kfqbmsljijyklm I thought the FEIE offsets the US tax burden then you have to pay the tax of whatever country you live in, and you then use tax credits to try to offset those taxes in that other country.. Do I have this backwards?

people in UAE, certain Cantons of Switzerland

FEIE is different from FTC, but both are US tax credits for your US tax burden.

ilhecvsvclgxej but this is only calculating the US taxes. What about the taxes of the country you’re living in…

Like let’s say you move to Mexico. Mexico taxes are 30%

If you're paying taxes in Mexico, then between FTC and FEIE I think you would probably pay zero income taxes in the US.

This community is for nomads. In general, most nomads don't establish tax residency anywhere. Most questions about taxes here are likely to be answered in that context.

wafhxvzm if you want to be a long-term resident in the foreign country of your choice rather than nomading around and still pay low taxes that dramatically limits your options.

You can basically choose:
• Fully income tax-free countries
• Countries with taxes where you can work remotely and not be taxed due to your visa status
Here's some income tax free countries:
• Anguilla zero-tax.
• Antigua & Barbuda zero-tax.
• Bahamas zero-tax.
• Bahrain zero-tax.
• Bermuda zero-tax.
• British Virgin Islands There is a zero-rated income tax regime for all BVI individuals and domiciled unincorporated entities.
• Brunei Darussalam Although the Income Tax Act provides for the taxation of income derived by individuals, such income is exempt from tax under the second schedule of the act.
• Cayman Islands zero-tax.
• Kuwait There is no personal income tax (employment tax) in Kuwait.
• Oman zero-tax.
• Qatar Qatar does not impose personal income taxation; only income from a business in Qatar is taxable.
• Saudi Arabia There is no personal income tax (employment tax) in Saudi Arabia; however, nonresidents conducting business in the Kingdom or deriving income from a PE in Saudi Arabia are taxed as described above under “Corporate taxation.”
• St. Kitts & Nevis zero-tax.
• United Arab Emirates zero-tax.
Mostly Caribbean islands and countries in the middle east.

On the flip-side, there are countries where you can live long term that do tax normal residents but wouldn't tax your remote work. Usually the theme here is that your visa should _not_ come with work authorization (e.g. the country's tax authority has no reason to look into / come after you).

Some examples of those are:
• Thailand Elite Visa
• Malaysia MM2H
• Mexico's Temporary Resident Visa without work authorization
• Philippines extending a tourist visa indefinitely
In practice there are a lot more countries where you can get repeated back-to-back-to-back tourist visas and essentially live there year round whereby the country's tax collectors won't come after you. Usually these are developing countries where many of the regular citizens also don't bother paying taxes

sdz cpzrnnnrntdwds I thought I would have to become a tax resident of a country/be there for at least 183 days in order to get the FEIE?

Nope, there is nothing in the tax code about having to be a tax resident or pay taxes elsewhere to qualify for FEIE.

Oh wow so you just need to be outside the US for 183 days or 330 days to claim FEIE?

The wording is (paraphrasing) "present in a foreign country for 330 days"

This is critical in understanding the rule, because it means that international waters, Antarctica, and a few other places don't count.

I suggest you read up more on Google. There are plenty of resources.

Oh wow yeah I am reading it now. I thought it meant you have to be in a specific country for 330 days outside of the US, what it actually says

A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

As long as you're "physically present in a foreign country for 330 full days"

It's an important distinction because (as vji mentioned) international waters don't count, restricted countries don't count, and time transiting in and out of the US must be monitored as well.

But yes. That's the gist

jwovkpmfvm What would you say is the most efficient way to save on taxes if I wanted to live in the US for 6 months per year and spend the rest oversees?

Worth mentioning that if you do become a tax citizen in another country, you might be elegible for the www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test|Bona Fide Residence> which is different than the 330 day physical presence test.

