Tax_Planning_Advice_for_an_American_Couple_Moving_Abroad_to_Teach
00:00:00.000 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,
00:00:03.520 | skills, insight, and encouragement you need to live a rich and meaningful life now while
00:00:07.560 | building a plan for financial freedom in 10 years or less.
00:00:10.600 | My name is Joshua.
00:00:11.600 | I am your host.
00:00:12.600 | Today on the show, I'm going to talk to you about the tax obligations for Americans
00:00:16.620 | moving abroad.
00:00:17.620 | Yesterday on the show, I apologize, I wasn't super happy with it, but anyway, it's out.
00:00:22.520 | But yesterday on the show, I talked about changing taxes by moving abroad and how effective
00:00:27.680 | that can be, and I received a very thoughtful and well-written question from one of my patrons
00:00:33.160 | in planning for a Friday Q&A show, and I thought that I would just go ahead and do a standalone
00:00:37.700 | answer to it.
00:00:38.920 | And so if you are an American who would like to understand the tax obligations that you
00:00:44.120 | would have to the United States and also to your prospective new country of residence,
00:00:49.400 | then this is the show for you.
00:00:50.520 | I'll explain it to you.
00:00:51.960 | Jeremy writes in and says, "Hi, Joshua.
00:00:53.320 | My name is Jeremy.
00:00:54.320 | I've been listening to Radical Personal Finance for several years.
00:00:55.880 | I appreciate the wealth of quality content you have produced, and I'm happy to support
00:00:58.760 | the show on Patreon."
00:00:59.760 | Thank you, Jeremy.
00:01:00.760 | "I wanted to reach out, as a supporter of the show, I wanted to reach out with a question
00:01:04.120 | regarding the taxation of American expats," meaning expatriates, "living abroad.
00:01:08.840 | I'm not sure if you accept questions this way, but I wanted to try.
00:01:12.300 | My wife and I are both American citizens considering moving abroad.
00:01:15.800 | I am a public school teacher, and she is self-employed and works from home.
00:01:19.880 | She owns a single-member LLC digital marketing business.
00:01:23.440 | If we moved, I would take a job teaching at an international school, and she would continue
00:01:28.260 | to run her business remotely.
00:01:30.600 | However, before moving, we want to get a complete and accurate picture of what our tax liabilities
00:01:35.900 | will be.
00:01:37.260 | This is the scenario we expect.
00:01:39.000 | I will be teaching at an international school, and the school will withhold income taxes
00:01:43.300 | to the local government for me.
00:01:45.280 | I will make under $106,000.
00:01:48.300 | My wife will be self-employed.
00:01:50.220 | Her business is registered in Ohio, all of her clients will be in the United States,
00:01:54.760 | and all income will be deposited into U.S. bank accounts.
00:01:58.000 | She will also make under $106,000.
00:02:01.320 | Based on my understanding of the foreign earned income exclusion, all U.S. citizens that qualify
00:02:05.820 | can exclude up to $105,900 of foreign income for 2019 from their taxes.
00:02:13.060 | Once I begin teaching abroad, I expect that I will pay income tax to that country's
00:02:17.320 | government, but will not owe federal income tax to the United States because of the foreign
00:02:22.520 | earned income exclusion.
00:02:24.360 | No social security or medicare tax because I have a foreign employer, and no state income
00:02:28.460 | tax as long as I can prove my permanent residence abroad.
00:02:31.800 | However, my wife's situation is less clear.
00:02:34.880 | Though she will be living abroad, and doing all of her work abroad, her business will
00:02:38.740 | be registered in the United States, and all her clients will be in the United States.
00:02:42.640 | Consequently, my questions are, 1.
00:02:45.160 | Are my assumptions about my tax liability as a teacher abroad correct?
00:02:48.800 | 2.
00:02:49.800 | Is my wife eligible for the foreign earned income exclusion?
00:02:52.960 | 3.
00:02:53.960 | Will my wife owe social security and medicare taxes on her business income?
00:02:57.800 | 4.
00:02:58.800 | Will my wife owe taxes to the state of Ohio on her business income?
00:03:02.120 | 5.
00:03:03.120 | Does my wife owe any taxes to the country where we will be living?
00:03:06.520 | What is incredibly frustrating is that I have reached out to numerous tax professionals
00:03:10.400 | and continually get different answers.
00:03:12.580 | This is information we desperately need before making such a serious commitment.
00:03:16.120 | Since you are also an American citizen operating a business while living abroad, I hope you
00:03:19.680 | can provide some guidance.
00:03:21.200 | If you do not know, do you happen to know anyone I could contact to get these answers?
00:03:24.240 | Thanks for your help.
00:03:25.240 | I hope you're staying sane and healthy in these crazy times.
00:03:26.960 | Best, Jeremy.
00:03:27.960 | Yes, Jeremy, I am.
00:03:28.960 | Let me take care of the dogs, and then I'll answer your questions.
00:03:32.160 | First, I thank you for writing such an excellent and orderly question because it will allow
00:03:37.760 | me in answering your question to lay out basically all of the components of what taxation is
00:03:45.840 | like for Americans who are living abroad.
00:03:48.520 | Let's begin with the first piece of data that you shared, that my wife and I are both American
00:03:53.280 | citizens considering moving abroad.
00:03:55.280 | It is very important that Americans pay close attention to what I say, but people who are
00:04:01.160 | not Americans can basically ignore this show, with the exception of your abstract interest
00:04:05.840 | in American taxation, because the answer is extraordinarily different for Americans as
00:04:12.640 | compared to any other nationality on earth due to the unique system of citizenship-based
00:04:17.320 | taxation in the United States.
