US Citizenship Exit Tax Calculator
Based on US tax rules, if you're a "covered expatriate" when renouncing citizenship, you owe exit tax on your worldwide assets as if they were sold the day before renouncing. This calculator helps you estimate your potential liability.
More Americans are walking away from US citizenship-not for political reasons, not for family ties, but because of cryptocurrency taxes. If you own Bitcoin, Ethereum, or other digital assets that have grown in value over the years, the US tax system can feel like a trap. The IRS treats crypto like property, meaning every trade, sale, or even spending your Bitcoin on coffee triggers a taxable event. For someone with a $5 million crypto portfolio, that could mean hundreds of thousands in taxes every year-even if you live in Portugal, Singapore, or Georgia. So some people choose to leave. Not just move. Renounce.
Why the US Tax System Pushes People Away
The United States is one of only two countries in the world that taxes its citizens on worldwide income, no matter where they live. Most countries tax based on residency. If you move to Switzerland and never set foot in the US again, Switzerland taxes your income. The US doesn’t care where you live. It still wants its cut. And with crypto, that’s brutal. Imagine you bought 100 Bitcoin in 2017 for $1,000 each. Today, they’re worth $6 million. You never sold them. You never touched them. You live in Malta. But the IRS says: “You owe capital gains tax on $5.99 million.” That’s over $1.4 million in federal taxes alone-plus state taxes if you lived in California or New York. No one can pay that out of pocket. And you can’t just ignore it. The IRS knows. Banks report. Exchanges report. Your wallet addresses are traceable.What Happens When You Renounce
Renouncing US citizenship isn’t a paperwork form you fill out online. You have to schedule an appointment at a US embassy or consulate abroad. You show up in person. You sign documents. You swear an oath. And then, poof-your American passport is no longer valid. You can’t vote. You can’t get a US passport again. You can’t return to live in the US without a visa. There’s also a $2,350 fee just to start the process. But that’s the smallest part of the cost. The real price comes from the exit tax.The Exit Tax: The Hidden Cost of Leaving
The US doesn’t let you walk away without checking your balance sheet. If you’re a “covered expatriate,” you owe taxes as if you sold everything the day before you renounced. That includes crypto, real estate, stocks, even your art collection. To be a covered expatriate, you must meet at least one of these three criteria:- Your net worth is over $2 million on the day you renounce
- Your average annual US income tax over the last five years was more than $206,000 (adjusted for inflation in 2025)
- You didn’t file your tax returns for the past five years
How People Avoid the Exit Tax
You can’t dodge the exit tax by pretending you’re poor. But you can plan around it. The smartest people don’t wait until the last minute. They start two years ahead. One common move: gift assets to family members. If you give away $1 million in Bitcoin to your kids in the year before renouncing, that $1 million is no longer in your name. It doesn’t count toward your net worth for the exit tax. But here’s the catch: you can’t keep control. You can’t say, “I’m gifting it, but I still decide when to sell.” That’s called a “retained interest,” and the IRS will still count it. Another tactic: wait for a year when your income is low. If your crypto gains were huge in 2021 and 2022 but you’ve been working a normal job since 2023, your five-year average tax liability might drop below $206,000. That knocks you out of covered expatriate status-even if you’re still worth $5 million. Some people use trusts. Others sell assets slowly over time to spread out the tax hit. But all of it requires a team: a tax attorney, a CPA who understands international tax law, and a financial planner who’s handled at least a dozen expatriations.Where People Go After Renouncing
You can’t renounce and become stateless. The US won’t let you. So you need a second passport. That’s where citizenship-by-investment programs come in. Malta is popular. You invest €600,000 in real estate and government bonds, live there for a year, and get EU citizenship. Portugal’s Golden Visa lets you invest €250,000 in real estate or €500,000 in funds. Georgia offers a simple residence permit for $1,000 a year, and no taxes on foreign income. Singapore doesn’t tax crypto capital gains at all. Germany treats crypto as private money after one year of holding-no tax if you hold longer than 12 months. People who renounce often end up in places like these. They’re not trying to hide. They’re just choosing a system that doesn’t tax them on assets they never cashed out.What You Still Owe After Renouncing
Even after you renounce, the US doesn’t always let go. If you still own property in the US, rent it out, or hold US stocks that pay dividends, the IRS still takes a cut. You’ll pay 30% withholding tax on rental income unless you file a tax return and claim a lower rate under a tax treaty. If you inherit money from a US-based estate, that’s taxable. If you sell a US property after renouncing, capital gains on the portion of the gain that happened while you were still a citizen are still subject to US tax. And if you don’t file Form 8854-the official expatriation statement-you’re still considered a US taxpayer. The IRS doesn’t just forget you. They keep chasing you. Penalties can be $10,000 or more. And if you ever try to re-enter the US as a tourist, border agents can flag you as a “former citizen who didn’t comply.”
