Does becoming an expat mean I don't have to pay US taxes?

[ExcuseMyIgnorance]

I'm thinking about moving abroad. I'm pretty sure the US government still wants to tax my income even if I don't live on US soil. Is this true? Is there a way to avoid taxes from living abroad whiiiile keeping US citizenship??

[riverwed070707]

Sure there is. As long as you don't plan on returning to the US, you won't be sent to jail for tax fraud.

[kork13]

As long as you are an American citizen (US passport, accounts, residence, etc), you are in fact required to pay income tax. However, there are measures in place that prevent such taxes from being onerous... I forget what the line is, but there is a relatively high level of foreign employment income that is excluded from being taxed as an expat. Something a little over $100k, IIRC.

[riverwed070707]

As long as you are an American citizen (US passport, accounts, residence, etc), you are in fact required to pay income tax. However, there are measures in place that prevent such taxes from being onerous... I forget what the line is, but there is a relatively high level of foreign employment income that is excluded from being taxed as an expat. Something a little over $100k, IIRC.

That's kind of generalized. OP doesn't say where the income is coming from. Since its extremely hard to legally work as a non-citizen in most countries, they are likely going to be making money from a US business (rental properties, virtual business thats registered in the US, investment accounts, etc) in which case income is taxed similar to if they were living on US soil. The alternatives are being paid under the table at a foreign company or living in a country long enough to gain residency making them legally allowed to work there. The latter is legal but uncommon.

[feh]

Is there a way to avoid taxes from living abroad whiiiile keeping US citizenship??

Not an expert on the subject, but I believe the answer is "no".

[ExcuseMyIgnorance]

As long as you are an American citizen (US passport, accounts, residence, etc), you are in fact required to pay income tax. However, there are measures in place that prevent such taxes from being onerous... I forget what the line is, but there is a relatively high level of foreign employment income that is excluded from being taxed as an expat. Something a little over $100k, IIRC.

Ah, yes, I remember reading about this a few months back. However, what if my income is being made online? Can it be excluded under this measure?

[riverwed070707]

Ah, yes, I remember reading about this a few months back. However, what if my income is being made online? Can it be excluded under this measure?

I don't think you can donate sperm online. I could be wrong though.

[97guns]

where do you want to move to? i just got back from thailand last month and i wouldn't mind living there, super cheap cost of living.

[jamiesmoneyadvice]

The US has special tax treaties with other major countries like Canada, France, UK, etc where you won't get double taxed. Otherwise you have to pay taxes on income abroad.

[ExcuseMyIgnorance]

where do you want to move to? i just got back from thailand last month and i wouldn't mind living there, super cheap cost of living.

Thailand would be alright but I'm thinking the flights to/from the States would negate the cheap cost of living. I would want to fly back to the States at least 2x/year.

[97guns]

Thailand would be alright but I'm thinking the flights to/from the States would negate the cheap cost of living. I would want to fly back to the States at least 2x/year.

i flew round trip for $824 from san francisco, i saw it for as low as $769. i couldnt believe how cheap it was

[GrimJack]

I don't think you can donate sperm online. I could be wrong though.

(heh,heh)

[tcatsninfan]

I tried posting the link to this but Saving Advice wouldn't let me since I haven't posted at least 15 times previously, so I'll just tell you about it and you can google it.

The IRS has a thing called Foreign Earned Income Exclusion. If you work overseas and meet the qualifications, you'll be exempt from paying US taxes. You'll still file your taxes every year like normal, but you'll get this and it'll exempt you from paying taxes on anything you've earned overseas.

I believe this is in place to avoid double taxation, though, not to avoid paying taxes altogether. The reason you'd be exempt from paying taxes through this is because you'd be paying taxes in whatever other country you're living in. I'm assuming you'd still pay US taxes if you worked for a US company overseas, but I'm not sure.

If you're working online as some sort of writer/graphic designer/whatever, I'm assuming you'd still be paying US taxes because you'd be getting those jobs from US websites or US companies. But I'm not sure about that one. Let's say you move to Thailand and start doing some contract work as a graphic designer for hostel websites there? I dunno. Maybe the taxes would be based on the fact that you're a US citizen...

[ronb]

I too am interested to see how a digital nomad pays their taxes. Kinda wrong paying US taxes if your jobs aren't coming from America and you aren't living there.

[dawnwes]

Depends on who you work for, how much you make, and how long you live in the country. Oh, and if you are filing jointly or as a single and if everyone you claim is with you or if one or more of you stay in the US.

Way too many variants to answer your question.

Here is some info, but I would contact an International Tax Accountant for specific questions:

https://americansabroad.org/issues/taxation/us-taxes-while-living-abroad-faq/