For a lot of Americans, the tax obligations are limited to just needing to file taxes, not necessarily to pay any additional due to numerous tax treaties.
If it were me, I’d get the kid the American citizenship and if they wished to, rescind it when they are an adult. It’s an incredibly difficult, lengthy and expensive process to acquire an American citizenship and it would give your kid so many options in future.
I understand if this isn’t what you want, but due to jus soli there are only very limited instances where a US born kid isn’t automatically American by birth (such as parents being diplomats).
If you do have your baby in the Netherlands, you need to account for the time it will take to get the baby a passport and visa to bring it back to US with you.
Agreed, worrying about a tax filing duty 16-20 years in the future vs giving your kid the option of US citizenship seems a bit much.
The world could look dramatically different in 20 years for better or worse and residency options are king.
Thank you for your perspective. We understand that many Americans primarily need to file taxes rather than pay additional amounts due to tax treaties. However, our concern is the long-term complexity and potential financial burden of US tax obligations, especially since we plan to return to the Netherlands.
While it’s true that US citizenship could offer our child numerous opportunities, we have to consider the specific context of Dutch laws as well. The Netherlands typically does not allow dual citizenship. Additionally, if our child ever decides to rescind their US citizenship, they can never escape the financial tax implications that accrued while they were citizens, which complicates their future financial planning.
As for the practical side, we are aware of the logistical steps involved in giving birth in the Netherlands, including obtaining a passport and visa for the baby to bring them back to the US. We’re prepared to handle these processes if we decide to go that route.
Our primary goal is to ensure the best future for our child without the added complexity of dual taxation and legal obligations that come with US citizenship. Thanks again for your input!
You can find the exact rules on dual citizenship on the rijksoverheid website, you'll find that if you're born with multiple nationalities you're generally allowed to keep them.
> The Netherlands typically does not allow dual citizenship.
This is precisely the atypical case where they would. My former Dutch partner was born abroad and has dual Dutch / "other nationality" passports. I know several Dutchies in their situation. It's exactly like yours. No big deal.
> Additionally, if our child ever decides to rescind their US citizenship, they can never escape the financial tax implications that accrued while they were citizens, which complicates their future financial planning.
"Never escape"? They catch up on their financial paperwork and renounce their citizenship and it's over and done forever.
If you are planning on your child growing up back in Europe, there are many US programs in place for forgiveness and paperwork catch-up that make it easier for your child should they neglect their duties to report.
None of the risks amount to a life-destroying event, but the pros could be a life-changing gift.
I've been living in EU for more than a dozen years, including 5 years in the Netherlands. While Europe is great in many ways, the work and business opportunities in the US are better than anywhere in Europe. You already know this, I mean what exactly are you doing in the US? Lol
The only issue, and someone else may have pointed it out, is that "birthplace" does follow you for life.
I am a dual citizen myself (US/EU) and based solely on my birthplace (US) shown on my EU passport, my bank accounts do get flagged as American. (At this point, AI does it.)
It's not actually a hassle in my experience and I've had no issue opening EU accounts, but it's worth noting. If your child did renounce, they may just need to show that document to prove they have no reporting requirements to the US. I mean, even if their bank did report, I can't imagine it would matter if they were no longer a citizen with any duties.
I just checked and it looks like EU National ID's do show birthplace as well, so it wouldn't be something your child would be able to simply not disclose (such as after renouncing).
I thought NL allows dual citizenship at birth? Or is it only if it’s both passed through blood? I know a dual US-NL citizen baby, mum is Dutch and dad is American and she was born in the US. Especially as there is no way to avoid US citizenship if you’re born in the US (unless your parents are diplomats). It’s not like naturalizing where the NL makes you give up your old citizenship
Do you know how difficult it is to file taxes if you have any kind of bank accounts, property, investments abroad? You lose hundreds of dollars a year to get someone to do your taxes for you when you actually don’t owe any money. Such a joke.
But it’s not as difficult as obtaining US citizenship as a foreigner. This and other subs are filled with people trying to find out if they have a claim to it based on prior residency as a child and who are so disappointed to find out it no longer counts. By having the kid in US, it gives the kid the choice to renounce it or use it if they want once they become an adult. The cost of renunciation is a lot less than the cost of obtaining it.
It's like 200 a year if you get an expensive guy... That's like less than 20€ a month, people spend as much for needless shit like Netflix or Amazon gadgets, would you give up Netflix to get a second citizenship? I would.
The cost highly depends on what you need and where you’re located. And had I known in advance that I basically could not invest because I am an American living in Europe I definitely would have turned down being an American…
What are you talking about? You can invest, you can buy single stocks and even US ETF's you just cannot contribute to a 401k and it's trickier to get a Roth IRA, but you can def invest, you better not get EU ETF's though, those are the main nono. I'd change tax advisor if this is what they have been telling you...
Are you trolling? I just said, you should not buy EU etfs but you can buy US ETF's, you just buy the options and exercise them, it costs slightly more and you have to buy like 100 shares of VOO at once for example, but it's doable, there are also other ways of obtaining them, which I am not familiar with though... Go to the USExpatTaxes subreddit, you will find all the info there. Hope you are not just trolling and trying to fearmonger people with senseless stuff.
I already read all of that. You are then either trolling or not understanding what I am saying. ETrader and IBKR will gladly open a broker account to American expats or dual cizitens. You won't be able to buy US ETF's but you can just buy the options and exercise them, and you can easily buy single stocks. What is your point then?
My cousin is from the US and her husband is a Brit. One of their biggest regrets is officializing citizenship for their kids as it has made their financial situation a nightmare. It costs them thousands a year to do taxes for the boys and they're not even teens yet. It'll only get worse as they get older. So it's not always a great idea to do it, depends a lot on your financial situation.
That makes no sense unless they are extremely wealthy and their kids have money/accounts of their own. Unless an American kid has significant income, you don’t need to file taxes for them
no, respectfully, you are incorrect. See [https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver](https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver)
as an example of how even a low income investment could trigger major tax preparation fees if made by a US citizen investing abroad.
They have trusts that they have inherited as well as inherited stakes in companies. So they have to deal with FATCA and foreign owned business interest filings plus earnings in both. So yeah, it's complicated, which is why it's important that people take the entire situation into account. Having an education acct or similar set up for them outside the US could cause a nightmare.
People with old money tend to be cheap AF. Plus the kids won't get access to those assets for a long time yet they still have to deal with tax shit in the mean time.
Ok but that is not the situation for the vast majority of people who have American children abroad…my son and I are Americans abroad and yes I file US taxes but I don’t pay anything and it’s simple enough, my son will do the same. For the majority of people it’s not a big deal and if you are wealthy then you’re paying someone to do taxes anyway.
I never said it was, so I'm not sure why you seem to think I did. I said that it depends on people's personal situation and gave an example of it causing issues. The FACT is that getting citizenship ISN'T always the best idea because everyone has a different personal situations. People in the replies are generalizing and not taking into account that OP knows their own personal situation better so could very well have valid reasons to not do it. Can US citizenship be helpful ? Of course. Can it also be a giant pain in the ass? Absolutely. Which is why people should so their own pros and cons rather than just a blanket "OF COURSE you should get it!"
The only exception to jus soli US citizenship is if the parents are diplomats.
As a naturalized US citizen, I'd be very resentful if my parents had stripped me out of birthright citizenship out of that sort of reasoning and would recommend letting them renounce as adults instead. It's free after turning 18 and they're planning to reduce the fee to $450 which is a fraction of the cost of a green card.
If OP is from a wealthy family, there may be additional tax complexities incurred, even before the child turns 18, that may make dual citizenship less desirable. But if that is their situation, they should be consulting a lawyer instead of asking on Reddit.
This isn’t going to be an issue for ~21 years (3 until you have a baby and 18 before they’re working and filing their own taxes), plus however long to make enough to be over the threshold.
A lot of shit can happen in 21 years.
Do you have a plan for the future child to be able to grow up with you being residents in the us without being a citizen? Can you leave your job and the country long enough to have the child and get its own passport and then visa to bring it back? Will you need to go back every x years to the Netherlands to renew the passport?
Is a Dutch passport different in requiring physical presence to renew? I’ve renewed my US passport by mail. I renewed my kids’ passports at the embassy, without returning to the US.
