Americans abroad can’t invest normally — and I worry my children will pay the price

“It feels like Americans abroad are left with no normal way to invest.”

— Emberleigh, an American currently living in Mexico

Dear Congress,

Americans abroad can’t invest normally without running into complicated U.S. tax rules, and that makes it really hard to save for retirement where we live. I have lived in Mexico since my early 20s, and I legitimately lose sleep at night wondering what these rules will mean for my dual-citizen children when they are adults.

I am from North Carolina but I have lived in Mexico since my early 20s, and I really struggle with PFIC rules and excise taxes on investing abroad because they make it really hard to save for retirement where I live.

No normal way to invest

We cannot easily invest in U.S. mutual funds if we live abroad, but we also cannot simply invest in mutual funds locally without potentially facing punitive PFIC tax and reporting rules. It feels like Americans abroad are left with no normal way to invest.

I also will never understand what authority the U.S. government should have over foreign property, whether from rental income or the sale of a property. Anything related to real estate should be 100% the responsibility of the country where that property, sale or rental income is located. The U.S. should not be allowed to tax that simply because the owner is a U.S. citizen.

I legitimately lose sleep at night wondering what my dual-citizen children will do when they are adults, or whether they will eventually feel like they have to renounce their U.S. citizenship just to live normal lives.

Freedom to build a life abroad

It is a shame that the land of the “free” can financially imprison its citizens abroad. Canadians have more freedom when they move abroad than Americans do. Americans should also have the freedom to build normal financial lives outside the United States without carrying a second tax and reporting system with them everywhere they go.

Donald Trump promised during the 2024 campaign to address double taxation for Americans abroad, yet we are still waiting for meaningful reform.

I do not want my children to have to choose between their U.S. citizenship and living normal lives. I want them to be able to save, invest, own property and build their futures without being punished simply because they live outside the United States.

Please pass residence-based taxation.

Sincerely,

Emberleigh in Mexico

Photograph: Chris Luengas / Pexels. Modified with AI.

Editor’s note: The writer is using a pseudonym to protect her privacy.