When you are a US citizen, you have to pay US income taxes. Everybody knows that. But when you are a resident of another country earning an income, you have to pay taxes to that country, too. Does that mean you get taxed twice? Here are some tips for avoiding the Income Tax Two-Step.
The US has so-called tax treaties with a number of other countries. Under these treaties, you have to pay fewer US taxes -- or none at all -- depending on how much you earn and where and how you earn it. You can find all the horrible details on the IRS website here.
I'm not going to apply for residency for any of the countries I plan to visit. That is, I'll have no residency visas, and no work visas either. That's because I don't plan to stay in any one spot for longer than a tourist visa would allow. So I'll just be passing through, on vacation, nothing to see here, thankyouverymuch. And as long as I'm not earning income while I'm abroad (*cough*), I can side-step the whole issue. My company is making money in the US, and I'm vacationing abroad. End of story.
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