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).
But if you earn over the threshold, you’re expected to pay taxes to the US government, no matter where you’re actually living or working, no matter if you’re also paying taxes wherever you currently are. The US is the only country in the world to assert that it has the right to tax its citizens remotely in this manner. It’s not normal.
The US has double taxation treaties with over 60 countries. When you pay taxes somewhere else, you deduct all of that tax from your US taxes above the $125k.
Though I definitely agree the IRS shouldn’t need these treaties, because if you’re not living there, why should you even need to file?
It’s Navy SEAL protection money.
They also charge you a crazy exit tax if you want to give up citizenship in order to save on taxes. They always get their pound of flesh.
Which is absolutely wild to me, considering that all natively born citizens received their citizenship involuntarily at birth.
“over the threshold, you’re expected to pay taxes”
sort of, that’s the “up to 125k” limit part of the FEIE(readjusted for inflation every year).
you still don’t pay taxes on the first 125k.
earning more than 125k is not a problem most people have.
The problem most people have is not knowing that the feie exists in the first place and there are legal, straightforward ways to avoid paying income tax while saving money traveling.
“no matter if you’re also paying taxes wherever you currently are…”
this is very iffy and depends on a lot of factors.
again, for most regular people, foreign income tax credits will erase most financial duties to the US.
“The US is the only country in the world…”
nearly.
“It’s not normal.”
nope, it’s definitely weird and it sucks.
but at least there’s the FEIE.
Add that to the list
That said, if you’re making over 100k trumps tax cuts will probably be pretty nice for you.
Not if you live in a state with state and local income tax. They capped SALT deductions, so you’re basically paying tax on taxed income.
But if you live overseas you in fact do not live in a state.
Some states still require you to file even if you don’t live there, but have ties, and may tax your income.
can you define ties? Because I don’t see how if I move from state A to state B that they will take income I earn while living in state B.
You own property in the state, or consider it your primary residence, you have income from business or investments in the state.
It really varies state by state.
Well, it is on them to find me and this income.
I always find it mad as hell that Americans have to pay tax in the US even if they are living and earning elsewhere
Especially given generally Americans are pretty allergic to reasonable taxation
yeah it is totally banana stacks, and nobody tells anybody else how to get around that, of course.
since nobody knows the sacred knowledge anyway.
some tax guy, not my tax guy, just a random guy who worked in taxes, offhandedly mentioned it to me like it was no big deal one day and I was like whaaaat?
most of the expats I know just don’t pay taxes because they’re dumb, or they’re paying taxes that they don’t need to because nobody told them about the FEIE.
I read somewhere that Eritrea (the North Korea of Africa) is the only other country that has this policy.
Unless you renounce US citizenship of course. I understand it’s a bit extreme, but it is a solution
do you mean “another option to avoid paying taxes is renouncing your citizenship?”
in which case, yeah, extreme and still an option.
but the FEIE is way simpler and you can keep the few perks US citizenship still affords its rabble.
Which isn’t free btw.
Does project 2025 get rid of the IRS? If so, how would this be enforced?
No, this is a legal and very straightforward IRS procedure corresponding to physical presence in the United States.
it’s called the feie, Foreign earned income exclusion act.
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).
that’s it.
But someone would still have to pay taxes on income earned in the US (such as through online work, and work that generates tax forms that get sent), even though they live in a foreign country?
not if you are earning that money while you are outside of the country.
so if you do remote work for a US company that pays money to your us Bank account but you are outside of the country for 330 days, then you don’t pay taxes on the first 125k of your income that year.
here’s how the IRS explains it:
“The source of your earned income is the place where you perform the services for which you receive the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in France is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is in New York City.”
Great question!
https://getyarn.io/yarn-clip/a421c712-bdee-42c4-9a0b-5e5c30a05c58
Sorry for the link but it’s the first one I found to the Python sketch.
No apologies necessary, thanks for the clip.
These posts are always so funny to me, because it implies you were completely happy with what the US has been funding for at least a year but now you want to talk about tax avoidance?
“These posts are always…”
show me.
I haven’t seen any other posts about the FEIE(except for mine earlier this year).
“…it implies you were completely happy…”
not at all, in fact, the post body specifically contradicts your implication.
your “implication” is drawn entirely from your own flawed assumptions and unnecessary ignorance.
“…now you want to talk about tax avoidance?”
I’ve been talking about the feie for years, so in the future you might want to check yourself since you just wrecked yourself.
You have to admit, he really destroyed that strawman version of you though.
set his own shoelace on fire and then tied it to the scarecrow to set it ablaze.
what a coup de gras!
