Avoiding Double Taxation

I’m in a little of a unique situation, so any help would be greatly appreciated. I have dual citizenship (Sweden & US (naturalized)), so I know I don’t have to worry about a work permit, but what worries me is the double taxation that we may encounter if we move to the UK. By the way, my wife is a citizen of another country, but a permanent resident of the US.

I understand that there probably is no way out of having to file US federal returns for the rest of my life, is that correct? I haven’t accumulated enough credits for Social Security yet, but I’m getting close. When filing, is the $80,000 limit per person, or per household? If you were ever to make more than this amount, is there any way not to pay taxes twice?

I read about domicile on the site, but I’m a little bit confused. I probably have more roots in Sweden since I really don’t have any family in the US, but I would like to continue to vote, and things like that. What tax implications are there based on the domicile? If living permanently in the UK, wouldn’t that be it though?

Also, is there any way that I wouldn’t have to pay state taxes? We live in a tax that taxes income, and we wouldn’t be able to establish ourselves in a “tax-free” state before we would move, so how would one go about that? It just seems silly that we would have to pay state taxes when you would be living on a permanent basis in another country. I would appreciate any input. Thank you.

I believe all those questions have been answered elsewhere on this web site, with the exception of state income tax, which is a bit of a gray area, so I will tell you what I know.

I moved to the UK last week from Maryland, a state which taxes all income no matter where it was earned.  But I will never live in Maryland again, and I have no property or possessions there, and will not vote there or try to renew that driver's license, so I am no longer a Maryland resident and will not pay taxes to that state as of last week.  That is how I am handling my situation. 

Jim

Thank you Jim, that helps a lot. We are in Ohio, and hopefully it’s similar there. I tried to verify this information via their website, but they didn’t have a clear answer.

I also wondered something else. Unless my wife obtains citizenship before we move, she will lose her permanent residency if she’s out of the US for more than six months. Would it be a correct assumption then that I would be the only one that would be required to file a US tax return at that point?

I could not begin to answer that question, except to say I hope the answer is here:  http://www.irs.gov/publications/p519/ch01.html#d0e468

Jim