In my case, I was able to get to ~15% with a mix of FEIE and Colombian tax law setup.

giajqwky So how many days are you allowed to spend in the US each year now that you’re eligible for the bona fide residence?

kuxeyvgn I haven’t come across a cut and dry answer to that on the IRS website (maybe someone knows!!!), but it seems to be ~3-4months

6 months in the US doesn’t currently get you much unless you get residency in another country like fnlkivny said… but even then spending half your time in the US might jeopardize your FEIE claim

tktpuxjt So to get Bona fide residence you had to do 12 months in Columbia then after that you’re allowed to only be there 183 days per year?

As nomadtax said, there's no benefit to 6 months per year abroad.

Only minor optimization that could be done is if your 6 months in the US is nomading around in Airbnbs/hotels/friends+relatives rather than owning property / having a lease, in which case you could setup your state residency in a no-tax state and then fly under the radar for time you do spend in other income-tax states (this is tax evasion by letter-of-the-law but frequently done).

Unlike other countries with tax residency by 183+ days in-country, in the US they don't care about that. No special status whatsoever for half the year abroad

gnfkbxuztzvenz but once you’re a bone fied resident you only have to spend 183 days abroad right?

aevmgxez if you are a bonafide resident as `togume` said, `...haven't come across a cut and dry answer to that on the IRS website (maybe someone knows!!!), but it seems to be ~3-4months`

So that would imply 8-9 months abroad, 3-4 months in the US.

And to be a bonafide resident, you have to indicate to the IRS that you never told that other government that you weren't a resident of their country for tax purposes. Meaning, to be a bonafide resident you'd be paying taxes in the other country and wouldn't qualify, with say, the Thailand Elite visa, MM2H program, or just visa running with back-to-back tourist visas etc.

That gives you the problem of choosing a country which has lower taxes than the US, which is fairly difficult. Even, say, Brazil, where the maximum marginal income tax rate is 27.5%, that max rate kicks in at such low income (onward from ~12K USD yearly) that you pay more taxes to Brazil than you would the US until you are making close to $200K USD per year. So if you are trying to save money on taxes, that limits you to mostly the tax-free countries (Caribbean Islands + Middle East) which tend to be expensive to live in and not as fun/interesting as other places

So basically what you’re saying is being a nomad claiming FEIE is better than bone fied residence

That also depends. I'm a temporary resident of Mexico. I spend less than 6 months a year in Mexico, so my income isn't subject to tax there (also, it's remote not from Mexico).

It really depends on the country you get residency in

jjmaivma no, I can spend the time however I want, but as NomadTax said, one has to be careful not to go over limit that raise eyebrows.

So, your options are to get Bona Fide, which does take being out of the US for 12 months and then you can push being in the US for up to… ~3-4mo (if that’s even still correct), or just the 35 days otherwise.

Note BFR also needs to be qualified for on a calendar year for the first year

interesting

bzoltigkfqkwkq - ty for explaining - this has been the best solution in my findings as a US citizen although i am very much wanting to start gaining residency/citizenship in another country. this would mean federal taxes in the US plus whatever taxes i would need to pay becoming a resident, correct?

As a US citizen, you would still owe US taxes. However, besides the FEIE, you can get a foreign tax credit for taxes paid to another country.

Thank you! I will do more research - very much a pain

We work with small and medium sized businesses that make that much for sure.

Much ado is made about the US global taxation policy being unfair. The reality is that almost no one with a US passport is actually subject to double taxation. It does suck that you are forever required to file, but pretty much everywhere your might want residency has a tax treaty with the US to avoid double taxation. You just have fewer options for offshore tax avoidance strategies.

Ah okay but the FEIE, you have to be abroad like 330 days a year

That’s for the physical presence test, you can do the bona fide residence test instead if you want more time in the States, it’s more work though

Hey everyone! Not sure if this might be _the best_ channel to post this, but close enough.
I want to open up a single member LLC in the US (Delaware) as a foreign person, mainly to conduct business as a freelancer, convenience, etc. I’ve spoken with a couple of lawyers from my country that handle everything from registration to taxes, but their prices seem a little inflated. I’ve also seen some sites that claim to handle everything for you too and am much cheaper, but I’m kind of wary of getting issues with taxes or whatever. I guess I can handle my country’s (Argentina) side of tax and legal pretty well, so am just looking to get the US side of things handled. Anyone can recommend any platform that does this fully and where I can rest easy? Extra points if it’s fully automated and have to deal with the least bureaucracy lol

I use www.zenbusiness.com/|Zen business> for all of my Nevada LLC paperwork. I find them to be pretty reasonable on service and fees.