Is It Worth It?
For someone with $2 million in crypto and no other income, renouncing might save $500,000 a year in taxes. But it costs more than money. You lose the right to live in the US. You can’t get federal jobs. Your kids won’t automatically be US citizens. You can’t vote. You can’t get help from a US embassy if you’re arrested abroad. And it’s permanent. No one gets their citizenship back. Not even if you change your mind. Most people who do this are ultra-high-net-worth individuals. People who made their money in crypto early and now want to keep it. They’re not trying to cheat the system. They’re trying to survive it.The Bigger Picture
This trend isn’t going away. As crypto prices rise, more people will feel the pressure. The IRS is getting better at tracking crypto. More exchanges are reporting to them. The IRS has hired hundreds of crypto specialists. They’re watching. Meanwhile, countries like Singapore and Switzerland are actively courting crypto wealth. They offer stable regulations, low taxes, and banking access. The US? It’s still treating Bitcoin like a tax trap. Some experts think the US will eventually switch to residency-based taxation. But as of 2025, that’s still just talk. No bill has passed. No committee has moved on it. So for now, renouncing remains a legal, expensive, and irreversible path for those who see no other way out.What You Should Do Before You Consider Renouncing
If you’re thinking about this, here’s what to do next:- Calculate your net worth-including crypto, real estate, investments, and liabilities
- Review your tax returns for the past five years. What was your average annual tax liability?
- Consult a cross-border tax specialist who’s handled at least five expatriations
- Get a second passport or residency before you renounce
- Plan your asset transfers at least 12-18 months in advance
- File Form 8854 correctly. No exceptions.
Can I keep my US bank account after renouncing citizenship?
Yes, you can keep your US bank account, but many banks will close it anyway. They’re afraid of compliance risk. If you do keep it, you’ll still pay 30% withholding tax on interest and dividends. You’ll also need to file a W-8BEN form to claim treaty benefits if applicable. Some banks require you to move your account to a branch in your new country of residence.
What happens to my Social Security benefits if I renounce?
You keep your Social Security benefits. The US pays them to former citizens living abroad. But the IRS will tax up to 85% of your benefits if your total income exceeds certain thresholds. You’ll still need to file a US tax return every year to report them. Some countries have tax treaties that reduce or eliminate this tax, but the US doesn’t always honor them for former citizens.
Can I get my US citizenship back after renouncing?
No. Once you renounce, it’s final. There’s no appeal, no reversal, no exceptions. Even if you later regret it, you can’t get your citizenship back unless you go through the full naturalization process as a foreign national-which can take years and requires living in the US for five years on a green card. The government won’t give you special treatment.
Do I still owe taxes on crypto I mined before renouncing?
Yes. Any crypto you mined while a US citizen is considered taxable income at its fair market value on the day you received it. If you didn’t report it, you’re already behind. The exit tax will include the value of that crypto as part of your net worth. You must file back taxes for the past five years before renouncing. Otherwise, you’ll be classified as a covered expatriate automatically.
Can I travel to the US after renouncing?
Yes, but only as a tourist or visa holder. You’ll need a valid passport from your new country and a visa (like a B-2 tourist visa) to enter. Border agents can ask why you renounced. If they suspect you’re trying to avoid taxes or live in the US illegally, they can deny entry. You can’t use your old US passport-it’s invalid after renunciation.