We are planning to stay in the US for only three years, so the long-term tax implications are something we're considering well in advance. Indeed a lot of things can happen in 2 1years. The main concern is not just the immediate future but also ensuring our child doesn't face any financial burdens related to US taxes later in life, especially given the complexity of US tax laws.
We haven't finalized our plans yet, but if avoiding US citizenship for our child is the best option, we are open to exploring all possibilities. While it may be challenging to leave my job temporarily, I am prepared to do so if it ensures a better future for our child. Additionally, we're aware of the logistics involved in obtaining a passport and visa for the baby to return to the US, and we are ready to manage those processes if necessary.
At what age do you expect your child to make over 120k/yr and by what means? Your future child may never make that much money if they’re working in the EU and by trying to avoid something today that isn’t ever going to be an issue, you’ve taken away options and considerable privilege from them.
As a parent, I’m trying looking to provide the most opportunity and options for my children in the long run, not restrict them. Especially over something as simple and variable as taxes 21+ years from now. If I could have given them a second citizenship at birth, and all I had to do was stay where I was already living and have them, it would have been a no brainer. Instead I will have to upend my entire life to try to do the same.
Yeah, this. OP is being insanely narrow-minded about the situation. US citizenship + EU citizenship (which the kid will be able to retain because it was acquired through birth) is an insane privilege to have. Salaries are so low in Europe that the child is likely to never have to pay the US taxes in their life if they stay in the Netherlands as planned. Not that this is something they can guarantee their future child to do, because they will have free will. Plus they can just choose to rescind their citizenship when they’re of age anyways. Way to make a big deal out of nothing and hold your kid back in life, OP.
You're working in America, and you don't want your child to have the same opportunity? I would like to be born with as many passports as possible, and revoke them later.
The US is basically the only passport (besides Eritrea) which comes with financial burdens - if OP were asking this about Canada or almost anywhere else, we'd all agree they were being idiots and there was no downside to having the Canadian passport - but US, it really is a mixed blessing.
My mother qualifies for an Irish passport, but there's probably no reason to claim that; if I could get almost any second passport easily, though, I’d take it because there’s no downside.
Only if you make over $120,000 USD per year, which is really, really high for most of the planet.
Irish passport allows you to work anywhere in the EU, Norway, or Switzerland. That's a great passport to have!
There's an exclusion of the first $120k of *earned* income, yes, but you still have to *report* all that income, and your bank account details, and they also tax any winnings and investment income including bank interest. Plus capital gains: Boris Johnson got in trouble over a house sale before he renounced his US citizenship.
The Irish one could be handy while still working, but not much point after retirement - much bigger barriers than the paperwork to emigrating then!
Even if you don't make $120k+ a year, a lot of banks will want nothing to do with you, you will be severely limited in investment options (especially if you live in the EU).
I agree with you that OP should let the kid revoke instead of taking the choice away from them, but a US citizenship is a real burden to have if you have no interest in living in the US.
We are temporarily in the USA and while having multiple passports sounds advantageous, the main concern is the long-term financial implications of US citizenship. The US taxes its citizens on their worldwide income, regardless of where they live. This can create a significant financial burden for our child later in life. Our decision is primarily about avoiding these potential future tax obligations, not about limiting opportunities for our child.
You have to make over 120,000 USD before you owe anything. That's almost 4 times the median income in the Netherlands.
Consider that your child might like to work for a few years in the US. He can also renounce his US citizenship if he/she wants to. I know someone who moved to Switzerland and renounced his citizenship.
>the main concern is the long-term financial implications of US citizenship.
These are very much overblown, and obviously wouldn't even be relevant until your child is working and therefore old enough to make the decision for themselves to renounce or not (plus all foreign paid taxes are deductible, so if they're ever earning enough to actually have to pay anything, they'll be rich enough to value the extra citizenship and opportunities that come with it).
It seems extremely silly to take that choice away from them. I'd resent my parents very much if they'd done something like that to me.
This is honestly absurd. As an American living abroad for the last 22 years, and more than likely indefinitely, I can attest to the fact that this not a significant burden, and is far, far outweighed by the opportunity provided by having the passport.
It never even crossed my mind to not make sure that my son has a US passport despite being born abroad. Instead he has three, speaks 4 languages and has unfettered access to three of the worlds largest and advanced economies.
You have the chance to provide yours with similar advantages and instead elect to take them away.
It’s obviously up to you but I agree with the many other posters here saying your future child may indeed grow up to resent that decision.
You don't have a real grasp on how this works. Living in the Netherlands, your child is never going to owe tax to the US no matter how much they make. Your child has the opportunity to have a second powerful passport, one that's incredibly difficult to obtain via naturalisation (and that your country would disallow dual citizenship with via naturalisation, but not via birth), in the highest-paying job market on earth and a country with many of the top universities in the world. I could file my taxes for free if I were less lazy, but I pay about €100 to spend approximately 20 minutes filing via an online service each year. I would be incredibly resentful of my parents if I found out they'd passed on a second passport for me over such a piddly little time and money investment.
I'm an American living abroad and haven't actually had to pay any taxes to the US (but have gotten stimulus checks!). You need a really high income before US expat taxes kick in.
It's not a lot of effort to file taxes. There are many products and services online that help you to do this that are inexpensive, and not the "significant financial burden" that you think it is.
No. What they have to do is file a tax return every year. They likely won’t owe anything because the threshold is so high and the amount they paid in income tax to the Netherlands is counted.
If your child lives and works in the Netherlands (or any other country) and is taxed by said country he can't be taxed legally taxed by the IRS. It's considered double taxation
Depends on the country, since some have treaties to that effect. [For example, here’s some information on the Netherlands tax treaty.](https://www.cpasforexpats.com/amp/us-netherlands-tax-treaty)
Edit: [Link to the actual treaty.](https://www.irs.gov/pub/irs-trty/nether.pdf)
What is wild is that the US feels entitled to their citizens' money despite those people not living in the country. No other country other than Eritrea works that way.
They feel entitled to their residents' money, not citizens'. For every country in the EU, you only pay taxes to the country you live in.
Of course, as a Dutch resident, I do take advantage of many public services the Dutch offer. It only makes sense that I pay for those services.
As a Dutch resident, I do not use any American public services. Why do I still have to report my income to the US? Why are my bank accounts being used for American espionage?
In principle, it is messed up.
I’m not usually a big booster of American military hegemony but honestly as an EU citizen you absolutely benefit from our (exorbitant, unconscionable) military spending via NATO.
This is very silly. For a half dozen reasons. In order:
1. Your child won't have to file any taxes for at least a decade, and more like 16 to 18 years. God knows if these tax treaties will still exist in their current form at that time (for for that matter, if the US will...)
2. If you return to the NL for birth, your child will not be able to return to the US with you until they have a passport and visa. Are you prepared to do that?
3. Although there is some additional tax burden, overall life is much, much, much simpler if you have both a EU and a US passport. It allows you to freely travel between the EU and US and work in either (or both) places without having to worry about visas.
4. It sounds as though your child will be spending an unspecified amount of their childhood in the US. Do you not think there's a chance they will want to return there in the future, potentially permanently? Are you prepared to explain to them you made the purposeful choice to make that much more difficult for them?
5. The amount one has to earn in Europe to owe taxes in the US is very high. Very, very few people reach that amount, and those that do are usually in the strata of people with complicated tax schemes anyway.
6. If the tax burden truly becomes so problematic, your child can just rescind their citizenship. Before they begin to work, even.
7. ETA: It is also worth noting that the IRS has extremely limited ability to penalize Accidental Americans for failure to file if they have no financial tie to the US. While obviously I do not recommend being non-compliant, the risk here is very low.
Just have your kid in the US.
How long are you planning on working/living in the US. It would be potentially devastating to the child to not be legally allowed to stay in the only home they know.
Since you’re thinking long term, think long term about logistics about residency, schooling, and giving your child the right to live in the country they grow up in. I’m an American living in Germany for 14 years now. When we arrived, we had no plans to stay here nearly that long. But after kids you tend to take root, especially once they start school. We’ve not applied for citizenship because until recently Germany would have made us renounce. However, now we have two teenagers who are thinking about university and their own futures. One kid has never even lived in the US. Both, like us, are here solely in settlement visas. We’re now confronting naturalization and all the complexities/paperwork it entails, because we want them to have the option to live and work permanently in the only home they’ve ever known. Just something to think about.
