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  • The Trend of Ditching U.S. Passports Continues

    This time last year we reported that about 3,000 US citizens decided to give up their passports and renounce their US citizenship in 2013. That marked a huge jump from the previous year, when less than 1,000 people decided to give up their US citizenship. Amazingly, the numbers this year are even higher.

    Trend of Ditching U.S. Passports ContinuesAccording to CNN, in 2014 a total of 3,415 people decided to give up their US citizenship. That marks a 14% increase from 2013 and is fifteen times higher than the number of passports given up in 2008.

    Why are Americans ditching passports? In most cases, the reason is taxes.

    Most of the people who decided to give up their US citizenship last year were dual citizens of the United States and another country. Unfortunately, if you are a US citizen and a citizen somewhere else, the US makes you pay taxes on your income regardless of where you earned it. A new law was put into place last year, the Foreign Accounts Tax Compliance Act, was designed to catch people who might be cheating on their taxes. The law requires that individuals report certain foreign assets and also requires banks to disclose foreign accounts held by Americans.

    What this means for a lot of people with dual citizenship is that they end up paying taxes twice. And the process for paying US and foreign taxes isn’t exactly simple. In addition to the financial burden, there’s a lot of paperwork that goes along with filing two sets of taxes, and being a dual citizen can make you more prone to getting audited.

    For some Americans, the burden is simply too high, which is why we’ve seen an increase in the number of relinquished passports over the last few years.

    On the positive side, the number of Americans who hold passports overall has continued to go up significantly in recent years. These days about 46% of US citizens hold valid US passports. That figure doesn’t include passport cards and excludes undocumented residents and legal permanent residents. Over the last ten years, the State Department has issued 133,959,114 passports. So in the big scheme of things, having about 3,000 Americans ditch their passports every year is just a drop in the bucket. That said, were still sad to see them go.

    If it’s time to renew your passport, or if you want to try to bump that 46% up to a record 47%, contact Swift to learn more about our expedited passport services.

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