Abandoning Your Green Card – A Guide

What is a Green Card?

A Green Card allows individuals to live and work inside the US permanently. With a Green Card, you do not need to go through the hassle of applying for work or residency visas. You are already considered a permanent resident of the US. In the eyes of tax law, a Green Card is similar to citizenship. Meaning your worldwide income is subject to US taxation. However, just like a citizenship, you will need to renounce or abandon your Green Card if you’d like to avoid US taxes.

Having a Green Card is the dream when you’re living and working in the US. However, what happens after you move back to your home country? Well, that’s where you could have some issues especially if you forget to abandon your Green Card before leaving.

Yes, you’d think it is done automatically after your card has expired; however, that is not the case. If you have a Green Card registered with the US government, you must file a form stating you have renounced your Green Card, or you will be required to file US taxes. 

How do you Abandon your Green Card? 

Renouncing your Green Card is also known as abandoning your residency status with the US. You must file Form I-407, which is an application for abandonment. Form I-407 can be filed in any country with the US embassy or with the US immigration office. You also have the option of sending a letter to abandon residency status with your Green Card enclosed in the letter. However, it is highly recommended that this is done at any US embassy or official office. 

Whatever you do, make sure to keep a documented copy of your I-407 Form or letter, Green Card, and postal information. It could be needed as proof that you are no longer a Green Card Holder.

Forgot to abandon your Green Card? 

If you did not abandon your Green Card, you’ll be treated as any US citizen in regard to filing US taxes. Now that you’re earning from abroad, you will need to report your worldwide income to the IRS and ensure you file your FBARs. You can do this using the MyExpatTaxes software, including income tax returns and FBARs. 

Not knowing you must file US taxes abroad is a common mistake for many Green Card Holders and US citizens. There are procedures you can use to catch up on missed tax returns, and there are tax benefits to nearly eliminate double taxation. It is not as scary as it may seem, but it is a responsibility, so do not avoid it.

If you do not file US taxes when you are obligated to, you could face hefty fines from the IRS. Therefore, if you haven’t abandoned your Green Card, let’s do it as soon as possible and be rid of US taxes forever. 

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