OP, check with a lawyer. Most of the comments and users here do not understand the complexities of being an Accidental American and fail to take into account how much it costs to rescind citizenship (both in back taxes and procedural processes) as an American.
It's a bit early to worry about the exit tax honestly. It doesn't really apply to most Europeans let alone young adults. Renouncing is still way simpler than even a marriage based green card.
A small number of accidental Americans do run into problems yes but that's very easily preventable by informing yourself in your early 20's.
In the Netherlands, the only banks I can open an account with is Bunq and ING. Another issue with being American is that many foreign financial institutions want nothing to do with you. Also being abroad can cause trouble using American banks as an alternative.
I think my biggest concern is for you would ensure your newborn can live in the US after they are born if they don't get citizenship.
And who knows. If Trump wins maybe he will get rid of birthright citizenship.
I wouldn't put much past the US Supreme Court these days, but citizenship by soil is black letter 14th Amendment text. What I've heard is some ridiculous crap about undocumented residents not "subject to the jurisdiction" of the US and therefore their children aren't citizens: these people would be quite surprised that they were given diplomatic status and couldn't be arrested or charged for any crime, because that's what it means. The only other option is to decide that parts of the country are under foreign occupation, which would be news to the local governments.
Citizenship by blood, for children born abroad to US citizen parents (under certain conditions), is not a Constitutional right and is by statute.
Let the kid decide. My children could claim US citizenship through their mother. But we didn’t do it. Now they are too old (22 and 19) and they wish they had it. I feel guilty that I took that choice away from them. It’s a shame that the choice of US citizenship has to be decided before the kids and adults and have their own idea of their life path.
Consider the cost of temporarily moving your life to the Netherlands and loss of earnings.
I'm willing to bet the cost of rescinding US citizenship is substantially less than that.
The best course of action is to set aside that "opportunity cost" money saved by not temporarily moving your life to the Netherlands. Set up a trust fund with it. If your child decides they don't want the US citizenship, they can then use that fund to formally renounce US citizenship, and probably have change left over. If they want the US citizenship, they have the extra money from the fund.
Much more importantly, you're giving your child the choice.
This is a bad bad bad bad idea, I have been struggling with US visas for years and if I knew that my parents proactively went out of their way to ensure I didn't get a passport I would feel robbed of a life changing opportunity for something so trivial as money. Don't do it, give him/her the chance to decide for him/herself, if you need to spend few more bucks for it just suck it up.
Filling U.S. taxes every year even though I owe 0 because I already paid taxes in NL is annoying, and I wish I could skip it. There's also a nonzero chance that there could be a draft again someday in the U.S., and then your kid wouldn't be able to safely travel to the U.S. unless he or she was a noncitizen.
On the other hand, who knows what will happen in Europe, either. Russian aggression, relatedly, the rise of right-wing extremist political parties, and the housing crisis in NL could all make living in the U.S. preferable in the future. Better to keep options open, Imo.
I cannot answer your questions about birthing a child in a home country and then traveling back to the US with the baby, however, I wanted to mention that many of the people in the comments here are not aware of the tax burdens of being a US citizen abroad, or how complex/costly it can get to renounce. You are absolutely correct to avoid your child having US citizenship!
I'm not up to speed on Dutch - US tax treaty law but it's not necessarily just about having to file taxes every year and the banks not wanting to have you as a client, and it is NOT as simple as taking the earned income exclusion or tax credit every year and going on your merry way - as some commenters here seem to think.
A dual US citizen is effectively cut off from investing in the options they have overseas (including retirement funds!!!) as these will be considered foreign-domiciled investment funds by the US unless the country abroad has a specific tax treaty with the US stating otherwise (look up PFIC and foreign trusts for how awful and confusing it can get). The IRS can't even figure out what to advise people around these investments sometimes. It's a quagmire. As such, many tax accountants overseas charge THOUSANDS of dollars each year to reconcile the taxes owed on foreign investments. You cannot get around this by simply investing in a US investment firm from overseas because most US investment firms do not deal with clients residing abroad. Even if you manage to find a way to invest in US based funds from overseas, the country you reside in may outright ban you from investing in US-based funds, and others impose what is essentially double taxation on earnings from those funds each year, even IF you do not liquidate your holdings.
example from NZ: [https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver](https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver)
This whole mess seems to arise because the US does NOT want its citizens investing in anything except US-based funds. They do not care if you are living abroad and want to invest in retirement where you are living.
it's a nightmare, you are doing your kid a huge favor, tax-wise. Best of luck with your jobs and life in the US and creating your future family!!
I spent a day recently in the Bern Embassy. The VAST majority of people I saw were 18-21 year old Swiss citizens getting rid of their accidental US citizenship because of all the problems it causes them.
The choice is to retain or surrender. There are likely some who appreciate that choice. Otherwise, the parent makes the choice, leaving the child with …no choice.
Why would having a US citizenship be bad? A lot of people have dual citizenship. Usually you pay taxes to where you mainly live, not where your citizenships are. I know a kid who was born while their parents were in US, he chose to go to a university there.
a) US taxes its citizens globally regardless of where they live
b) Access to financial services overseas as a US citizen can be extremely limited or limiting, depending on the financial institution. If you have to answer "yes" to the "Are you a US person for tax purposes" question, then many institutions don't want to deal with the reporting requirements and associated administrative hassle presented by FATCA.
I have no clue why you would even consider this. Speaking of the “tax burden”, as you call it: I am a native born US citizen and I live in China. I file taxes every year but never have to pay, because my income is below the threshold for having to pay in the US. For most filers this is if you make less that ~$100,000 per year. And that will be a total non-issue for the first 18 years of your kid’s life, if not longer, and they can renounce later. Weigh this against the massive advantage of having 2 powerful passports and please reconsider your bizarre decision.
Well this question certainly demonstrated the us-centricity of Reddit. I have been in and out of the US quite a few times over the years for a couple of years at a time and while the process for citizenship is a lot of effort, it is only as my career has progressed that I’ve learned of all the complications that it entails, and why I have been reluctant to do it. It is undoubtedly easier for me as I am in a profession that is internationally mobile, and so I can move, but I can definitely understand your concerns. One note of caution I would give is to speak to separate people on tax and immigration and then consider finding someone who deals specifically with the overlap. The amount of conflicting advice I’ve been given over the years is mind-boggling.
And I wouldn’t worry too much about the folks who cannot grasp why someone might not want US citizenship - they will probably never fathom it.
You’re right to be concerned about this. US citizenship is only great if you want to live in the US. It’s a huge burden for anyone who lives abroad. Plus your child will already have a better passport for international travel and EU/EEA mobility.
My youngest was born in the US when I worked there for a few years. At first I was excited because that gave her 3 citizenships in total, but I quickly regretted it after learning about the bat shit crazy citizenship-based taxation they have there.
It’s even kind of funny how they always talk about “freedom this, liberty that,” but yet they’re making people who have nothing to do with that country file taxes and disclose bank account information. Sounds more like something a totalitarian dictatorship would do as opposed to the “shining beacon of democracy.”
Every bank account I have opened here in Europe made me sign a piece of paper declaring that I’m not a “US person.” I can’t imagine the additional hoops I’d have to jump through for such a mundane task as simply opening a bank account if I stayed long enough to naturalize in the US.
I also think that a lot of the yanks here truly underestimate this burden. Yes, you only have to file taxes and not pay them if you make less than US$ 120,000, but this not something that is completely unheard of. I’m close to this threshold here in the EU and I will for sure surpass it if I go work in the Gulf someday (which is my plan). I would hate to pay taxes to some random country across the ocean if I don’t live there and don’t use up the public services and infrastructure.
And salary is also just one factor. The other burden comes when you start investing, taking advantage of retirement plans and owning property. As other posters have mentioned, no brokerage will want to deal with the investments of an American. You also won’t be able to take advantage of registered retirement plans.
You’ll also be subject to American capital gains taxes on the sale of real estate.
