Digital Nomad Taxes: How To LEGALLY Avoid Income Taxes While Traveling
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- Опубліковано 5 вер 2024
- Are you a digital nomad or remote worker that's looking to avoid taxes while traveling or living overseas? If so, then here is how to pay zero dollars in taxes (legally!)
IRS Link: www.irs.gov/in...
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👉🏻 Want to learn more about the FEIE directly from the IRS? Click here: IRS Link: www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion
Thanks for sharing this info about FEIE Mike!
Thanks for your support buddy!
Is this just for America? Australia has a draconian aggressive tax dept so I doubt it applies here
Thanks, Mike. Is there a service or specific accountant that you use you could recommend?
Hey Eric - it really depends on what you are looking for, but here is what I suggest:
For personal taxes, I would suggest: www.greenbacktaxservices.com
For Business Taxes: beanninjas.com
It seems that a digital nomad, who may be a sole proprietor or have an LLC, pays themselves through that US-based entity even if they are living abroad. How does that classify as "foreign earned" income? It seems this exemption really only works for people who are employed by a foreign entity and living abroad.
Not financial advice. Please consult with a tax advisor like GreenBack taxes. But you can set up an s-corp or if you have US income it usually qualifies, but everyone’s situation is unique
It is foreign earned because of your physical location even if the source is a US employer or client. This works well because most foreign countries do not tax you on income sourced outside their country even if your physically in that country.
Thoughts on having home base in Puerto Rico 7 months and abroad 5 months ? Then you crypto and stock gains would be tax free + business dividends
That sounds like a great structure and I have a few friends who do the same thing!
OOOTTOO REAAAL MOON!
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Hi Mike! Do you know about setting up an LLC in the US and getting all the income from the Philippines? Having a hard time searching how to set this up...
Hey Jesse - I highly suggest consulting with an Expat Tax company or CPA, but self-employed or entrepreneurs create an LLC and pay themselves a salary. www.legalzoom.com/articles/how-to-pay-yourself-in-an-llc
*Not tax or financial advice
If you’re earning income from a local business in the Philippines you would likely pay taxes there, assuming you’re eligible to work in that country.
Hi Mike- what type of proof is needed to submit the info to the govt?
Normally it’s just the dates that you were overseas, you can read more about it here!
www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion
so this only applies to Americans?
Yes, but a lot of countries have even more loose tax laws and something similar occasionally
@@MikeSwigunski can u do this for canadians wanting to live in asia. Where there would work
I'm sad this is only for Americans :( But good info!!
Depending on where you earn your money, some countries also have similar and less strict incentives! :)
You’re probably better off if you’re not American. US is one of two countries in the world that tax on citizenship as opposed to residence. The FEIE is a huge benefit though for Americans with salaries not too much above the exclusion limit.
It cuts both ways. The biggest draw as an American is access to higher-paying jobs than almost everywhere else. Canadians might have it even better since they only need to be outside of Canadian just over half the year, and would still have access to higher paying jobs than the rest of the world. @@chriso5842
As far as I can tell, this rule only applies to income coming from abroad. If you are a digital nomad living abroad while working remotely for a US company, this rule does not apply.
Close, but you have it flipped around. Non-taxable US income if you meet the FEIE requirements.
*Not financial advice, consult a professional
**source: been doing this for 10 years and every long term nomad does this.
***source 2: www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test
As long as you pass one of the two FEIE tests you’re good. Even for W-2 employees. Perhaps the logic is you are not benefiting from public facilities while living abroad. You would still pay employment taxes. 15.3% for self employed and half that for W-2. For self employed, setting up an LLC with s-Corp taxation could lower your employment taxes.
A few of us are not from the US. Hard to believe, I know.
Appreciate the feedback, but can’t make tax videos for EVERY country Keith ;-) most countries have some similar structures though which is pretty much evergreen advice
@@MikeSwigunski hey Mike, I think what I was trying to say was that it would save us all time if US digital nomads put "For US tax payers" (or similar) on their video titles or even the description. I've seen some of your other videos and they're good so I clicked on this. But now I am less likely to watch more. Does that make sense?
@@KeithLangOnline yeah, it totatlly does...unfortunately this was the BEST search term for gaining more SEO reach. Will definitely consider that in the future though :-) Thanks
This is messed up. American should not be enjoying places they give nothing back to. I am happy to travel and pay taxes along the way out of respect for the countries I visit and love.
What countries have you ever filed taxes in when traveling? And why do you assume American Expats give "nothing back" for example, one expat can invest 5-10x more money into the local economy (compared to locals) just with their monthly expat expenses, it's why governments around the globe are trying to attract high earning remote workers!
You spend money when you travel thus boosting the local economy! They just don’t want you to displace local jobs from their citizens. Win win.