Digital Nomad Taxes: A Practical Guide
Taxes are one of the most confusing aspects of the digital nomad lifestyle. Here's what you need to know.
US Citizens: You're Still on the Hook
Unlike most countries, the US taxes its citizens on worldwide income regardless of where they live. Yes, even if you haven't stepped foot in the US for years.
Key Tax Benefits
#Foreign Earned Income Exclusion (FEIE)
If you meet the Physical Presence Test (330 days outside the US in a 12-month period) or Bona Fide Residence Test, you can exclude up to $126,500 (2024) of foreign earned income.
#Foreign Housing Exclusion
You can also exclude or deduct certain housing expenses above a base amount.
Important Considerations
1. Self-employment tax still applies: FEIE doesn't exempt you from SE tax
2. State taxes vary: Some states (CA, NY) are aggressive about taxing former residents
3. Keep meticulous records: Travel dates, income sources, expenses
Virtual Mailbox: Essential Tool
A virtual mailbox gives you:
• A permanent US address for tax documents
• Mail scanning and forwarding
• Package receiving
Popular options: US Global Mail, Traveling Mailbox, Earth Class Mail
Get Professional Help
Tax laws are complex and change frequently. Consider:
• A CPA experienced with expat taxes
• Services like Greenback or Bright!Tax
• Proper record-keeping from day one
*Disclaimer: This is general information, not tax advice. Consult a qualified professional for your specific situation.*
Unlike most countries, the US taxes its citizens on worldwide income regardless of where they live. Yes, even if you haven't stepped foot in the US for years.
Key Tax Benefits
#Foreign Earned Income Exclusion (FEIE)
If you meet the Physical Presence Test (330 days outside the US in a 12-month period) or Bona Fide Residence Test, you can exclude up to $126,500 (2024) of foreign earned income.
#Foreign Housing Exclusion
You can also exclude or deduct certain housing expenses above a base amount.
Important Considerations
1. Self-employment tax still applies: FEIE doesn't exempt you from SE tax
2. State taxes vary: Some states (CA, NY) are aggressive about taxing former residents
3. Keep meticulous records: Travel dates, income sources, expenses
Virtual Mailbox: Essential Tool
A virtual mailbox gives you:
• A permanent US address for tax documents
• Mail scanning and forwarding
• Package receiving
Popular options: US Global Mail, Traveling Mailbox, Earth Class Mail
Get Professional Help
Tax laws are complex and change frequently. Consider:
• A CPA experienced with expat taxes
• Services like Greenback or Bright!Tax
• Proper record-keeping from day one
*Disclaimer: This is general information, not tax advice. Consult a qualified professional for your specific situation.*
If you meet the Physical Presence Test (330 days outside the US in a 12-month period) or Bona Fide Residence Test, you can exclude up to $126,500 (2024) of foreign earned income.
#
Foreign Housing Exclusion
You can also exclude or deduct certain housing expenses above a base amount.
Important Considerations
1. Self-employment tax still applies: FEIE doesn't exempt you from SE tax
2. State taxes vary: Some states (CA, NY) are aggressive about taxing former residents
3. Keep meticulous records: Travel dates, income sources, expenses
Virtual Mailbox: Essential Tool
A virtual mailbox gives you:
• A permanent US address for tax documents
• Mail scanning and forwarding
• Package receiving
Popular options: US Global Mail, Traveling Mailbox, Earth Class Mail
Get Professional Help
Tax laws are complex and change frequently. Consider:
• A CPA experienced with expat taxes
• Services like Greenback or Bright!Tax
• Proper record-keeping from day one
*Disclaimer: This is general information, not tax advice. Consult a qualified professional for your specific situation.*
1. Self-employment tax still applies: FEIE doesn't exempt you from SE tax
2. State taxes vary: Some states (CA, NY) are aggressive about taxing former residents
3. Keep meticulous records: Travel dates, income sources, expenses
Virtual Mailbox: Essential Tool
A virtual mailbox gives you:
• A permanent US address for tax documents
• Mail scanning and forwarding
• Package receiving
Popular options: US Global Mail, Traveling Mailbox, Earth Class Mail
Get Professional Help
Tax laws are complex and change frequently. Consider:
• A CPA experienced with expat taxes
• Services like Greenback or Bright!Tax
• Proper record-keeping from day one
*Disclaimer: This is general information, not tax advice. Consult a qualified professional for your specific situation.*
Tax laws are complex and change frequently. Consider:
• A CPA experienced with expat taxes
• Services like Greenback or Bright!Tax
• Proper record-keeping from day one
*Disclaimer: This is general information, not tax advice. Consult a qualified professional for your specific situation.*