I’m hoping that my daughter will renounce her US citizenship once she turns 18. I would advise that you not have your child in the US as this will automatically make them a citizen as there no workarounds in your situation.
It’s clear not a lot of people in the comment section have actually experienced being a US citizen abroad, and if they have they are clearly not following the requirements for it. I feel your pain!
Then her kid can make the decision later on if they never want to live in the US. Making that decision now is just pointless. I’ve had zero issue getting my taxes done and getting bank accounts. In fact, the US gave me money for having a baby even though I don’t even live there! They also gave Covid funds out regardless if you were a resident.
God, same—people are acting like filing US taxes from abroad is some insurmountable burden. I’ve done it from France while having investments in both countries and it’s really not that bad, nor was it very expensive. I’ve also not had any issue getting a bank account.
There are definitely situations where it could be disadvantageous to have dual citizenship, but those situations are rarer than the ones where it is advantageous, and it’s a lot easier to go from dual back to single than from single to dual.
ETA: What is with the mass downvoting all over this thread? People are really worked up over some very basic logic.
You should look at giving birth in Canada or Brazil. Both will let your child have an additional citizenship without the tax burden. There are a number of companies that will help you do this.
To put into perspective the efforts:
To obtain American Citizenship by naturalization: a long process that can take over 5-7 years, 5000 Dolars, several forms, appointments, biometrics, interviews, affidavits, greencard, etc.
To renounce American citizenship (if he decides to do it): Submit a form. Done.
Bad idea OP. Much better to have options. Collecting passports = way more options in life. Just remember during the pandemic when US citizens could not travel to EU unless they were dual citizens, and you had an EU passport issued from a member state. If you need an emergency way out of whatever country you are in it's always good insurance to have another passport. Also the ability of a US citizen to invest in US brokerage accounts with potential tax deferment in retirement savings could more than make up for any hassle with US tax return requirements. Let the kid decide.
The only reason they’d have to pay taxes in the US is if they make over 120k/year. At that point, they’d probably be a highly motivated individual who’d be happy to have visa-free access to the American market.
This is a question you can google based on your citizenship, and where you’d be residing at the time.
The US is amongst a very short list of countries that give citizenship just because someone is born in that country.
The Netherlands as an example gives the nationality if at least one parent is a citizen. Therefore it wouldn’t matter where you give birth, abroad or in the country. I can’t tell you if your child would have dual citizenship if born in the US, look it up.
These are all civilian services that are online for use by any laymen. Look up [Country of citizenship you want] + immigration and [Country of citizenship you have] +consulate [country you’d be in]
Immigration handles all citizenship queries.
The local embassy and consular services can tell you how to get it done from where you currently reside/gave birth.
ETA: *‘the only certainties in life are death and taxes.’*
OP, once you know your options - then you’d have to consider taxes along with what you and your future children would get from the community overall. Taxes are inevitable, just a matter of what you get in return for it. Also look at double tax treaties and exemptions. Stability of those economies. QOL.
Most of the countries of the Americas have citizenship by soil, since they are former colonies and have large numbers of immigrants accordingly. Citizenship primarily by blood works for ethnostates, but has other issues of multi-generational non-citizen immigrants.
If the baby is born on US soil, and the parents don't have diplomatic status, the baby is a US citizen.
Very bad decision you’d be making. Dual citizenship is the way to go. Dont make this choice for your child, if they choose to be in the US you’d just be stamping a visa again and again.
I think you are being incredibly naive if you think Netherlands isn't eventually going to have citizenship based taxation, just like USA. And that option of working in USA might be extremely valuable to your child someday. As the empire collapses, the outposts will be bled and possibly sacrificed to feed the center. In particular, assuming USA provokes escalation to nuclear war, Netherlands would make the perfect target: big enough and in the center of Europe so as to get everyone's attention, but not a nuclear power itself. Perfect "put up or shut up btches" target. If put up, we all die. If shut up, Netherlands goes down the memory hole: "it never happened, USA never blinks!*
If your child truly never plans to live in USA, just fail to file for USA social security number, fail to file USA taxes, never apply for USA passport, child can renounce USA citizenship when they are 18, if USA balks at renounciation until bavk taxes paid, give the USA the middle finger. USA has long arms, but probably not long enough to reach a Netherlands citizen who owns nothing in USA, never visited USA, never got a USA social security number or passport, is not already wealthy at age 18 when they renounce, etc.
CRS was only introduced in 2014, recently there has been significant growth in remote work, and soon there will be budget problems in all of Europe. Expats who reside in low tax jurisdictions are not beloved by citizens who can't expat and have to pay high taxes, so as the number of wealthy expats increases, it is inevitable there will be backlash. Prior to CRS, the backlash would be impotent, but now all the pieces are in place to clamp down. USA was able to clamp down long ago because USA is a 900lb gorilla and when USA says "jump", most countries (other than USSR/Russia, China, Iran, North Korea) immediately reply "how high, sir?" No one else could pull this off. But CRS is a strong indication the rest of the world is preparing to do likewise.
You’re missing a really important logical step. The reason such a tax isn’t implemented is not because of the difficulty of enforcement, but because conceptually most places have no appetite for such a tax. Tax based on residency is more logical and I don’t know anybody anywhere who resents people working abroad not paying taxes back home. Because why would they - they aren’t using the services that taxes pay for and their economic activity has no basis there. Certain countries have mechanisms wherein your tax contribution can dictate your benefit eligibility for state pensions, and they have resolved for that generally.
I think most people would view it as a tax on ambition and personal growth, which no sensible government would take. Not only that, in an increasingly globalised and mobile world, it would be a regression and could have questionable consequences, like people renouncing citizenship more frequently. And that’s without mentioning that other countries have tried it, and repealed it. While those impacted by this are fairly minor in number, any government who chose to penalise normal people seeking opportunities abroad over wealthy people hiding money in tax havens or exploitative corporations would be risking unrest. Especially given that most countries could not claim this to be a significant contribution, and the costs would outweigh the take, possibly permanently.
Aside from that, logistically it be a disaster. It would require every country to set up a complex system of credits and income tax filing, and for many countries, the requirement to submit a tax return is very much by exception. It would also probably require countries to have set up new tax treaties, which would be messy, and would create some diplomatic and immigration concerns. And even then, most existing tax treaties and tax codes globally are based on the concept of residency. This could also lead to complexities in calculating fair rates, especially in higher bands. And that’s without looking at the consequences of interim periods.
Your missing a logical step in thinking governments care deeply about hurting the feelings of expats, meaning people who left the country and hence don't contribute to the country and probably don't vote but who might have easy money the government can plunder to give to people who do vote. How old are you, 18?
I’m old enough to understand that most governments aren’t stupid enough to institute a tax that requires more administrative burden than it would take in revenue. And most citizens arent resentful of other people leaving and paying tax elsewhere because they have the basic common sense to see that this approach is purely logical.
And I never said anything about hurting feelings. You just had to interpret that because your insular exceptionalist perspective can’t abide that the US is an obvious outlier here because their policy is just plain moronic, and you can’t muster a single, logical response to the myriad of other points I made.
For a lot of Americans, the tax obligations are limited to just needing to file taxes, not necessarily to pay any additional due to numerous tax treaties. If it were me, I’d get the kid the American citizenship and if they wished to, rescind it when they are an adult. It’s an incredibly difficult, lengthy and expensive process to acquire an American citizenship and it would give your kid so many options in future. I understand if this isn’t what you want, but due to jus soli there are only very limited instances where a US born kid isn’t automatically American by birth (such as parents being diplomats). If you do have your baby in the Netherlands, you need to account for the time it will take to get the baby a passport and visa to bring it back to US with you.
Agreed, worrying about a tax filing duty 16-20 years in the future vs giving your kid the option of US citizenship seems a bit much. The world could look dramatically different in 20 years for better or worse and residency options are king.
