topic Relinquishing Citizenship in Retirement tax questions

Relinquishing Citizenship

tpgrogan — Mon, 12 May 2025 18:57:06 GMT

I relinquished my citizenship last week. I have not been in the U.S. any day this year. I am a noncovered expatriate on form 8854.

My question relates to my 1040NR. Everything I have read from the IRS states 'covered' expatriates must file a split year return. Please see below. Since it specifically states covered expatriates many times does that mean my filing requirement is different as a non-covered expatriate.

B. Income tax returns

Initial filing obligations for the year of expatriation. A covered expatriate must file a dual-status return if he or she was a U.S. citizen or long-term resident for only part of the taxable year that includes the day before the expatriation date. A dual-status return requires the covered expatriate to file a Form 1040NR with a Form 1040 attached as a schedule. See Treas. Reg. § 1.6012-1(b)(2)(ii)(b), Treas. Reg. § 1.871-13, and chapter 6 of IRS Publication 519 for the requirements for filing a dual-status return. If the covered expatriate’s expatriation date is January 1, then he or she will not be required to file a dual-status return.

Thank you

Re: Relinquishing Citizenship

M-MTax — Mon, 12 May 2025 19:13:45 GMT

You need to consult with a tax attorney who has experience in handling U.S. citizens who renounce their U.S. citizenship.

TurboTax does not support Form 1040-NR (although Sprintax does).

See https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-forms/turbotax-handle-form-1040-nr-nonresident-aliens/L6XqFCkC3_US_en_US

Essentially, however, the primary difference between "covered" and "non-covered" is whether you owe the "exit tax" (which is primarily based on your net worth and past 5-year tax liability).

Re: Relinquishing Citizenship

Opus 17 — Mon, 12 May 2025 19:32:55 GMT

The best person to help you on this board will be @pk

In general, you would only need to file a 1040-NR to report and pay US tax on income that was US-sourced but paid to you after you expatriated. You do not need to report foreign income on a 1040-NR. Sourcing of income is described here.

https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens-sourcing-of-income

So you need a form 1040 that reports and pays tax on all your world-wide income from 1/1/25 through the relinquish date, and a form 1040-NR that reports and pays US tax on only US-source income paid after the relinquish date, if you have any. The instructions say to file the 1040-NR with the form 1040 as an attachment.

Turbotax does not handle this situation. It can prepare the 1040, but not the 1040-NR, and it can't file for you. You might be able to use Turbotax to prepare the 1040 portion, then have someone else prepare the 1040-NR, then combine them and mail them together. Or see a tax pro who can help you.

Re: Relinquishing Citizenship

M-MTax — Tue, 13 May 2025 16:02:26 GMT

It can prepare the 1040, but not the 1040-NR, and it can't file for you. You might be able to use Turbotax to prepare the 1040 portion, then have someone else prepare the 1040-NR

But note that you will not be able to e-file your return, you will need a U.S. credit or debit card to pay for the TurboTax software, and you will need a U.S. bank account if you are getting a refund.