Retirement Accounts Don’t Take a Vacation
Here’s a pain point: if you’re abroad, you can still contribute to a US IRA or Solo 401(k). The Solo 401(k) is especially lovely for nomad CPAs — high contribution limits, and you can fund it as both employer and employee.
Just watch the FEIE interaction. If you exclude all your income, you have no earned income to base IRA contributions on. Frustrating, I know. Sometimes it’s worth taking a partial exclusion or using the FTC instead, just to keep retirement contributions alive.
Don’t Forget About Estimated Taxes
No employer withholding means quarterly estimated payments. Miss them and you’ll face underpayment penalties. The due dates — April 15, June 15, September 15, and January 15 — don’t care that you’re trekking in Nepal with spotty Wi-Fi.
Set calendar reminders. Automate payments if you can. Your future self will thank you.
A Quick Word on Treaties
Tax treaties between the US and other countries can override default rules. They might exempt certain income, define residency differently, or reduce withholding. But treaties are dense — like, reading-a-legal-document-in-a-foreign-language dense. Because, well, they often are.
If you’re splitting time between two treaty countries, get professional eyes on it. Even CPAs hire CPAs for this stuff. No shame in it.
Embrace the Boring Stuff
Honestly, the biggest tax planning strategy isn’t clever — it’s consistent. Track your days. Save your receipts. Reconcile your accounts monthly. Keep a digital folder for every country’s tax forms.
The nomad life is romantic. The tax side? Not so much. But when you blend them well — when you treat your own affairs with the same rigor you give clients — something shifts. You’re not just surviving the system. You’re working it, calmly, from a café in Medellín or a train through Switzerland.
And that, well, that’s a kind of freedom worth filing for.
- Establish a domicile in a no-income-tax state (like Florida, Texas, or South Dakota).
- Spend fewer than 183 days in any high-tax state.
- Move your banking, will, and vehicle registration.
- Keep a detailed day-count log. Seriously, a spreadsheet. Every nomad CPA should have one.
Retirement Accounts Don’t Take a Vacation
Here’s a pain point: if you’re abroad, you can still contribute to a US IRA or Solo 401(k). The Solo 401(k) is especially lovely for nomad CPAs — high contribution limits, and you can fund it as both employer and employee.
Just watch the FEIE interaction. If you exclude all your income, you have no earned income to base IRA contributions on. Frustrating, I know. Sometimes it’s worth taking a partial exclusion or using the FTC instead, just to keep retirement contributions alive.
Don’t Forget About Estimated Taxes
No employer withholding means quarterly estimated payments. Miss them and you’ll face underpayment penalties. The due dates — April 15, June 15, September 15, and January 15 — don’t care that you’re trekking in Nepal with spotty Wi-Fi.
Set calendar reminders. Automate payments if you can. Your future self will thank you.
A Quick Word on Treaties
Tax treaties between the US and other countries can override default rules. They might exempt certain income, define residency differently, or reduce withholding. But treaties are dense — like, reading-a-legal-document-in-a-foreign-language dense. Because, well, they often are.
If you’re splitting time between two treaty countries, get professional eyes on it. Even CPAs hire CPAs for this stuff. No shame in it.
Embrace the Boring Stuff
Honestly, the biggest tax planning strategy isn’t clever — it’s consistent. Track your days. Save your receipts. Reconcile your accounts monthly. Keep a digital folder for every country’s tax forms.
The nomad life is romantic. The tax side? Not so much. But when you blend them well — when you treat your own affairs with the same rigor you give clients — something shifts. You’re not just surviving the system. You’re working it, calmly, from a café in Medellín or a train through Switzerland.
And that, well, that’s a kind of freedom worth filing for.
- Establish a domicile in a no-income-tax state (like Florida, Texas, or South Dakota).
- Spend fewer than 183 days in any high-tax state.
- Move your banking, will, and vehicle registration.
- Keep a detailed day-count log. Seriously, a spreadsheet. Every nomad CPA should have one.
Retirement Accounts Don’t Take a Vacation
Here’s a pain point: if you’re abroad, you can still contribute to a US IRA or Solo 401(k). The Solo 401(k) is especially lovely for nomad CPAs — high contribution limits, and you can fund it as both employer and employee.
Just watch the FEIE interaction. If you exclude all your income, you have no earned income to base IRA contributions on. Frustrating, I know. Sometimes it’s worth taking a partial exclusion or using the FTC instead, just to keep retirement contributions alive.
Don’t Forget About Estimated Taxes
No employer withholding means quarterly estimated payments. Miss them and you’ll face underpayment penalties. The due dates — April 15, June 15, September 15, and January 15 — don’t care that you’re trekking in Nepal with spotty Wi-Fi.
Set calendar reminders. Automate payments if you can. Your future self will thank you.
A Quick Word on Treaties
Tax treaties between the US and other countries can override default rules. They might exempt certain income, define residency differently, or reduce withholding. But treaties are dense — like, reading-a-legal-document-in-a-foreign-language dense. Because, well, they often are.
If you’re splitting time between two treaty countries, get professional eyes on it. Even CPAs hire CPAs for this stuff. No shame in it.
Embrace the Boring Stuff
Honestly, the biggest tax planning strategy isn’t clever — it’s consistent. Track your days. Save your receipts. Reconcile your accounts monthly. Keep a digital folder for every country’s tax forms.
