2023 Expat Trends: Decoding US Expat Life

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With an estimated 9.5 million US citizens embracing an expatriate life, the American expat community is on the rise. Regardless of their global location, these citizens maintain their voting rights and are obligated to fulfill their US Federal tax responsibilities.  

Greenback Expat Tax Services conducted a detailed survey specifically for this group better to understand the feelings of this expanding group of people. 

Unveiling the Expat Reality: Survey Methodology and Criteria 

Conducted between April 24th and May 14th, 2023, Greenback’s expat trends survey successfully tapped the perspectives of over 3,200 US expats across 122 countries. The survey encapsulated respondents from diverse income groups and professions. 

The survey concentrated on four key areas: 

• US tax filing requirements
• Foreign banking laws (FBAR and FATCA)
• Citizenship renunciation
• The overall experience of living abroad as a US citizen

Are you more of a podcast listener than a reader? Listen to our CEO, Mike Wallace, on the Meet the Expats Podcast discussing the findings of our survey, expat taxes, and his expat journey.

Snapshot of Key Findings 

Our survey unveiled a trove of insights, reflecting the complexities and considerations underpinning the expat experience. 

• Renouncing US Citizenship: An astounding 20% of US Expats surveyed are seriously considering or planning to renounce their US citizenship soon. Notably, an additional 42% wouldn’t rule out such a move in the future. 
• Government Representation: Over 80% of US expats feel their concerns are less likely to be addressed by the US government than those of Americans living stateside.  
• US Expat Taxes: Although 64% of expats are confident about meeting their US tax filing obligations, 69% don’t believe they should be required to file US taxes while living abroad.  
• Awareness of IRS Streamlined Filing Procedures: The survey found that 32% of US expats had not heard of these procedures aimed at helping expats achieve tax compliance.  
• Foreign Banking Laws (FATCA & FBAR): 10% of expats struggle to secure banking services due to FATCA requirements, and 5% were unfamiliar with FBAR reporting rules. 
• Returning to the US: Only 11% of expats abroad plan to return to the US permanently 
• COVID-19: In the aftermath of the COVID-19 pandemic, 43% of expats expect to work remotely 
  full-time or adopt a hybrid model. 

However, the notable increase in the number of US citizens renouncing their citizenship in 2023 signals that expats are grappling with unique challenges. Tax complexities, perceived governmental hostility, and political concerns are among the contributing factors. 

Growing Trend of Citizenship Renunciation 

As of May, 15th, 2023, a total of 5,315 US citizens renounced their citizenship, a significant increase from 2,390 in 2022. This trend indicates growing dissatisfaction among US expats regarding the complexity of US tax laws and the perceived hostility of the US government towards its citizens. (Source) 

The increase in the number of US citizens renouncing their citizenship is likely due to several factors, including the high cost of US citizenship, the complexity of US tax laws, and the perception that the US government is becoming increasingly hostile to its citizens.  

“Taxation without representation; no one is really representing US expat interests in Congress. I feel the tax laws are geared to catch very wealthy individuals trying to evade taxes but cause an excessive tax burden on the average US expat. Furthermore, US expats abroad are limited in their investment options with US brokerage firms (e.g., no mutual funds & US banks don’t want them as customers). We’re penalized both in the US and abroad by our US passports”. Said one of the survey respondents. 

1 in 5 American Expats (20%) is either seriously considering renouncing or planning to renounce their US citizenship in the near term. This trend saw a decrease from 2022’s survey results, which indicated that 24% were considering renunciation. Although, in 2023, an additional 42% said they would consider or not rule out renouncing their US citizenship in the future.  

Of those who said they would renounce their US citizenship, 34% said their decision was based on the complexity of filing US taxes yearly. 14% of expats are concerned about the current political climate; 13% said their interest in renunciation was based on disappointment with the direction of the American government. Another 11% say they wish to renounce because they married a non-US citizen abroad. 

Government Representation and Taxation: A Struggle for Fairness 

The notion of under-representation resonates with a large majority of expats. Over 80% feel their concerns fall on deaf ears compared to Americans living stateside. 

A striking 69% of US expats believe they shouldn’t be required to file US taxes, while only 18% think otherwise. A slim 13% are undecided on the issue. 

One of our survey respondents exclaimed, “American citizens abroad are potential ambassadors for the United States. We speak multiple languages, engage in cultural exchange, and often operate at high levels professionally to support the complexities of moving and living abroad. Instead of incentivizing Americans to be proud of their country, the land of the free, the primary interaction with the US govt is a highly negative, unfree experience; being the only non-resident citizens in the world that have to file tax returns in multiple countries.”  

Despite this sentiment, a majority (64%) feel confident about meeting their US tax obligations. The rest grapple with uncertainties, indicating the necessity for more accessible tax guidance and support for this demographic. 

IRS Streamlined Filing Procedures: An Underutilized Lifeline 

Introduced to aid expats in updating their tax status, the IRS Streamlined Filing Procedures remain underutilized. A sizeable 32% of US expats remain unaware of the program, stressing the need for enhanced outreach and education. 

FATCA & FBAR: Impact on Expats 

The stringent tax regulations imposed by FATCA and FBAR pose significant hurdles for US expats. As a result, 10% of expats struggle to secure banking services abroad due to the demanding requirements. 

The Road Ahead 

As our survey demonstrates, the journey for American expats is fraught with regulatory and financial challenges. From contemplating citizenship renunciation to tackling complicated tax obligations, these citizens navigate a dynamic and complex landscape. 

Policymakers must heed this call for change, ensuring that US expats’ unique needs and circumstances are adequately addressed. It’s high time for a revamp of the regulatory framework, which is more in tune with the realities faced by the global American community. 

For general questions on expat taxes or working with Greenback, contact our Customer Champions.

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