Hello, digital nomads that move around would not be able to qualify for the Foreign Earned Income Exclusion as you are required to be physically present in a foreign country for greater than 330 days. They may be eligible for foreign tax credit depending on their specific circumstances. These are two different foreign tax strategies. Please consult with a tax professional for specific guidance related to your circumstances. -Dylan
Please keep the videos coming! I'm learning so much. I plan on moving to Colombia in the future and I'm wondering how much taxes I would pay on a U.S. salary of 100K. I know that there's a 33% taxation rate on this amount, but I also read that there's a 25% tax exemption. Is there a way to calculate this myself to get a general idea of my possible tax situation?
The foreign earned income exclusion applies to your personal tax return. Depending on the specific tax structure, yes it could apply to flow through income from an LLC. Please speak to a tax professional about your specific question. -Dylan
So digital nomads that move around can't file for the tax credit?
Hello, digital nomads that move around would not be able to qualify for the Foreign Earned Income Exclusion as you are required to be physically present in a foreign country for greater than 330 days. They may be eligible for foreign tax credit depending on their specific circumstances. These are two different foreign tax strategies. Please consult with a tax professional for specific guidance related to your circumstances. -Dylan
Please keep the videos coming! I'm learning so much. I plan on moving to Colombia in the future and I'm wondering how much taxes I would pay on a U.S. salary of 100K. I know that there's a 33% taxation rate on this amount, but I also read that there's a 25% tax exemption. Is there a way to calculate this myself to get a general idea of my possible tax situation?
What about larger tax payors? THis doesnt do much.
Does this apply for a LLC as well?
The foreign earned income exclusion applies to your personal tax return. Depending on the specific tax structure, yes it could apply to flow through income from an LLC. Please speak to a tax professional about your specific question. -Dylan
If you get this tax exemption, would you still have to pay the local income tax?
In most circumstances, yes. You would be a tax resident of the foreign country. -Dylan