So, what is an expat? Want to live and work abroad and reduce your tax burden? We talk to David McKeegan, an ex-pat tax expert to learn the tricks.
Many people dream of leaving the US and it’s taxes behind to start a life and a business in a new, exotic place. It can give you a brand new life and reduce your taxes to near zero if you know how to play the game. Seven and a half million of your fellow Americans have done it so why not you?
If you move abroad to live and work, you don’t have to renounce your US citizenship although increasingly some people are doing so for financial or political reasons. But to qualify to pay zero US taxes, you will have to reside outside the country for 330 days per year. If you meet this threshold, your first $99,200 in income, is US tax free!
You may still have to pay taxes in your new home. Or maybe you don’t. In Dubai for example, there is no personal income tax. So the lesson is, investigate the tax codes as part of choosing your new country.
If you are able to work from anywhere you can get a Wifi connection, consider becoming a digital nomad. Many countries will not subject you to local taxes until you’ve been there for 180 days or more, so just pack your bags every few months and move to greener pastures. Imagine the pictures you can post on Facebook if you went this route, yourself lounging with your laptop in exotic locales, on a big pile of tax free money!
Remember, if you choose to move abroad, the first consideration should be quality of life and if you can reduce your tax burden, that’s the icing on the cake.
Greenback Expat Tax Services: David’s company that will help you unravel ex-pat tax filing.
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Betterment: Start investing today to fund your ex-pat dreams.