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Many digital nomads live and travel outside the country, and if that applies to you, make sure you keep reading our newsletters.
Today, we will focus on one more tax benefit that works mainly for nomads, whether you’re traveling domestically in the US or internationally, or outside the US.
As a US taxpayer, you will be required to file a tax return if your income is above the minimum filing requirements. For 2021, for example, the minimum income filing requirement is $12,551. You don’t need to file a tax return if you make less than that (and don’t owe any self-employment taxes).
This additional tax break works for people who work away from their tax home. Your tax home is generally defined as the place where you have the following:
- Voter registration
- Vehicle registration
- Driver’s license
- Location of your bank
- Location of your legal and medical professionals
- Location of any business that you own and operate
- How many contacts do you have with a state
- Location of your property
- Your address on important documents, such as wills and trusts, passports, and insurance policies
(Make sure to change the address on your legal documents to match your tax home)
This may change based on your state, so make sure you check the applicable law in your area.
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If you have a question about how this strategy will work for you, Schedule Your Free Tax Assessment Here. Our tax preparation services can help you save significantly on taxes.