If you've been filing for the past 5 years then you might as well go through with the whole 8854 business now, but for the benefit of others reading this, most people in your situation renounce without any tax compliance and ignore the exit procedure. The IRS doesn't care.

 

Yes I'm compliant with the IRS, which was quite a burden, so I would rather be compliant till the end at this point.

 

If your renunciation date is in December, I would just go ahead and file your last 1040 return for 2024 and then file the 8854 as of December 31. Somewhere, buried in the instructions, I seem to recall having seen an instruction that you don't have to file the 1040NR if you wouldn't have needed to file a 1040NR at all (i.e. you have no US sourced income that hasn't been withheld appropriately).

I renounced in early January and so filed my "final" return for the year prior, then the 8854 at the end of the year in which I actually renounced. (I could have, I suppose, have filed that as of Dec 31st of that prior year.)

Never heard any complaints or problems about doing things that way, and I'm sure you will still be considered "compliant" if you treat things that way.

 

Thank you for your reply. I also recall seeing this information. I saw so many conflicting information on this topic that it's hard to make decision. In the end, if you never heard any problems, I think that would be the appropriate way to do things.

 

I seem to recall having seen an instruction that you don't have to file the 1040NR if you wouldn't have needed to file a 1040NR at all (i.e. you have no US sourced income that hasn't been withheld appropriately).

Its in the instructions for form 8854, page 3 if you are following along, under When to File.

I have a soft spot for Bevs suggestion of just filing a 1040 and attaching the 8854 to it when you file your 2024 return.

That said, if you have no US sourced income and your US tax liability on your foreign income up to the date you expatriated will be zero (either though use of foreign tax credits, earned income exclusion or both) then a dual status return is really quite straight forward.

The only gotcha can be the loss of the standard deduction - particularly if you have passive income and have tended to rely solely on the FEIE or have income that is not taxed or is concessionally taxed in (I presume from your flag) France.

But if you only have foreign earned income, and that is below the threshold, then because it is an income reduction (ie it affects your adjusted gross income) then the loss of the standard deduction will have no effect, because your AGI will be zero.