The unexpected costs of being an American abroad
“I keep on asking myself, am I a liability for my partner if we get married? Will he have to declare his accounts to the U.S. government just for marrying an American? Will we be able to open a shared bank account in a local bank? Will we be able to purchase a home if I have to pay taxes in two countries if we sell it?”
— Laura Sanchez
By Laura Sanchez
Dear Congress,
I’m a 33-year-old dual citizen who is experiencing first-hand the taxation challenges faced by Americans living abroad. I was born in Puerto Rico, raised in Europe, and spent my adulthood in beautiful Austin, Texas. Since my teens I've always had the opportunities, mindset and empowerment that the United States provided and living in the United States was one of my biggest dreams.
Family reunification
However, in 2021, during the pandemic, I made the difficult decision to move back to Europe to be closer to my family after losing loved ones to Covid. I now live in Germany.
Little did I know that this move would limit my ability to contribute to my future in aspects like retirement, prevent me from opening high-yield savings accounts, do side-hustles or even start my own business.
Is U.S. citizenship a liability?
The complexities of taxation laws now weigh heavily on my partner and me as we plan to start a family in the next couple of years and make important life decisions, such as purchasing a home. I keep on asking myself, am I a liability for my partner if we get married? Will he have to declare his accounts to the U.S. government just for marrying an American? Will we be able to open a shared bank account in a local bank? Will we be able to purchase a home if I have to pay taxes in two countries if we sell it?
Information regarding how Americans abroad are taxed is scattered and complicated, to the extent that in conversation with some of my expat friends we often found that we truly don’t understand all the implications of the law.
From empowering to handicap
I am not wealthy. I am just a regular 33-year old with a 9-5 job. When I lived in the United States, I used to describe my experience as freeing and empowering. However, living abroad has made me afraid of making a financial mistake, or forgetting something while doing my tax declaration even though I already pay taxes in my host country.
I have always loved the way the United States enables you to grow and provides opportunities. However, in the last couple of years, I have also felt that by being an American I was at a disadvantage and was treated as second- class citizen, incurring a heavier financial and bureaucracy burden than Americans living in the United States.
That’s why I urge Congress to consider the request of Americans like me who seek to balance family ties and exploring the world with financial stability. Let’s work together to ensure that U.S. citizens abroad can live with that sense of freedom and serenity regardless of their geographic location.