why: so the government won’t be able to use your money for whatever the fuck they’re planning for the next 4 years.

as a traveler, none of my money has been funding Israel, for example.

one-step method: you basically fill out one extra tax form called FEIE while you’re doing your taxes, write down the dates you were outside of the country, and then since you aren’t in the country and are not receiving any services from the US, you don’t have to pay income tax up to a certain amount (it’s a little over 125k this year).

  • frank@sopuli.xyz
    9·
    10 days ago

    Yeah, it goes up faster than inflating each year, it seems. 126,400 per person or 253k for married I believe this year, which is a pretty fair bit especially considering you deduct the taxes you locally pay off the top first, afaik

    • Varyk@sh.itjust.worksOP
      4·
      10 days ago

      “considering you deduct the taxes you locally pay off the top first”

      i understood local taxation to be inclusive to the FEIE, can i see your source?

        • Varyk@sh.itjust.worksOP
          3·
          10 days ago

          oh i see. thanks.

          yea, the 1116 is for people paying formal taxes to the foreign government directly, usually because you’re living there as a permanent resident or operating a business full-time and significantly, have established your permanent tax home in that other country.

          using the 1116, you don’t pay all of the taxes twice, although you still pay some of them twice because the US wants that cash.

          the FEIE, form 2555, means that your tax is still in the US and only requires that you’re not in the US for 330 days out of the year to exempt income tax on up to 125k of income earned while outside of the country.

          the feie does have a residency test as well, but the physical presence qualification of 330 days each year is simpler and requires much less trouble to set up initially (permanent residency, switching tax homes, work permits and all that) to qualify for, so I only deal with the physical presence test.

          • frank@sopuli.xyz
            2·
            9 days ago

            Gotcha, okay. So you could do it either way, but for most people ($125k and below per person) it’s probably just better to use the feie it seems

            This is great, thanks for sharing all this.

            • Varyk@sh.itjust.worksOP
              21·
              9 days ago

              exactly, the feie makes tax mitigation way simpler for most full-time travelers at most income levels.

              you’re welcome, I love it when people find this stuff useful!