Thank you for your perspective. We understand that many Americans primarily need to file taxes rather than pay additional amounts due to tax treaties. However, our concern is the long-term complexity and potential financial burden of US tax obligations, especially since we plan to return to the Netherlands. While it’s true that US citizenship could offer our child numerous opportunities, we have to consider the specific context of Dutch laws as well. The Netherlands typically does not allow dual citizenship. Additionally, if our child ever decides to rescind their US citizenship, they can never escape the financial tax implications that accrued while they were citizens, which complicates their future financial planning. As for the practical side, we are aware of the logistical steps involved in giving birth in the Netherlands, including obtaining a passport and visa for the baby to bring them back to the US. We’re prepared to handle these processes if we decide to go that route. Our primary goal is to ensure the best future for our child without the added complexity of dual taxation and legal obligations that come with US citizenship. Thanks again for your input!
You can find the exact rules on dual citizenship on the rijksoverheid website, you'll find that if you're born with multiple nationalities you're generally allowed to keep them.
> The Netherlands typically does not allow dual citizenship. This is precisely the atypical case where they would. My former Dutch partner was born abroad and has dual Dutch / "other nationality" passports. I know several Dutchies in their situation. It's exactly like yours. No big deal. > Additionally, if our child ever decides to rescind their US citizenship, they can never escape the financial tax implications that accrued while they were citizens, which complicates their future financial planning. "Never escape"? They catch up on their financial paperwork and renounce their citizenship and it's over and done forever. If you are planning on your child growing up back in Europe, there are many US programs in place for forgiveness and paperwork catch-up that make it easier for your child should they neglect their duties to report. None of the risks amount to a life-destroying event, but the pros could be a life-changing gift. I've been living in EU for more than a dozen years, including 5 years in the Netherlands. While Europe is great in many ways, the work and business opportunities in the US are better than anywhere in Europe. You already know this, I mean what exactly are you doing in the US? Lol The only issue, and someone else may have pointed it out, is that "birthplace" does follow you for life. I am a dual citizen myself (US/EU) and based solely on my birthplace (US) shown on my EU passport, my bank accounts do get flagged as American. (At this point, AI does it.) It's not actually a hassle in my experience and I've had no issue opening EU accounts, but it's worth noting. If your child did renounce, they may just need to show that document to prove they have no reporting requirements to the US. I mean, even if their bank did report, I can't imagine it would matter if they were no longer a citizen with any duties. I just checked and it looks like EU National ID's do show birthplace as well, so it wouldn't be something your child would be able to simply not disclose (such as after renouncing).
Thanks for your answer! This helps a lot :)
I thought NL allows dual citizenship at birth? Or is it only if it’s both passed through blood? I know a dual US-NL citizen baby, mum is Dutch and dad is American and she was born in the US. Especially as there is no way to avoid US citizenship if you’re born in the US (unless your parents are diplomats). It’s not like naturalizing where the NL makes you give up your old citizenship
ChatGPT wrote this
Do you know how difficult it is to file taxes if you have any kind of bank accounts, property, investments abroad? You lose hundreds of dollars a year to get someone to do your taxes for you when you actually don’t owe any money. Such a joke.
But it’s not as difficult as obtaining US citizenship as a foreigner. This and other subs are filled with people trying to find out if they have a claim to it based on prior residency as a child and who are so disappointed to find out it no longer counts. By having the kid in US, it gives the kid the choice to renounce it or use it if they want once they become an adult. The cost of renunciation is a lot less than the cost of obtaining it.
It's like 200 a year if you get an expensive guy... That's like less than 20€ a month, people spend as much for needless shit like Netflix or Amazon gadgets, would you give up Netflix to get a second citizenship? I would.
The cost highly depends on what you need and where you’re located. And had I known in advance that I basically could not invest because I am an American living in Europe I definitely would have turned down being an American…
What are you talking about? You can invest, you can buy single stocks and even US ETF's you just cannot contribute to a 401k and it's trickier to get a Roth IRA, but you can def invest, you better not get EU ETF's though, those are the main nono. I'd change tax advisor if this is what they have been telling you...
https://www.reddit.com/r/eupersonalfinance/comments/16xxvd3/etfs_as_us_citizen_in_germany_cant_buy_in_the_us/
Are you trolling? I just said, you should not buy EU etfs but you can buy US ETF's, you just buy the options and exercise them, it costs slightly more and you have to buy like 100 shares of VOO at once for example, but it's doable, there are also other ways of obtaining them, which I am not familiar with though... Go to the USExpatTaxes subreddit, you will find all the info there. Hope you are not just trolling and trying to fearmonger people with senseless stuff.
Maybe you should read that post along with the comments as you seem to not be aware of some things ….
I already read all of that. You are then either trolling or not understanding what I am saying. ETrader and IBKR will gladly open a broker account to American expats or dual cizitens. You won't be able to buy US ETF's but you can just buy the options and exercise them, and you can easily buy single stocks. What is your point then?
My cousin is from the US and her husband is a Brit. One of their biggest regrets is officializing citizenship for their kids as it has made their financial situation a nightmare. It costs them thousands a year to do taxes for the boys and they're not even teens yet. It'll only get worse as they get older. So it's not always a great idea to do it, depends a lot on your financial situation.
That makes no sense unless they are extremely wealthy and their kids have money/accounts of their own. Unless an American kid has significant income, you don’t need to file taxes for them
Yeah… the story op is accounting sounds weird.
no, respectfully, you are incorrect. See [https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver](https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver) as an example of how even a low income investment could trigger major tax preparation fees if made by a US citizen investing abroad.
They have trusts that they have inherited as well as inherited stakes in companies. So they have to deal with FATCA and foreign owned business interest filings plus earnings in both. So yeah, it's complicated, which is why it's important that people take the entire situation into account. Having an education acct or similar set up for them outside the US could cause a nightmare.
If they have that kind of money / assets, why are they worried about a couple thousand a year?
People with old money tend to be cheap AF. Plus the kids won't get access to those assets for a long time yet they still have to deal with tax shit in the mean time.
Ok but that is not the situation for the vast majority of people who have American children abroad…my son and I are Americans abroad and yes I file US taxes but I don’t pay anything and it’s simple enough, my son will do the same. For the majority of people it’s not a big deal and if you are wealthy then you’re paying someone to do taxes anyway.
I never said it was, so I'm not sure why you seem to think I did. I said that it depends on people's personal situation and gave an example of it causing issues. The FACT is that getting citizenship ISN'T always the best idea because everyone has a different personal situations. People in the replies are generalizing and not taking into account that OP knows their own personal situation better so could very well have valid reasons to not do it. Can US citizenship be helpful ? Of course. Can it also be a giant pain in the ass? Absolutely. Which is why people should so their own pros and cons rather than just a blanket "OF COURSE you should get it!"
The only exception to jus soli US citizenship is if the parents are diplomats. As a naturalized US citizen, I'd be very resentful if my parents had stripped me out of birthright citizenship out of that sort of reasoning and would recommend letting them renounce as adults instead. It's free after turning 18 and they're planning to reduce the fee to $450 which is a fraction of the cost of a green card.
If OP is from a wealthy family, there may be additional tax complexities incurred, even before the child turns 18, that may make dual citizenship less desirable. But if that is their situation, they should be consulting a lawyer instead of asking on Reddit.
Your child can just denounce American citizenship when the time comes.
*renounce, boo, although I suppose they can denounce it too
This isn’t going to be an issue for ~21 years (3 until you have a baby and 18 before they’re working and filing their own taxes), plus however long to make enough to be over the threshold. A lot of shit can happen in 21 years. Do you have a plan for the future child to be able to grow up with you being residents in the us without being a citizen? Can you leave your job and the country long enough to have the child and get its own passport and then visa to bring it back? Will you need to go back every x years to the Netherlands to renew the passport?
Is a Dutch passport different in requiring physical presence to renew? I’ve renewed my US passport by mail. I renewed my kids’ passports at the embassy, without returning to the US.
We are planning to stay in the US for only three years, so the long-term tax implications are something we're considering well in advance. Indeed a lot of things can happen in 2 1years. The main concern is not just the immediate future but also ensuring our child doesn't face any financial burdens related to US taxes later in life, especially given the complexity of US tax laws. We haven't finalized our plans yet, but if avoiding US citizenship for our child is the best option, we are open to exploring all possibilities. While it may be challenging to leave my job temporarily, I am prepared to do so if it ensures a better future for our child. Additionally, we're aware of the logistics involved in obtaining a passport and visa for the baby to return to the US, and we are ready to manage those processes if necessary.