The nomad life is romantic. The tax side? Not so much. But when you blend them well — when you treat your own affairs with the same rigor you give clients — something shifts. You’re not just surviving the system. You’re working it, calmly, from a café in Medellín or a train through Switzerland.
And that, well, that’s a kind of freedom worth filing for.
Picture this: you’re filing a client’s return from a co-working space in Lisbon, your laptop humming, a pastel de nata cooling beside your keyboard. Sounds dreamy, right? Well… it is. Until tax season rolls around and you realize your own affairs are a tangled mess of time zones, treaty clauses, and foreign bank accounts.
Here’s the deal — digital nomad CPAs sit in a weird, wonderful spot. You know the rules better than most. But knowing them and applying them to your own nomadic life? That’s a different beast entirely. Let’s dive into the strategies that actually work.
First, Nail Down Your Tax Residency (Seriously)
Everything flows from this one question: where are you a tax resident? Get it wrong and every other strategy crumbles. Most countries use one of two tests — or a mix of both.
The physical presence test looks at how many days you spend somewhere. The permanent home test asks where your “center of vital interests” sits. Honestly, that phrase has haunted nomads for decades. Your apartment in Bangkok, your storage unit in Texas, your mom’s address in Ohio — they all whisper into the calculation.
For US citizens, though, there’s a twist: you’re taxed on worldwide income no matter where you sleep. Sorry. The IRS doesn’t care that you’ve gone full beach-bum. That’s why the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) become your best friends.
The FEIE and FTC: Your Two Heavy Hitters
Let’s break these down, because CPAs love precision and, well, so should you.
- Foreign Earned Income Exclusion (FEIE): For 2024, you can exclude up to $126,500 of foreign earned income. To qualify, you need either bona fide residence in a foreign country for a full tax year or 330 full days abroad in 12 consecutive months.
- Foreign Tax Credit (FTC): If you pay taxes to another country, the FTC gives you a dollar-for-dollar credit against your US tax bill. Unlike the FEIE, there’s no cap tied to an exclusion amount.
Quick note: you can’t double-dip. Income excluded under FEIE can’t also generate FTC. So run the numbers both ways. Sometimes the FTC wins; sometimes FEIE does. It depends on your income level and where you’re parked.
Where You Bank Matters More Than You Think
Foreign bank accounts trigger FBAR and FATCA reporting. Miss those and the penalties are… ouch. We’re talking $10,000+ per non-willful violation. Willful? The sky’s basically the limit.
So keep meticulous records. Track every account, even the one you opened for a week in Georgia (the country, not the state). If the aggregate balance across all foreign accounts tops $10,000 at any point in the year, you file FinCEN Form 114.
And hey — CPAs often forget their own advice here. Physician, heal thyself, right?
Structure Your Business Like a Pro
Most digital nomad CPAs run solo practices. That opens up entity choices, and each one has tax consequences.
| Entity Type | Best For | Tax Note |
|---|---|---|
| Sole Prop | Simple, low income | Self-employment tax hits hard |
| LLC (disregarded) | Liability shield | Same tax as sole prop |
| S-Corp | Higher profits | Reasonable salary + distributions |
| Foreign Corp | Specific treaty cases | Complex, get help |
An S-Corp election can save thousands in self-employment tax. But — and this is important — you must pay yourself a reasonable salary. The IRS watches this closely. Don’t get cute.
State Taxes: The Sneaky Villain
You might escape the US federal net, but states are another story. Some states — looking at you, California — are notoriously aggressive about claiming you as a resident. They’ll use voter registration, driver’s license, even a gym membership to argue you never really left.
To truly sever ties:
- Establish a domicile in a no-income-tax state (like Florida, Texas, or South Dakota).
- Spend fewer than 183 days in any high-tax state.
- Move your banking, will, and vehicle registration.
- Keep a detailed day-count log. Seriously, a spreadsheet. Every nomad CPA should have one.
Retirement Accounts Don’t Take a Vacation
Here’s a pain point: if you’re abroad, you can still contribute to a US IRA or Solo 401(k). The Solo 401(k) is especially lovely for nomad CPAs — high contribution limits, and you can fund it as both employer and employee.
Just watch the FEIE interaction. If you exclude all your income, you have no earned income to base IRA contributions on. Frustrating, I know. Sometimes it’s worth taking a partial exclusion or using the FTC instead, just to keep retirement contributions alive.
Don’t Forget About Estimated Taxes
No employer withholding means quarterly estimated payments. Miss them and you’ll face underpayment penalties. The due dates — April 15, June 15, September 15, and January 15 — don’t care that you’re trekking in Nepal with spotty Wi-Fi.
Set calendar reminders. Automate payments if you can. Your future self will thank you.
A Quick Word on Treaties
Tax treaties between the US and other countries can override default rules. They might exempt certain income, define residency differently, or reduce withholding. But treaties are dense — like, reading-a-legal-document-in-a-foreign-language dense. Because, well, they often are.
If you’re splitting time between two treaty countries, get professional eyes on it. Even CPAs hire CPAs for this stuff. No shame in it.
Embrace the Boring Stuff
Honestly, the biggest tax planning strategy isn’t clever — it’s consistent. Track your days. Save your receipts. Reconcile your accounts monthly. Keep a digital folder for every country’s tax forms.
The nomad life is romantic. The tax side? Not so much. But when you blend them well — when you treat your own affairs with the same rigor you give clients — something shifts. You’re not just surviving the system. You’re working it, calmly, from a café in Medellín or a train through Switzerland.
And that, well, that’s a kind of freedom worth filing for.
