21–30 of 93 posts
This sadly was the case for my friend Amy, who couldn't travel back to Vermont for her grandmother's funeral. All because of "trivial" things like money and tax!
Earlier quoted context omitted.
Yeah this article is really pointless because it doesn't mention this. I'm an American citizen living abroad (still digital, no longer nomadic). I only pay SS and Medicare tax to the US. Do not give up your US Citizenship for tax avoidance unless you are earning > $200k per year or making a lot of unearned income outside of the US. Or you are in some weird situation where you permanently want to be in the US more tha…
from my understanding the US is the only G20 country that taxes citizens living and working abroad. given that I'm not sure your statement makes sense about when you should give up your US citizenship, as you'll still be out of pocket if you earn less than $200k pa. On the flip side currently if you renounce your US citizenship it immediately triggers a 5 year back tax audit by the IRS and you have to clear your bill…
"Income tax" on "earned income" does not include Social Security, medicare/caid tax so you still pay some. It also doesn't cover "unearned" income like capital gains or rent.
I said earn > $200k because I'm sure citizenship is worth at least $88000 per year to most people. You would also need to be very confident that that income level is never going to to go away.
Further, most developed countries where you would be more likely to be earning that much money have tax reciprocity treaties with the US that cover the rest of your earned income.
If you aren't paying taxes (aside from sales taxes) you are at some remove leeching. Maybe there's a debate here, maybe you have registered as a resident alien in the places you nome to, but most nomads as I understand it seek to be visitor-status for as long as possible.
I know the digital nomad economy includes people who want to sublet their place to you and then get very upset when you show them you've registered as a resident: It plays both ways.
So by all means cease to be american, but please: pay your taxes wherever you are.
not a very good article, without comparing U.S vs another country tax system/medicare pros and cons, it is impossible to make an enlightened decision, therefore making the title of this article irrelevant.
we would need one article per country vs the U.S for this to be informative imo.
What other passports do you have available? The US tax obligations are onerous, but being a US citizen means good no-visa access to lots of places, and somewhere to return to if you want to. Establishing a "reason to leave" when visiting the US might mean you need to buy a house elsewhere if you do renounce.
For visa-free travel you definitely can't beat the US. That's a compromise one has to weigh here. Most places that have good value in the areas outlined in the article, like the Caribbean and some African islands, have less than great visa-free travel access. This can be potentially be relieved somewhat with additional residency permits but it takes some serious consideration of your travel needs/wants.
Digital nomad? I had to check that from wiki. You still need to physically reside somewhere. Maybe securing that first and then worrying about tax burden?
What other passports do you have available? The US tax obligations are onerous, but being a US citizen means good no-visa access to lots of places, and somewhere to return to if you want to. Establishing a "reason to leave" when visiting the US might mean you need to buy a house elsewhere if you do renounce.
For visa-free travel you definitely can't beat the US. That's a compromise one has to weigh here. Most places that have good value in the areas outlined in the article, like the Caribbean and some African islands, have less than great visa-free travel access. This can be potentially be relieved somewhat with additional residency permits but it takes some serious consideration of your travel needs/wants.
Don't! That passport has tremendous value. It will be a huge Opportunity Loss. Plus the way the world is shaping up, you will be better off with the country's Economic/Financial/Military Systems behind you.
US citizens who live abroad for at least 330 days a year, or establish permanent residence abroad, may qualify for the Foreign Earned Income Exclusion (FEIE). that FEIE excludes the first $112,000 of income from federal income tax, double that for a married couple. Social Security/Medicare (aka self-employment tax) are not excluded. Most states will want state income tax, so establish residence in a state with no inc…
Yeah this article is really pointless because it doesn't mention this. I'm an American citizen living abroad (still digital, no longer nomadic). I only pay SS and Medicare tax to the US. Do not give up your US Citizenship for tax avoidance unless you are earning > $200k per year or making a lot of unearned income outside of the US. Or you are in some weird situation where you permanently want to be in the US more tha…