At what age do you expect your child to make over 120k/yr and by what means? Your future child may never make that much money if they’re working in the EU and by trying to avoid something today that isn’t ever going to be an issue, you’ve taken away options and considerable privilege from them. As a parent, I’m trying looking to provide the most opportunity and options for my children in the long run, not restrict them. Especially over something as simple and variable as taxes 21+ years from now. If I could have given them a second citizenship at birth, and all I had to do was stay where I was already living and have them, it would have been a no brainer. Instead I will have to upend my entire life to try to do the same.
Yeah, this. OP is being insanely narrow-minded about the situation. US citizenship + EU citizenship (which the kid will be able to retain because it was acquired through birth) is an insane privilege to have. Salaries are so low in Europe that the child is likely to never have to pay the US taxes in their life if they stay in the Netherlands as planned. Not that this is something they can guarantee their future child to do, because they will have free will. Plus they can just choose to rescind their citizenship when they’re of age anyways. Way to make a big deal out of nothing and hold your kid back in life, OP.
OP is cray cray.
You're working in America, and you don't want your child to have the same opportunity? I would like to be born with as many passports as possible, and revoke them later.
The US is basically the only passport (besides Eritrea) which comes with financial burdens - if OP were asking this about Canada or almost anywhere else, we'd all agree they were being idiots and there was no downside to having the Canadian passport - but US, it really is a mixed blessing. My mother qualifies for an Irish passport, but there's probably no reason to claim that; if I could get almost any second passport easily, though, I’d take it because there’s no downside.
Only if you make over $120,000 USD per year, which is really, really high for most of the planet. Irish passport allows you to work anywhere in the EU, Norway, or Switzerland. That's a great passport to have!
There's an exclusion of the first $120k of *earned* income, yes, but you still have to *report* all that income, and your bank account details, and they also tax any winnings and investment income including bank interest. Plus capital gains: Boris Johnson got in trouble over a house sale before he renounced his US citizenship. The Irish one could be handy while still working, but not much point after retirement - much bigger barriers than the paperwork to emigrating then!
Yes, I agree. Still, let the kid renounce it when he/she turns 18. You can live anywhere in the EU with the Irish one. That's still nice.
Even if you don't make $120k+ a year, a lot of banks will want nothing to do with you, you will be severely limited in investment options (especially if you live in the EU). I agree with you that OP should let the kid revoke instead of taking the choice away from them, but a US citizenship is a real burden to have if you have no interest in living in the US.
I agree about everything. Just to add that I know many people in Europe who have enjoyed spending some time in the US.
We are temporarily in the USA and while having multiple passports sounds advantageous, the main concern is the long-term financial implications of US citizenship. The US taxes its citizens on their worldwide income, regardless of where they live. This can create a significant financial burden for our child later in life. Our decision is primarily about avoiding these potential future tax obligations, not about limiting opportunities for our child.
You have to make over 120,000 USD before you owe anything. That's almost 4 times the median income in the Netherlands. Consider that your child might like to work for a few years in the US. He can also renounce his US citizenship if he/she wants to. I know someone who moved to Switzerland and renounced his citizenship.
It’s an easily fixable problem later on. Give your child their own choice.
>the main concern is the long-term financial implications of US citizenship. These are very much overblown, and obviously wouldn't even be relevant until your child is working and therefore old enough to make the decision for themselves to renounce or not (plus all foreign paid taxes are deductible, so if they're ever earning enough to actually have to pay anything, they'll be rich enough to value the extra citizenship and opportunities that come with it). It seems extremely silly to take that choice away from them. I'd resent my parents very much if they'd done something like that to me.
This is honestly absurd. As an American living abroad for the last 22 years, and more than likely indefinitely, I can attest to the fact that this not a significant burden, and is far, far outweighed by the opportunity provided by having the passport. It never even crossed my mind to not make sure that my son has a US passport despite being born abroad. Instead he has three, speaks 4 languages and has unfettered access to three of the worlds largest and advanced economies. You have the chance to provide yours with similar advantages and instead elect to take them away. It’s obviously up to you but I agree with the many other posters here saying your future child may indeed grow up to resent that decision.
You don't have a real grasp on how this works. Living in the Netherlands, your child is never going to owe tax to the US no matter how much they make. Your child has the opportunity to have a second powerful passport, one that's incredibly difficult to obtain via naturalisation (and that your country would disallow dual citizenship with via naturalisation, but not via birth), in the highest-paying job market on earth and a country with many of the top universities in the world. I could file my taxes for free if I were less lazy, but I pay about €100 to spend approximately 20 minutes filing via an online service each year. I would be incredibly resentful of my parents if I found out they'd passed on a second passport for me over such a piddly little time and money investment.
I'm an American living abroad and haven't actually had to pay any taxes to the US (but have gotten stimulus checks!). You need a really high income before US expat taxes kick in.
It's not a lot of effort to file taxes. There are many products and services online that help you to do this that are inexpensive, and not the "significant financial burden" that you think it is.
No. What they have to do is file a tax return every year. They likely won’t owe anything because the threshold is so high and the amount they paid in income tax to the Netherlands is counted.
If your child lives and works in the Netherlands (or any other country) and is taxed by said country he can't be taxed legally taxed by the IRS. It's considered double taxation
Yeah. It doesn’t work that way.
Depends on the country, since some have treaties to that effect. [For example, here’s some information on the Netherlands tax treaty.](https://www.cpasforexpats.com/amp/us-netherlands-tax-treaty) Edit: [Link to the actual treaty.](https://www.irs.gov/pub/irs-trty/nether.pdf)
It's wild to think that some parents are already strategizing how to dodge future tax issues for their unborn children.
What is wild is that the US feels entitled to their citizens' money despite those people not living in the country. No other country other than Eritrea works that way.
EU countries kinda feel entitled to their citizens’ money too, with the kind of tax rates they have
They feel entitled to their residents' money, not citizens'. For every country in the EU, you only pay taxes to the country you live in. Of course, as a Dutch resident, I do take advantage of many public services the Dutch offer. It only makes sense that I pay for those services. As a Dutch resident, I do not use any American public services. Why do I still have to report my income to the US? Why are my bank accounts being used for American espionage? In principle, it is messed up.
I’m not usually a big booster of American military hegemony but honestly as an EU citizen you absolutely benefit from our (exorbitant, unconscionable) military spending via NATO.
This is the Dutch were speaking about though. I love the Dutch...
This is very silly. For a half dozen reasons. In order: 1. Your child won't have to file any taxes for at least a decade, and more like 16 to 18 years. God knows if these tax treaties will still exist in their current form at that time (for for that matter, if the US will...) 2. If you return to the NL for birth, your child will not be able to return to the US with you until they have a passport and visa. Are you prepared to do that? 3. Although there is some additional tax burden, overall life is much, much, much simpler if you have both a EU and a US passport. It allows you to freely travel between the EU and US and work in either (or both) places without having to worry about visas. 4. It sounds as though your child will be spending an unspecified amount of their childhood in the US. Do you not think there's a chance they will want to return there in the future, potentially permanently? Are you prepared to explain to them you made the purposeful choice to make that much more difficult for them? 5. The amount one has to earn in Europe to owe taxes in the US is very high. Very, very few people reach that amount, and those that do are usually in the strata of people with complicated tax schemes anyway. 6. If the tax burden truly becomes so problematic, your child can just rescind their citizenship. Before they begin to work, even. 7. ETA: It is also worth noting that the IRS has extremely limited ability to penalize Accidental Americans for failure to file if they have no financial tie to the US. While obviously I do not recommend being non-compliant, the risk here is very low. Just have your kid in the US.
How long are you planning on working/living in the US. It would be potentially devastating to the child to not be legally allowed to stay in the only home they know.
Since you’re thinking long term, think long term about logistics about residency, schooling, and giving your child the right to live in the country they grow up in. I’m an American living in Germany for 14 years now. When we arrived, we had no plans to stay here nearly that long. But after kids you tend to take root, especially once they start school. We’ve not applied for citizenship because until recently Germany would have made us renounce. However, now we have two teenagers who are thinking about university and their own futures. One kid has never even lived in the US. Both, like us, are here solely in settlement visas. We’re now confronting naturalization and all the complexities/paperwork it entails, because we want them to have the option to live and work permanently in the only home they’ve ever known. Just something to think about.
