I’m curious what people here have heard is the correct expense declaration approach for DN stays in which the purpose of going to that destination is for business. For example, I’m going to X country/city for 3 weeks so I can network with potential partners, meet with clients, etc. and I wouldn’t be going there if it wasn’t for business. How much of that stay is correct to declare as a business expenses? The whole thing (airline + housing + meals), parts of it (getting to and from the individual meetings), or some sort of in-between?

The thing about travel expenses is that a needs to have a clear business purpose, and you have to be traveling away from your tax home. The latter becomes a problem for digital nomads claiming the FEIE, as we claim the places were traveling to as our tax homes

Does that mean if your tax home is a US state + you’re not claiming FEIE, and there is a clear business purpose of the stay then most expenses can be on the table for that particular stay? Or does the flight have to originate from the US state you are a resident of?

The former

Hey everyone, question about the 12 month period for the FEIE physical presence test. If I haven't been back the US in 2 years, can I return for ~70 consecutive days and have a new 12 month period start after the 35 day? The first 12 month period will end on that same day. Or, do I have to leave the US for the next 12 month period to start?

You need a 365 day period where 330 of those you were present in a foreign country. So, if you left the states and didn’t come back, technically you qualifying period could start at the 35 day mark

Also not that you can’t take the exemption for two separate periods in a calendar year. If you do such a thing in June, you would only be able to take the exemption for the first half of the year or the second, but not both

Trying to understand your response 😅 Apologies if I miss something. I can create my own 365 day period, correct? So because in the last 365 days I’ve been in a foreign country for the full 365 days, I can return to the US and end the first 365 period on my 35 day, then stay in the country and start counting towards the next 12 month period, going forward.

I’m not sure I understand the second part of your reply though.

The 365 day period is known as you qualifying period, and only income within that qualifying period can be exempted. Of your qualifying period is Jun-Jun, only income from Jan-Jun can be exempted

I see. So by instantly starting a new 365 day period in this case I’d be losing out on ~6 months of exemption.

Yep. That’s why I tell people if they can, plan to spend that time in the US at the beginning or the end of the year

I don't know what the specific business account rules are, but you only have to pay yourself regular wages (set up payroll) if you have classified as a corporation. Otherwise, you can pull money from the business account as you need it.

Today I filed the paperwork to change my residency and driver’s license from Oregon to South Dakota as a “full time traveler” using a PMB as my US residency address. It has to be done in person but it was as easy and fast as advertised. Also the driver’s license was created and issued in the DMV on the spot which was a pleasant surprise.

Good to know. There are places or businesses you might deal with that require a street address or don’t accept mailing addresses that are PO Boxes. I believe UPS and FedEx don’t accept PO Boxes. Have you thought about how to get around situations like that? Have you looked into a virtual PO Box…or is that what you have setup? When I was living abroad, I was lucky to have a permanent mailing address at my parents’ house, where I could still receive mail. The only issue with that was that I still have to file and pay state taxes where they live.

I went with www.postscanmail.com/ which isn’t a USPS PO box and does allow FedEx and UPS shipments and forwarding — it’s a real street address with a PMB (personal mail box) number addendum. Bank of America won’t allow me to add my PMB number onto the address they have for me on file, however Chase, CapitalOne, my credit union other financial companies have allowed it. Postscanmail will send pics of the front of letters that arrive and then you can select which ones to open and do full page scans on (a few are allowed per month and then small fees for extras). Also when I have enough letters I want to get in my hand I can designate which ones to package up and where to send it. I haven’t tried forwarding packages yet but they say it’s a similar deal, you put in an address and then they tell you how much it’ll cost to ship there. Another cool thing about Postscanmail is that the USPS form you have to fill out to allow them to be your mail provider can be notarized virtually for $20.

That’s great…thanks for sharing. Hadn’t heard about this service. Definitely a good option should I start nomading long-term again raised_handsskin-tone-4

Hey yfeywave thanks for sharing! How do you handle banks and non-residential address issue, when they may be closing the accounts because the address is not residential?

xovzybfhazgij I think your question was meant for rhvmgln

Yeah, wrong tag, sorry 😞

serrgmtvwoatj so far I was able to add my PMD number (but in the format of “123 Somestreet Ave #223” instead than “123 Somestreet Ave PMB 223" for CapitalOne, a small credit union I’ve been a member of for many years, Vanguard and Chase. I was not able to do it (yet) for Bank of America, but I didn’t try very hard with them since I only have a CC with that I don’t really use anymore. They did accept the “123 Somestreet Ave” part, just not the added PMB number, which means I can’t really receive physical mail from them. These mail services are physical addresses that show up Google maps, it’s just the PMB numbers that the USPS doesn’t have in their system in the same way as they would physical apartments. BTW the South Dakota drivers licenses do have the PMB numbers on them, so maybe that will carry some weight with the financial institutions? I haven’t run into any issues worth calling up and fighting about yet so I’m not totally sure.

As far as I know it’s about this address being residential or not. It’s an issue for some situations. For example if you have an online only business and want to open an account they may ask for a real residential address there (per us regulations, I think)

So far I haven’t had any problems with that, although I’ve heard some people have. If that changes I’ll post about it here.

Anyone have an LLC in WA? I got a letter with an application for a "Certificate of Existence" (cost ~$90) Is this actually necessary?

Are you using a registered agent?

Stripe Atlas Has anyone here ever created a company with it but with the shareholders being organizations instead of individuals?
More specifically My cofounder and I each have a German shell company (UG) that we own 100%. We want to start a US company via Stripe Atlas, that is then held 100% by our shell companies.

