American retirees abroad

Tax Residency Profile: Tax residents of the United States and possibly tax residents of another country

Income Profile: US source income


It is becoming increasingly difficult to retire and afford to live in North America. As a result, there are a number of Canadians and Americans who believe that their money can go further if they live abroad. To be clear, these are people who:

1. Receive their income from US sources (pension, Social Security, etc.)

2. Live outside the United States on their US source income.

Although they live in abroad they do NOT work abroad and may NOT be “tax residents” of their country of residence. Alternatively if they are “tax residents” of other countries all of their income is US source.

“Retirees abroad” often are ONLY US citizens and neither can nor wish to renounce US citizenship. They continue to file US tax returns as though they actually lived in the United States. Retirees abroad have little interest in tax reform and probably would not benefit from it. In fact, they would be “worse off” if they were taxed as nonresident aliens.