Travel
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FAQ
"How much does traveling cost?"
Cost of living(rent, utilities, wifi, groceries) is $500 USD per month for most countries, $1000 for most others.
"Health care and insurance?"
Health care and insurance are both pennies on the US dollar abroad via medical tourism
"What about visas?"
Usually don't need them, the ones you need are almost all entirely online now, a fifteen minute form and nominal fee that is offset by the drastically lower cost of living in that country.
"How do you make money while abroad?"
Any job that nets you $500 a month works. There are over 2 billion English students globally right now, so native English speakers have lucked into a guaranteed job on or offline.
"What qualifications do I need as an English teacher?"
Some countries and schools require a TEFL certificate or prefer candidates with an associate's degree depending on the position, but if you want to teach English, all you need is to be a fluent English speaker.
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Sure, this is the official IRS explanation of the FEIE:
https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion
This is the official language of the physical presence test I'm referring to in your quote.
"You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during any period of 12 consecutive months including some part of the year at issue. The 330 qualifying days do not have to be consecutive."
Plainly, it doesn't matter if you were absent from the United States between January 1st and December 31st to qualify, it only matters that you were not present in the United States for 330 of 365 consecutive days that include the current tax year.
You could have been in the US until april, and then outside the US from May until the following april, and that's fine to claim the FEIE and exclude a variable amount of your earned income tax as determined each year by the IRS (currently at $126,500 annually).
By tax year you were only out of the country for 270 days, but out of 365 calendar days, you were out of the country for 335 days from May to April, and that's what counts for the physical presence test.
You're right that this is very different than a foreign tax credit or double tax exclusion based on foreign taxes paid; form 2555, the FEIE, is a completely separate IRS process excluding foreign earned income tax based solely on your physical presence outside of the US.
And it's cool! Ha, I've been using it ever since I left the states.
So long terms capital gains isn't excluded right?
And there is a 130k/yr cap on feie
So if someone builds up their nest egg they will still owe federal income tax on it if it's capital gains or over 130k/yr
Thank you for citing the source! I really appreciate that
You're welcome!
Right, the FEIE specifically excludes earned income, not unearned income, where capital or investment gains would be grouped under.
The exemption was 126,500 last year, but it's a variable rate as determined by the IRS each year, going up a thousand or so annually.
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This lets you convert pay per hour work into long term capital gains, or dividends, maximize 401k, do the mega-back-door, and get payouts in a Non-Convertible-Currency (such as VND)... your imagination is the limit.
Sorry, I'm not following. Is this exempting income earned in a foreign country, or American income while you are elsewhere? My job is remote and I could easily do it from anywhere but I'm paid in the U.S.
It doesn't matter where you are paid, only where you physically are.
So - yes. According to the irs, if your job is remote, even if you are paid in the US to a US bank by a US company, as long as you are physically outside of the United States for 330 days out of 365 days, you do not pay federal income taxes on your first earned $126,500 (probably a slightly higher number next year as the rate is adjusted annually).
Thank you, that's very interesting.
Sure thing! I saved a lot faster using that tip than I otherwise would have.