So, the address that you give them can be like a hotel address? Or do you need to use a mail service? And does anyone know if DL renewals can be mailed out of state? (Or maybe just to a SD mail forwarder)

xvnstuhxcmgvtkwyf you have to prove that you can receive mail at whatever SD address you list by bringing in some unopened letters that was sent to you. Also if it’s not a mail service you need the owner of that residence to fill out a form saying you can use their address. The cheapest mail scanning/forwarding service I found cost about $15/month and that includes scanning 5 things per month which I can access on an app. It says on the DMV website that renewals can be done remotely but I’ve heard that full time traveling residents have to come spend at least 1 night in the state every 5 years.

Yeah you have to

don’t technically have to, but it’s strongly recommended

I've used clerky which is similar. Most likely they'll refer you out to some other firm that could do that. Your situation is "weird" so the app will probably not support you. We wanted my canadian partner's canadian corp. to be a shareholder but that's not something they do.

Nothing. Many S-Corp owners do this

rwjmxrjledgl argh, thanks for sharing! sounds like we'll have to go custom then...

Just one pointer from someone who has no idea where your business is at consider doing the most simple thing regardless of tax first before making a C Corp with all these bells and whistles

yeah I get where youre coming from 👍 long story short, in our case it's not primarily for tax reasons (although that also helps), it's because we have a hardware product and need to shield ourselves from liability

Ah yeah, if you’re not getting investors like, now, maybe just do an LLC

As far as LLCs go has anyone chosen to 'disregard entity' for their federal taxes? As far as I can tell it just taxes like a sole proprietorship in that case.
I'm assuming you still need a separate bank account for legal protection ect though

hi does anyone have experience with tax implications of purchasing a property in Mexico as a US citizen while working remotely for a US corp? xpost from #_legal

I’m pretty sure the tax implications would only come into place when you sell that property, not when you buy it. That is assuming, of course, that it is a normal property purchase and not some sort of securitized interest in a property.

Any bank recommendations for businesses?

I recently got an account with banknovo.com|banknovo.com as a back-up account, and the process was very smooth, good online and app experience. I would check if they have what you need. I'm not sure if they are a real back with FDIC insurance.

Mercury all the way - mercury.com. I’ve used them for my past few companies and couldn’t be happier.

This literally saved me hours. Last time I opened a bank account for a business I sat in the branch for hours

Right!? And saves me hours per month with virtual cards. Also, if you have cash sitting there, the treasury feature is quite nice.

For feie, if you spend exactly 330 days outside the country, you don't get the full amount excluded, right? it's max exclusion amount (330/365) ?

I believe it depends on whether or not you work while in the US. If you're coming back to the states for vacation and not work days, I believe you're fine. But I honestly usually let my accountant deal with that. 😂 uuwvbdpejw

I mean fair

what?

Ah ok, I need to stop reading CPA blogs about this then haha. thanks!

You are misunderstanding it, but you are touching on a real aspect. It is being present in foreign country for for 330 full days in any 365-day period. Meaning that it can span to just part of calendar year. _That_ is when you prorate it. So if you move abroad Oct 1, 2021 and stay for more than 330 days, this means that for your 2021 tax return, you divide the 92 days over 365 days and can thus exclude $27,398 (25.2% of the full exclusion amount of $108,700).

honestly though just contact ucfnqxzgoj this is her area of expertise

Oh, the tricky tricky FEIE calc.. so hard to explain, so hard to understand.

Step 1 Meet 330/365 days - this is your exclusion period
Step 2 Look at the exclusion period in a calendar year - days in exclusion period in calendar year/365 is max exclusion ratio
Step 3 Compare foreign earned income in exclusion period to max allowable exclusion

Does my employer need to know if I am claiming FEIE?

Why would they need to know that? I'm nearly certain that they wouldn't need to know.

I would say no, unless they want you to come visit their office in the US and you can’t because of it.

As someone who worked abroad for multiple years, I never told my foreign employer about FEIE, and I'm quite certain they would have no idea what it was (considering I was the only US person there)

If you want them to change your withholdings, they'd want to know why, since they could get in trouble for not withholding the correct amount. So my US employer withholds as little as possible.

Your employer does not need to know about your tax filings unless it directly impacts what they withhold

Another neobank for business is found.com|found.com. I haven't used them, but has some interesting features.

Same here, mercury is great, and very low fees.

I'm a former California resident, but I've lived outside the country for about 12 years (was an expat for a long time before doing the digital nomad thing)

I'm considering staying in the USA a bit longer this year (2-3 months) - the implications of that on FEIE are straightforward, but what does this mean for CA?

For example, I know that if I'm outside the USA for 330/365 days next year I can qualify for FEIE again, but would staying longer in California sort of put me back on their radar in the long term?

If you can keep your stay to 10 weeks or fewer, you can count 35 days for the prior rolling calendar year and 35 days for the next rolling calendar year. This recommendation depends on those being the only days you'll be in the USA.

As for CA, I would have to imagine that depends on some of your actions while you are there but I have no idea.

> I’ve heard it’s important to keep the LLC’s finances separate from your personal finances and then do that formal draw to your personal bank account before spending money you’ve made through the LLC on personal things.
Yep, if you do this they call it "piercing the corporate veil". So basically if someone sues your LLC and the corporate veil is pierced then the person can come after your personal assets.

Hi does anyone have a good reference of a CPA that focuses on US Citizens with International Real Estate/Short Term Rentals? Would be greatly appreciated. Thank you!

Can an LLC have multiple businesses under it? I.e. can I use my freelancer LLC to invest in crypto (should I?). Does that hold water legally and tax-wise?

I asked that to onlinetaxman and they told me you could but what that would mean is that if you get sued for your crypto business for instance, then the person can go after all the assets of your company, including your freelancer earnings

Yeah - Brex + Mercury is a great combo!