an appointment and then discover the problem.
Do green card holders living abroad have to file US taxes?
Yes. A lawful permanent resident is a US tax resident, taxed on worldwide income, and that status does not end simply because you moved away — it ends when it is formally abandoned or administratively terminated. Two traps follow. Filing as a non-resident on a treaty claim can put the immigration status itself at risk. And ending the status after holding it long-term can bring you inside the expatriation regime. See giving up a green card.
Am I a US tax resident if I live overseas?
If you are a US citizen or a green card holder, yes — the United States taxes on status, not location, and living abroad changes the reliefs available rather than the obligation to file. If you are neither, residence turns on the substantial presence test, a weighted day count over three years, with exceptions for certain visa categories and a closer-connection claim available in some circumstances. The two paths lead to completely different returns. See filing US taxes from abroad.