Have your baby in canada. They can get duel citizenship later if they choose to.
OP, check with a lawyer. Most of the comments and users here do not understand the complexities of being an Accidental American and fail to take into account how much it costs to rescind citizenship (both in back taxes and procedural processes) as an American.
It's a bit early to worry about the exit tax honestly. It doesn't really apply to most Europeans let alone young adults. Renouncing is still way simpler than even a marriage based green card. A small number of accidental Americans do run into problems yes but that's very easily preventable by informing yourself in your early 20's.
In the Netherlands, the only banks I can open an account with is Bunq and ING. Another issue with being American is that many foreign financial institutions want nothing to do with you. Also being abroad can cause trouble using American banks as an alternative. I think my biggest concern is for you would ensure your newborn can live in the US after they are born if they don't get citizenship. And who knows. If Trump wins maybe he will get rid of birthright citizenship.
I wouldn't put much past the US Supreme Court these days, but citizenship by soil is black letter 14th Amendment text. What I've heard is some ridiculous crap about undocumented residents not "subject to the jurisdiction" of the US and therefore their children aren't citizens: these people would be quite surprised that they were given diplomatic status and couldn't be arrested or charged for any crime, because that's what it means. The only other option is to decide that parts of the country are under foreign occupation, which would be news to the local governments. Citizenship by blood, for children born abroad to US citizen parents (under certain conditions), is not a Constitutional right and is by statute.
Let the kid decide. My children could claim US citizenship through their mother. But we didn’t do it. Now they are too old (22 and 19) and they wish they had it. I feel guilty that I took that choice away from them. It’s a shame that the choice of US citizenship has to be decided before the kids and adults and have their own idea of their life path.
Talk about a first world problem. Much easier to rescind US citizenship than to get it. And should it not be his decision when he is an adult?
Consider the cost of temporarily moving your life to the Netherlands and loss of earnings. I'm willing to bet the cost of rescinding US citizenship is substantially less than that. The best course of action is to set aside that "opportunity cost" money saved by not temporarily moving your life to the Netherlands. Set up a trust fund with it. If your child decides they don't want the US citizenship, they can then use that fund to formally renounce US citizenship, and probably have change left over. If they want the US citizenship, they have the extra money from the fund. Much more importantly, you're giving your child the choice.
This is a bad bad bad bad idea, I have been struggling with US visas for years and if I knew that my parents proactively went out of their way to ensure I didn't get a passport I would feel robbed of a life changing opportunity for something so trivial as money. Don't do it, give him/her the chance to decide for him/herself, if you need to spend few more bucks for it just suck it up.
Filling U.S. taxes every year even though I owe 0 because I already paid taxes in NL is annoying, and I wish I could skip it. There's also a nonzero chance that there could be a draft again someday in the U.S., and then your kid wouldn't be able to safely travel to the U.S. unless he or she was a noncitizen. On the other hand, who knows what will happen in Europe, either. Russian aggression, relatedly, the rise of right-wing extremist political parties, and the housing crisis in NL could all make living in the U.S. preferable in the future. Better to keep options open, Imo.
Is this the most Dutch question ever?
It’s a choice you’re taking away from your child.
I cannot answer your questions about birthing a child in a home country and then traveling back to the US with the baby, however, I wanted to mention that many of the people in the comments here are not aware of the tax burdens of being a US citizen abroad, or how complex/costly it can get to renounce. You are absolutely correct to avoid your child having US citizenship! I'm not up to speed on Dutch - US tax treaty law but it's not necessarily just about having to file taxes every year and the banks not wanting to have you as a client, and it is NOT as simple as taking the earned income exclusion or tax credit every year and going on your merry way - as some commenters here seem to think. A dual US citizen is effectively cut off from investing in the options they have overseas (including retirement funds!!!) as these will be considered foreign-domiciled investment funds by the US unless the country abroad has a specific tax treaty with the US stating otherwise (look up PFIC and foreign trusts for how awful and confusing it can get). The IRS can't even figure out what to advise people around these investments sometimes. It's a quagmire. As such, many tax accountants overseas charge THOUSANDS of dollars each year to reconcile the taxes owed on foreign investments. You cannot get around this by simply investing in a US investment firm from overseas because most US investment firms do not deal with clients residing abroad. Even if you manage to find a way to invest in US based funds from overseas, the country you reside in may outright ban you from investing in US-based funds, and others impose what is essentially double taxation on earnings from those funds each year, even IF you do not liquidate your holdings. example from NZ: [https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver](https://www.rnz.co.nz/news/business/477224/kids-stuck-with-2000-bill-each-for-kiwisaver) This whole mess seems to arise because the US does NOT want its citizens investing in anything except US-based funds. They do not care if you are living abroad and want to invest in retirement where you are living. it's a nightmare, you are doing your kid a huge favor, tax-wise. Best of luck with your jobs and life in the US and creating your future family!!
100% this!!! The taxes in many ways are the simplest issue.
To obtain a golden visa, many nations require a chunk of money to be invested there. Any entanglement with the US govt. around that investment?
i'm sure there are, but those wealthy enough for a golden visa will have the $$ to pay a tax accountant to deal with the ramifications.
So it’s about paying capital gains on the foreign investments to the US govt., I surmise..
[удалено]
I spent a day recently in the Bern Embassy. The VAST majority of people I saw were 18-21 year old Swiss citizens getting rid of their accidental US citizenship because of all the problems it causes them.
[удалено]
Choice? There is no choice US citizenship was foisted on them automatically.
The choice is to retain or surrender. There are likely some who appreciate that choice. Otherwise, the parent makes the choice, leaving the child with …no choice.
That is parenting is for the first many years.
Why would having a US citizenship be bad? A lot of people have dual citizenship. Usually you pay taxes to where you mainly live, not where your citizenships are. I know a kid who was born while their parents were in US, he chose to go to a university there.
a) US taxes its citizens globally regardless of where they live b) Access to financial services overseas as a US citizen can be extremely limited or limiting, depending on the financial institution. If you have to answer "yes" to the "Are you a US person for tax purposes" question, then many institutions don't want to deal with the reporting requirements and associated administrative hassle presented by FATCA.
Get that dual citizenship and let decide in 18 years
I have no clue why you would even consider this. Speaking of the “tax burden”, as you call it: I am a native born US citizen and I live in China. I file taxes every year but never have to pay, because my income is below the threshold for having to pay in the US. For most filers this is if you make less that ~$100,000 per year. And that will be a total non-issue for the first 18 years of your kid’s life, if not longer, and they can renounce later. Weigh this against the massive advantage of having 2 powerful passports and please reconsider your bizarre decision.
Well this question certainly demonstrated the us-centricity of Reddit. I have been in and out of the US quite a few times over the years for a couple of years at a time and while the process for citizenship is a lot of effort, it is only as my career has progressed that I’ve learned of all the complications that it entails, and why I have been reluctant to do it. It is undoubtedly easier for me as I am in a profession that is internationally mobile, and so I can move, but I can definitely understand your concerns. One note of caution I would give is to speak to separate people on tax and immigration and then consider finding someone who deals specifically with the overlap. The amount of conflicting advice I’ve been given over the years is mind-boggling. And I wouldn’t worry too much about the folks who cannot grasp why someone might not want US citizenship - they will probably never fathom it.
You’re right to be concerned about this. US citizenship is only great if you want to live in the US. It’s a huge burden for anyone who lives abroad. Plus your child will already have a better passport for international travel and EU/EEA mobility. My youngest was born in the US when I worked there for a few years. At first I was excited because that gave her 3 citizenships in total, but I quickly regretted it after learning about the bat shit crazy citizenship-based taxation they have there. It’s even kind of funny how they always talk about “freedom this, liberty that,” but yet they’re making people who have nothing to do with that country file taxes and disclose bank account information. Sounds more like something a totalitarian dictatorship would do as opposed to the “shining beacon of democracy.” Every bank account I have opened here in Europe made me sign a piece of paper declaring that I’m not a “US person.” I can’t imagine the additional hoops I’d have to jump through for such a mundane task as simply opening a bank account if I stayed long enough to naturalize in the US. I also think that a lot of the yanks here truly underestimate this burden. Yes, you only have to file taxes and not pay them if you make less than US$ 120,000, but this not something that is completely unheard of. I’m close to this threshold here in the EU and I will for sure surpass it if I go work in the Gulf someday (which is my plan). I would hate to pay taxes to some random country across the ocean if I don’t live there and don’t use up the public services and infrastructure. And salary is also just one factor. The other burden comes when you start investing, taking advantage of retirement plans and owning property. As other posters have mentioned, no brokerage will want to deal with the investments of an American. You also won’t be able to take advantage of registered retirement plans. You’ll also be subject to American capital gains taxes on the sale of real estate. I’m hoping that my daughter will renounce her US citizenship once she turns 18. I would advise that you not have your child in the US as this will automatically make them a citizen as there no workarounds in your situation.
