The US is the only industrialized nation that taxes its citizens who live in other countries. The only other country that practices citizenship-based taxation is Eritrea. Many US citizens who live in other countries must pay income tax to the United States as well as to the countries where they reside.
More about citizenship-based taxation:
- US citizens who pay taxes to foreign governments can claim some or all of that money as tax credits or itemized deductions on their US taxes.
- Some US citizens renounce their citizenship because they want to no longer pay US income taxes.
- US citizens must report any bank accounts that contain more than $10,000 US Dollars to the federal government.