You should probably chat with some tax/legal experts. My understanding is that the reasons why people setup corporations in Delaware don't really apply to single member LLCs.

Personally unless I was planning on having business partners, investors, raising money, etc. I would do an out of the box service solution instead of paying the money for someone to set it up for me and do the contracts by hand.

Getting good legal and tax advice from US experts before setting up a legal entity is advisable.

look for user nomadtax who could likely help

Thxs for the answers guys, will into all these 🙂

UpCounsel offers affordable legal sessions

Check stripe atlas

I'm a US citizen based in Mexico and on the path for Mexican residency. I'm also self-employed/ a digital nomad.

What are the best-value online tax services out there that understand how to handle quarterly payments, navigate your 1st year of qualifying for FEIE, and answering nuanced questions (not just redirecting you to their FAQ, but actually talking with you through issues that may entail multiple scenarios and outcomes)?

I'm planning to use Turbotax to finish off my last year as an employee, but I'm not sure if it's the best option for my situation in 2023 and onward.

I've heard good things about Greenback, but their services seem very expensive. Then there's Taxes for Expats, but I hear customer service responds robotically and will not really walk you through nuanced questions.

Thoughts, recommendations? Cheers.

You have two choices if you want to claim the 15 days worth of FEIE in 2022. There’s a special extension to meet your 330 days, or you can file and then amend later. You can’t file for the FEIE until you get your 330 days

It says on your site Income Tax Return
Starting at $350

We have to file taxes every quarter. Does that mean it'll cost $350 each quarter?

And the form 2555 asks what my foreign address is - well I don’t have a permanent one…?

For US citizens working abroad, do you get a tax refund if you made quarterly payments and accurate estimates on time, and then later qualify for FEIE?

Example, I'll qualify for FEIE from Aug 2, 2022 to Aug 2, 2023 and onwards.
However, I have to pay quarterly taxes since I'm self-employed.
And Jan 1 - Aug 1, I don't yet qualify.
So will I only get pro-rata FEIE for the remainder of the year, or will I get a refund in the following year for my FEIE in 2023?

But I can just do it again for 2023, no?

You would get a refund if you had overpaid into the system. If you made your estimates based on not qualifying for the FEIE, then you would have overpaid and you would get a refund.

But when we (Nomad Tax) calculate estimated payments we take the FEIE into account so you hopefully don't overpay (or underpay).

I use nomadtax and can confirm their hands-on approach to customer service. But my taxes are relatively simple. More complicated taxes may require paid consultations, but hdwefadytz can probably elaborate more on their service offerings.

Interesting. Thank you.

You can claim FEIE for 2022 but the credit applies to the part of the 330-period that falls in 2022, which is 15 days. You’re talking about a % off of whatever money you made in those 15 days. In other words, you’re not getting anything close to the 22k credit you’d get off the first 120k you make in 2023. For tax purposes, all but those 15 days’ worth of income in 2022 do not apply for FEIE.

The maximum amount you could exclude for 2022 is ~$4,600. Compare that to the amount you earned from 12/15-12/31, and the lesser is the amount you could take. In the 22% tax bracket, it's up to ~$1k in tax savings if you max out, which is not insignificant. You'll just have to determine if it's worth it to you or not.

Thank you wabkjkwson - so it seems there is no issue. Thanks for clearing that up!

Hey fam - lmk if there's a better place to put this but - what do yo do about post? My business and insurance will still need an address. I used to have a rented PO that scans everything online. Any similar services?

myctlacsqe there’s many virtual mailbox services these days. I’ve been using travelingmailbox.com for many years and it’s OK. Apparently there’s better out there, so worth checking out a few.