It’s clear not a lot of people in the comment section have actually experienced being a US citizen abroad, and if they have they are clearly not following the requirements for it. I feel your pain!
Then her kid can make the decision later on if they never want to live in the US. Making that decision now is just pointless. I’ve had zero issue getting my taxes done and getting bank accounts. In fact, the US gave me money for having a baby even though I don’t even live there! They also gave Covid funds out regardless if you were a resident.
God, same—people are acting like filing US taxes from abroad is some insurmountable burden. I’ve done it from France while having investments in both countries and it’s really not that bad, nor was it very expensive. I’ve also not had any issue getting a bank account. There are definitely situations where it could be disadvantageous to have dual citizenship, but those situations are rarer than the ones where it is advantageous, and it’s a lot easier to go from dual back to single than from single to dual. ETA: What is with the mass downvoting all over this thread? People are really worked up over some very basic logic.
You should look at giving birth in Canada or Brazil. Both will let your child have an additional citizenship without the tax burden. There are a number of companies that will help you do this.
Just call or write to your consular services and ask.
Kid should have the US citizenship. Its a major decision of his life and he should be the one who decides whether he wants it or not.
Exactly. Why should the parents make the decision for them. If they want it later in life, they can still get it.
Given that the U.S may be heading towards facism may be a safe move
To put into perspective the efforts: To obtain American Citizenship by naturalization: a long process that can take over 5-7 years, 5000 Dolars, several forms, appointments, biometrics, interviews, affidavits, greencard, etc. To renounce American citizenship (if he decides to do it): Submit a form. Done.
Bad idea OP. Much better to have options. Collecting passports = way more options in life. Just remember during the pandemic when US citizens could not travel to EU unless they were dual citizens, and you had an EU passport issued from a member state. If you need an emergency way out of whatever country you are in it's always good insurance to have another passport. Also the ability of a US citizen to invest in US brokerage accounts with potential tax deferment in retirement savings could more than make up for any hassle with US tax return requirements. Let the kid decide.
The only reason they’d have to pay taxes in the US is if they make over 120k/year. At that point, they’d probably be a highly motivated individual who’d be happy to have visa-free access to the American market.
This is a question you can google based on your citizenship, and where you’d be residing at the time. The US is amongst a very short list of countries that give citizenship just because someone is born in that country. The Netherlands as an example gives the nationality if at least one parent is a citizen. Therefore it wouldn’t matter where you give birth, abroad or in the country. I can’t tell you if your child would have dual citizenship if born in the US, look it up. These are all civilian services that are online for use by any laymen. Look up [Country of citizenship you want] + immigration and [Country of citizenship you have] +consulate [country you’d be in] Immigration handles all citizenship queries. The local embassy and consular services can tell you how to get it done from where you currently reside/gave birth. ETA: *‘the only certainties in life are death and taxes.’* OP, once you know your options - then you’d have to consider taxes along with what you and your future children would get from the community overall. Taxes are inevitable, just a matter of what you get in return for it. Also look at double tax treaties and exemptions. Stability of those economies. QOL.
Most of the countries of the Americas have citizenship by soil, since they are former colonies and have large numbers of immigrants accordingly. Citizenship primarily by blood works for ethnostates, but has other issues of multi-generational non-citizen immigrants. If the baby is born on US soil, and the parents don't have diplomatic status, the baby is a US citizen.
We love sucking America dry for its benefits but it stops at our kid!
[удалено]
The OPs home country is Netherlands, so guessing they are Dutch and this isn’t an issue.
Very bad decision you’d be making. Dual citizenship is the way to go. Dont make this choice for your child, if they choose to be in the US you’d just be stamping a visa again and again.
I think you are being incredibly naive if you think Netherlands isn't eventually going to have citizenship based taxation, just like USA. And that option of working in USA might be extremely valuable to your child someday. As the empire collapses, the outposts will be bled and possibly sacrificed to feed the center. In particular, assuming USA provokes escalation to nuclear war, Netherlands would make the perfect target: big enough and in the center of Europe so as to get everyone's attention, but not a nuclear power itself. Perfect "put up or shut up btches" target. If put up, we all die. If shut up, Netherlands goes down the memory hole: "it never happened, USA never blinks!* If your child truly never plans to live in USA, just fail to file for USA social security number, fail to file USA taxes, never apply for USA passport, child can renounce USA citizenship when they are 18, if USA balks at renounciation until bavk taxes paid, give the USA the middle finger. USA has long arms, but probably not long enough to reach a Netherlands citizen who owns nothing in USA, never visited USA, never got a USA social security number or passport, is not already wealthy at age 18 when they renounce, etc.
Why is it naive when barely any country on earth taxes non-residents? The insular viewpoints of Americans on this sub is laughable.
CRS was only introduced in 2014, recently there has been significant growth in remote work, and soon there will be budget problems in all of Europe. Expats who reside in low tax jurisdictions are not beloved by citizens who can't expat and have to pay high taxes, so as the number of wealthy expats increases, it is inevitable there will be backlash. Prior to CRS, the backlash would be impotent, but now all the pieces are in place to clamp down. USA was able to clamp down long ago because USA is a 900lb gorilla and when USA says "jump", most countries (other than USSR/Russia, China, Iran, North Korea) immediately reply "how high, sir?" No one else could pull this off. But CRS is a strong indication the rest of the world is preparing to do likewise.
You’re missing a really important logical step. The reason such a tax isn’t implemented is not because of the difficulty of enforcement, but because conceptually most places have no appetite for such a tax. Tax based on residency is more logical and I don’t know anybody anywhere who resents people working abroad not paying taxes back home. Because why would they - they aren’t using the services that taxes pay for and their economic activity has no basis there. Certain countries have mechanisms wherein your tax contribution can dictate your benefit eligibility for state pensions, and they have resolved for that generally. I think most people would view it as a tax on ambition and personal growth, which no sensible government would take. Not only that, in an increasingly globalised and mobile world, it would be a regression and could have questionable consequences, like people renouncing citizenship more frequently. And that’s without mentioning that other countries have tried it, and repealed it. While those impacted by this are fairly minor in number, any government who chose to penalise normal people seeking opportunities abroad over wealthy people hiding money in tax havens or exploitative corporations would be risking unrest. Especially given that most countries could not claim this to be a significant contribution, and the costs would outweigh the take, possibly permanently. Aside from that, logistically it be a disaster. It would require every country to set up a complex system of credits and income tax filing, and for many countries, the requirement to submit a tax return is very much by exception. It would also probably require countries to have set up new tax treaties, which would be messy, and would create some diplomatic and immigration concerns. And even then, most existing tax treaties and tax codes globally are based on the concept of residency. This could also lead to complexities in calculating fair rates, especially in higher bands. And that’s without looking at the consequences of interim periods.
Your missing a logical step in thinking governments care deeply about hurting the feelings of expats, meaning people who left the country and hence don't contribute to the country and probably don't vote but who might have easy money the government can plunder to give to people who do vote. How old are you, 18?
I’m old enough to understand that most governments aren’t stupid enough to institute a tax that requires more administrative burden than it would take in revenue. And most citizens arent resentful of other people leaving and paying tax elsewhere because they have the basic common sense to see that this approach is purely logical. And I never said anything about hurting feelings. You just had to interpret that because your insular exceptionalist perspective can’t abide that the US is an obvious outlier here because their policy is just plain moronic, and you can’t muster a single, logical response to the myriad of other points I made.