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Okay, so this is probably a dumb question but I'm really confused about how taxes work when you're not living in the US. Do we still pay state taxes and stuff? I'm from California btw. Feeling overwhelmed, any help or resources to sort this mess would be amaze. TIA!
Submitted 6 months, 2 weeks ago by WanderingTaxGal
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Dude, been there. Make sure you understand the difference between your residence for tax purposes and your domicile - sounds the same, but it ain't. CA is super aggressive with wanting to tax ex-residents, so get your facts straight with a CPA who won't let you get tripped up by the fine print.
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Foremost, as a U.S. citizen, the IRS wants to know about your income annually, regardless of where it's earned or where you plant your feet. California residency rules are tough and California is notorious for chasing former residents for taxes. They base it on your intent to return and other ties like property or business interests. If you have significant ties, they might still peg you for taxes. But if you can prove you left with no intention of returning (and actually don't return), you could break state tax residency. Consult with a tax professional who specializes in expat/non-resident issues. The Foreign Earned Income Exclusion is also something you should look into, as it may exclude some foreign earnings from U.S. tax.
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Left Cali 2 years ago - still had to file state taxes cause they thought I'd come back. There's something called 'safe harbor' for certain citizens living abroad you might want to check out though. If you're not really planning on returning, you might be off the hook. But, not a tax pro over here, just speaking from experience. def get professional advice!
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It's a mess alright! But I checked out nomadtax.io, they have some decent guides on what to do for taxes, which forms, all that. Worth a look.
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Had the same prob last year. You def have to file U.S. taxes even if you're abroad. Sadly don't know much bout California state taxes, but I heard they can get pretty complicated if you're away. Best to chat with a tax expert who deals with digital nomads tbh.
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Tax pro here! US citizens gotta file federal income tax regardless of where you live. Now for Cali, yes, they're clingy with taxes. But if you're out of the country for 330 full days in a 12-mo period (Physical Presence Test) or you qualify as a bona fide resident of another country, you might not owe state tax. Pro tip: consider setting your residense to a no-income-tax state before you leave if you plan long-term nomading. Get an accountant who knows expat tax stuff. It's worth it!