Everyone's "just work from Bali" story skips the boring part: you probably still owe tax. Being a digital nomad is a lifestyle, not a tax category. Here's what actually matters.
Where you're taxed
- US citizens are taxed on worldwide income regardless of where they live.
- Most others are taxed where they're a tax resident — commonly the 183-day rule.
- Double-taxation treaties exist between many countries so you're not charged twice, but you must actually claim them.
Two levers US expats use
- Foreign Earned Income Exclusion (FEIE) — excludes a chunk of earned income if you meet the residency test.
- Foreign Tax Credit — offsets US tax by what you already paid abroad.
Don't DIY the hard stuff
If you've got income in three countries or a business structure, talk to someone. The cost of a mistake beats the cost of a consult.
I keep the plain-language version and simple calculators at Taxed Abroad — it's where I dump what I learn so I don't forget it. Use it to know which questions to ask, then confirm with a pro.
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