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 doesnât care where you live. It still wants its cut. And with crypto, thatâs brutal. Imagine you bought 100 Bitcoin in 2017 for $1,000 each. Today, theyâre worth $6 million. You never sold them. You never touched them. You live in Malta. But the IRS says: âYou owe capital gains tax on $5.99 million.â Thatâs 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 canât just ignore it. The IRS knows. Banks report. Exchanges report. Your wallet addresses are traceable.What Happens When You Renounce
Renouncing US citizenship isnât 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 And then, poof-your American passport is no longer valid.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 canât vote. You canât get a US passport again. You canât return to live in the US without a visa. Thereâs also a $2,350 fee just to start the process. But thatâs the smallest part of the cost. The real price comes from the exit tax.The Exit Tax: The Hidden Cost of Leaving
The US doesnât let you walk away without checking your balance sheet. If youâre a âcovered expatriate,â 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 didnât file your tax returns for the past five years
How People Avoid the Exit Tax
You canât dodge the exit tax by pretending youâre poor. But you can plan around it. The smartest people donât 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 doesnât count toward your net worth for the exit tax. But hereâs the catch: you canât keep control. You canât say, âIâm gifting it, but I still decide when to sell.â Thatâs called a âretained interest,â 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 youâve 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 youâre 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 whoâs handled at least a dozen expatriations.Where People Go After Renouncing
You canât renounce and become stateless. The US wonât let you. So you need a second passport. Thatâs where citizenship-by-investment programs come in. Malta is popular. You invest âŹ600,000 in real estate and government bonds, live there for a year, and get EU citizenship. Portugalâs Golden Visa lets you invest âŹ250,000 in real estate or âŹ500,000 in funds. Georgia offers a simple residence permit for $1,000 a year, and no taxes on foreign income. Singapore doesnât 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. Theyâre not trying to hide. Theyâre just choosing a system that doesnât tax them on assets they never cashed out.What You Still Owe After Renouncing
Even after you renounce, the US doesnât 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. Youâll 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, thatâs 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 donât file Form 8854-the official expatriation statement-youâre still considered a US taxpayer. The IRS doesnât 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 âformer citizen who didnât comply.â
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 canât get federal jobs. Your kids wonât automatically be US citizens. You canât vote. You canât get help from a US embassy if youâre arrested abroad. And itâs 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. Theyâre not trying to cheat the system. Theyâre trying to survive it.The Bigger Picture
This trend isnât 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. Theyâre watching. Meanwhile, countries like Singapore and Switzerland are actively courting crypto wealth. They offer stable regulations, low taxes, and banking access. The US? Itâs still treating Bitcoin like a tax trap. Some experts think the US will eventually switch to residency-based taxation. But as of 2025, thatâs 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 youâre thinking about this, hereâs 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 whoâs 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. Theyâre afraid of compliance risk. If you do keep it, youâll still pay 30% withholding tax on interest and dividends. Youâll 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. Youâll 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 doesnât always honor them for former citizens.
Can I get my US citizenship back after renouncing?
No. Once you renounce, itâs final. Thereâs no appeal, no reversal, no exceptions. Even if you later regret it, you canât 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 wonât 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 didnât report it, youâre 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, youâll be classified as a covered expatriate automatically.
Can I travel to the US after renouncing?
Yes, but only as a tourist or visa holder. Youâll 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 youâre trying to avoid taxes or live in the US illegally, they can deny entry. You canât use your old US passport-itâs invalid after renunciation.
The IRS treating crypto as property is archaic. It's like taxing oxygen because you breathe it. This isn't taxation-it's extortion dressed in legalese.
bro i just bought a pizza with btc last week and got a 1099 in the mail đ i didn't even cash out, just ate it. now i owe $87 in taxes on pepperoni. america is a glitch in the matrix.
They're not renouncing for taxes-they're renouncing because the IRS is building a digital surveillance state. Every wallet address tracked, every transaction logged. This isn't fiscal policy. It's authoritarian control under the guise of compliance.
you think its bad wait till they start taxing your thoughts next i swear to god they already have the algorithm trained on your reddit history just to see if you own crypto
It's fascinating how economic systems evolve to prioritize control over freedom. The U.S. tax code on crypto feels less like policy and more like a relic of an industrial-era mindset trying to govern a digital-age reality.
I understand the financial calculus behind renunciation, but the emotional toll of severing ties to oneâs homeland-especially for those who grew up with the American ideal-cannot be overstated. This is not merely a tax decision; it is a profound personal sacrifice.
While the exit tax is draconian, it's worth noting that many of those who renounce still benefit from U.S.-based infrastructure-global financial systems, technological innovation, legal precedents-that were built by the very system they now reject. Thereâs a paradox here: you can leave the country, but you canât leave the ecosystem that made your wealth possible.
people are just mad they cant keep all their money and the government is just being fair you think you deserve to be rich and not pay for the roads and schools that made it possible
If youâre worth $2M+ in crypto and havenât filed Form 8854, youâre already in trouble. Stop scrolling and hire a cross-border CPA yesterday. The exit tax isnât optional-itâs mandatory if youâre covered. And yes, they audit you even after you leave. Iâve handled 17 cases. This isnât theory. Itâs real life.
Before you even think about renouncing, ask yourself: Is this about tax efficiency-or is it about escaping responsibility? Thereâs nothing wrong with seeking better systems, but donât pretend youâre a victim when youâve had access to the most powerful economy on earth.
What if the real question isnât whether to leave-but whether the U.S. should change? A nation that taxes its citizens abroad while other nations innovate around digital assets is choosing obsolescence over evolution. Maybe the exodus isnât a failure of individuals-itâs a warning to the state.
So you made money in America then run to Portugal like a coward? You think youâre clever? We built this system for you to succeed, and now you want to spit on it? Stay and pay your damn taxes or shut up.
Itâs okay to want peace. Not everyone wants to fight the system. If youâve worked hard and just want to live without being taxed on phantom gains, thatâs not greed-itâs sanity.
I wonder if the people who leave feel lonely sometimes. Not just legally, but emotionally. You give up your identity for money. What does that say about what we value?
the IRS is working with the fed to track your crypto wallet through your smart fridge and your tesla đ they already know you bought that dogecoin in 2021 and theyâre coming for your toaster next
lol the IRS has more crypto than you do they just dont want you to know it
Renouncing is the ultimate flex. Youâre not just wealthy-youâre above the system. Most people canât even comprehend the level of capital required to make this move. Itâs not a tax strategy. Itâs a status symbol.
Of course you renounced. Youâre not a patriot-youâre a capitalist who got greedy and now wants to escape accountability. The rest of us pay our taxes. You? You just bought a villa in Bali with your ill-gotten gains.