I’ve been happy with postscanmail.com|postscanmail.com

Im curious about this as well! How does this work when receiving a piece of government mail? Or perhaps a wedding invite and you need to rsvp with something hard copy?

wnnpdmiaxjgo forwarding of physical mail is easy if needed. I’ve been able to deposit pics of check, though, and other creative uses without issue

Thanks for the recs!

I’ve been happy with Earth Class Mail for the past year.

Same as above, I can forward anything I need physically to wherever I am.

FEIE ❓ I left the US in mid March, 2023. My employer allows me to work from anywhere in the world, as long as 1.) it is less than 29 working day per country in a 365-day period and 2.) I have the legal right to work in the country. So I've been jumping from country to country, spending 6 weeks in each country for the past year. I thought I would qualified for the FEIE since I pass the Physical Presence test.. but.. I don't have a 'Tax Home' since I've never stayed in one country long enough 😞 I thought I'd qualify as 'itinerant", but my accountant says 'no'....... So questions 1.) Does anyone have a similar challenge? Have you found a solution? 2.) Can anyone recommend a good CPA who could consult with me in finding a way to establish a tax home? I mean.. it would be like $25-30K reduced tax liability, so it would be worth it to establish a tax home.. fly back one weekend a month.. spend holidays there, etc.. Thanks, everyone!

Do you happen to know what your company’s 29 day rule is based on?

You qualify as itinerant based on your story. Your tax home is wherever you're working from. I don't know why your CPA says no. They probably don't fully understand FEIE in the context of a digital nomad versus a permanent resident expat.

I use nomadtax () and they've been terrific for the past 4 years.

Hi all!! I would say the tax home question is the one we get the most, as well as the one that is least understood by accountants who don’t know the FEIE. Per the www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country|IRS website > :

_Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a "tax home" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes.

If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live. If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant and your tax home is wherever you work_.

Always happy to answer any other questions you have!

My Utah LLC used to be registered in California (when I lived there) but as of 3 years ago I moved out of state and cut all ties (no office, workers, customers, etc.). Does anyone know if I still need to fill out the LLC-12 form every 2 years?

Did you file dissolution with CA?

Yes

Then you shouldn't have to. You can always double check by looking your business up on the CA SOS website and being sure it's not active

Hello new friends, I have a US based SASS (I don’t live in the US and there’s no office/ anything physical in the US) and I’m looking to move/ create a new corporation in a tax haven (like the Bahamas, but I’m not married to it) because if you have a tapeworm parasite eating 30% of your food, why wouldn’t you take pills to exorcise it? Can anyone share any lawyer/ accountants they have experience with regarding this sort of thing please?

We work with Bobby Casey over at Global Wealth Protection for these setups

Super helpful!

Thanks everyone… SO much,! I Consulted with a Tax Attorney, who agreed that I qualify as an itinerant, so Tax home isn’t the question…. She said the issue would be abode. Since I don’t stay in a country longer than 6 weeks, the IRS could say my abode is in the US…. Kind of a wild card here. I don’t own a home or have a lease in the US… but I have a US driver license, am registered to vote, have a motorcycle that I keep insured there and pay registration on.
I have no foreign bank accounts, lease,etc. so I’m not going to take the change of claiming it this year… but I will be getting a long term digital nomad resident visa and securing a lease somewhere (Portugal?)….. and will just reside there 6 weeks out of the year… it will cost a heck of a lot less than what I will save in taxes…

Earth Class Mail is great!

I haven't seen anything comparable to UMJ7P5B5W. They are a rare exception that specialize in expat/nomad taxes. Most CPAs are completely befuddled when it comes to FEIE.

Your tax attorney clearly doesn't specialize in digital nomads. I highly recommend you speak to someone who does. I recommended a good one earlier in this thread.

The only thing you mentioned that is a minor complication is your motorcycle. But it's not prohibitive.

Many of us have no lease, we retain our drivers license, voting rights, and state residency (required if you get paid by a US company, they have to pay you and tax you somewhere, and I'm not renouncing my citizenship-I still want to drive and vote.)

You're getting questionable advice.