With remote work growing in popularity, it’s no surprise to see people living their best lives abroad on TikTok and Instagram. This could raise some serious his FOMO and poignant questions about how these full-time travelers can finance their Instagram-worthy vacations.
Taking an extended vacation to travel the world isn’t practical (for most people), so your next best bet might be to work abroad. , this can be a great opportunity to explore new cultures, dine across continents, and perhaps even find a permanent place to call ‘home’.
But before you book a plane ticket, there are a few things to consider about working abroad first.
Check your goals before packing
It’s easy to glorify the idea of living and working in another country. But for yourself, your spouse or partner, and your financial goals, you owe it to yourself to stop and unpack some logistics first.
How long do you plan to stay abroad? Weeks, months, years? You may not know the answer to this question yet, but that’s okay! But in order to better estimate your needs, you need to be clear about your travel goals.
What do you want to do while you are abroad? You may want to work less hours and spend more time exploring new cities. Or maybe you want to put your career on hold altogether. While you may want to stay with your current employer, moving to a new country can be an exciting opportunity to change employers or pursue contract work.
If you anticipate a salary reduction, you should reassess your cash flow plan to take this change into account. This is especially important when considering all other changes in economic conditions such as housing, food, transportation and entertainment.
A key part of the puzzle is determining whether your current financial plan supports these goals, or whether adjustments need to be made (either goals or plans).
Consider employment options
Start by finding out if your current employer allows you to work abroad. If you are already remote, you may be able to work in other parts of the US, but you may not be able to work in other countries, so we recommend asking HR.
Does your current employer have an international office or a sister company with global roots? If so, you can find new roles and opportunities fairly quickly.
Considering switching roles? Consider the skills required to secure that spot. For example, do you need to speak another language fluently or learn a new skill that you don’t have? These factors limit your options or change the timeline for moving abroad. You may be
If you think your employer needs to convince you before firing you, create a presentation that focuses on how the move will benefit you and the company.
Another benefit of having your employer onboard is that it may offset the costs associated with traveling and living abroad. For example, they may help with housing, transportation, and food.
talk to a partner
If you are married or have a partner, naturally you should involve them in this conversation. Will they be picked up and moved out of the country? Or will they keep guarding the fort while you’re gone?
All of the same considerations discussed before working and living abroad apply to your spouse or partner as well.
check visa
In most cases, if you plan to work in another country, you will need to obtain a special work visa. However, if you maintain your current job in the United States and work remotely from abroad, this may not be the case and you should carefully check your local laws.
Also check the current list for the US travel recommendations for the country you plan to go abroad. The government updates this list regularly and can help you determine if your desired destination is currently safe to visit.
If you plan to live in a place that requires you to renew your visa every three months, how do you renew it? What are other Americans doing in that country?
Don’t forget international taxes
Different tax requirements may apply depending on the length of your planned visit or stay abroad.
According to the IRS, U.S. citizens living abroad must follow the same rules and pay quarterly or estimated taxes when filing income, estate, and gift tax returns.1
If you earn income from a foreign country where you work or live, you must pay tax on all income regardless of where it is earned.
Tax Cuts for Americans Abroad
The good news is that the IRS offers some tax relief for Americans living abroad. Primarily foreign-earned income exclusions and foreign tax credits.
To be eligible to claim the foreign-earned income exemption, you must either:2
- be considered a ‘bona fide’ resident of another country for one uninterrupted tax year; or
- Have been physically in another country for at least 330 days in any 12 consecutive months
You may be able to exclude up to $120,000 in foreign earnings in 2023 if you meet any of these requirements.2 If you are married and both meet the requirements, each may choose to exclude foreign-earned income. That means you can exclude up to $240,000 from the 2023 tax year. Four
If you have to pay taxes to another country and need to file a U.S. tax return, you may be able to claim a foreign tax credit. Foreign tax credits allow taxpayers to receive an itemized credit or tax credit for these foreign taxes.3 You cannot claim both FEIE and foreign tax credits on the same income.
Think about lifestyle changes
You may have watched shows like “Emily in Paris” or watched “Eat Play Love” many times. Whatever your motivation for wanting to move abroad, be realistic about your expectations in everyday life. When you live abroad and work full-time, it’s not all about two-hour lunch and breakfast baguettes.
Consider what you have to do to maintain a routine and a sense of “normal” in your new environment. Inevitably things will change and you will acquire new habits and habits. But it’s wise to approach this adventure with a sense of how to build a productive new normal abroad.
Consider how you want your lifestyle and routine to look. how about exercise How do you find a community? Are there any activities you’re excited to participate in (surfing, salsa dancing, scuba, etc.) that you can’t do in your home country?
keep loved ones in mind
When you travel, you may leave your loved ones behind. Have you ever thought about how to stay in touch with friends and family back home? The world has certainly embraced virtual connectivity over the last few years, so finding the right way to communicate shouldn’t be too difficult.
Try to be intentional about how you maintain those relationships. Pick a day a month to video chat with her, or get into the habit of sending her a weekly check-in message to your family. They will appreciate your thoughtfulness while you are abroad.
If a loved one gets sick, will you be able to get a direct flight home? It’s a consideration that should be taken into account.
There is no doubt that there are many things to consider before embarking on this exciting trip abroad. As you prepare to talk to your employer or share the news with your loved ones, remember to focus on your financial well-being. So make sure you do it in a way that aligns with your larger values and goals.
sauce:
1 U.S. Citizens and Foreign Nationals
2Exclusion of foreign earned income
FourCalculation of Foreigner Earned Income Exclusion
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