00:04:19.160 | The first thing is, both you and your wife are considered to be U.S. persons for American
00:04:25.120 | taxes, and as U.S. persons, that means that the IRS considers that you owe the IRS income
00:04:32.200 | taxes on your worldwide income.
00:04:35.920 | Now there are basically three categories, three broad categories of people who qualify,
00:04:41.440 | who get taxed by the IRS.
00:04:43.820 | Number one is American citizens.
00:04:46.000 | Any American citizen, be it intentional American citizen, be it native-born American citizen,
00:04:52.000 | be it naturalized American citizen, any American citizen owes tax to the IRS on their worldwide
00:04:57.720 | income.
00:04:58.840 | Number two is any holder of a U.S. permanent residency visa.
00:05:05.960 | So anybody who has the ability to live and work in the United States, who's a permanent
00:05:09.120 | resident, who's a green card holder, to the extent that their green card is valid, the
00:05:12.880 | United States considers them to be a U.S. person.
00:05:15.200 | This is important.
00:05:16.200 | Say, for example, you come from Mexico and you go to the United States, you get a green
00:05:20.840 | card and then you move back to Mexico.
00:05:22.640 | Your tax obligations to the U.S. government do not end when you physically leave the United
00:05:27.880 | States.
00:05:28.880 | Your tax obligations only end when you surrender your green card.
00:05:32.360 | The third category of person who owes taxes to the IRS is somebody who spends a substantial
00:05:37.880 | amount of time in the United States, somebody who qualifies under what's called the substantial
00:05:43.280 | presence test.
00:05:44.340 | You can look up the details of that substantial presence test, but basically if you wind up
00:05:48.640 | spending more than four months a year in the United States, you'll wind up owing the United
00:05:55.240 | States tax money based upon your substantial presence inside of the United States.
00:06:01.600 | It is important to note that the IRS does not look to the immigration system as its
00:06:08.080 | definition of whether or not somebody is a resident.
00:06:11.400 | You can fully follow all of the relevant immigration laws and find yourself being a taxpayer, owing
00:06:20.600 | taxes to the United States, or you can ignore the immigration laws and still find yourself
00:06:23.640 | owing taxes.
00:06:24.640 | You're not connected.
00:06:25.640 | So you have to, if you satisfy the substantial presence test, even if you're just a visitor
00:06:29.280 | visa, you may still wind up owing taxes to the U.S. government.
00:06:34.160 | In your case, your system is simple though because both you and your wife are American
00:06:38.440 | citizens and for as long as you are American citizens, you will owe the U.S. government
00:06:45.680 | taxes on your worldwide income, anywhere it's earned in the world, subject to three basic
00:06:52.360 | exceptions.
00:06:53.360 | One, the foreign earned income exclusion, which is the bulk of our conversation here.
00:06:57.160 | Number two, the foreign housing deduction or foreign housing exclusion.
00:07:00.800 | And number three, foreign tax credits.
00:07:03.800 | So let's go on with the fact pattern.
00:07:05.440 | I'm a public school teacher and she is self-employed and works from home.
00:07:08.480 | She owns a single member LLC digital marketing business.
00:07:11.640 | If we moved, I would take a job teaching at an international school and she would continue
00:07:15.800 | to run her business remotely.
00:07:18.400 | So first, are my assumptions about my tax liability as a teacher abroad correct?
00:07:23.360 | Yes.
00:07:24.360 | If you move abroad, you will have two systems of tax authorities to think about.
00:07:28.720 | First is the United States.
00:07:29.880 | The second is your country of residence.
00:07:33.040 | With regard to the United States, the first question is, are you going to qualify for
00:07:37.600 | the foreign earned income exclusion?
00:07:40.800 | There are two ways that you qualify for the foreign earned income exclusion.
00:07:44.160 | The first way is called the strict days test, where you count the number of days that you
00:07:49.000 | are physically present inside of the United States.
00:07:52.820 | If that number is fewer than 35 days within a rolling 12 month period, you will qualify
00:07:59.280 | for the foreign earned income exclusion.
00:08:02.040 | Simple fact pattern, you leave the United States on January 1 and you do not return
00:08:06.160 | to the United States until December 31.
00:08:09.640 | For the entire calendar year, you will qualify for the foreign earned income exclusion.
00:08:15.260 | If you leave on June 1 and return on the following June 1, you will get a 50% of the exclusion
00:08:23.400 | that can be applied to your income for the tax year, but you don't have to be gone for
00:08:27.840 | the calendar year.
00:08:28.960 | That's the basic point I'm trying to make.
00:08:30.980 | So that's called the strict days test that gives you up to 35 days inside the United
00:08:35.440 | States.
00:08:36.440 | And when you fill out that form, you just simply say, here's the number of days that
00:08:38.700 | I have been present inside the United States.
00:08:41.340 | If it is less than 35, then you will qualify for the foreign earned income exclusion.
00:08:46.500 | The foreign earned income exclusion will allow you to not owe federal income tax on your
00:08:53.000 | first $106,000 of income.
00:08:56.200 | That number changes each year based upon an inflation adjustment.
00:08:59.320 | So it's usually about $106,000, but it will avoid your income tax on the first $106,000
00:09:05.560 | of your earned income.
00:09:07.360 | It will not save you money on capital gains taxes.
00:09:09.960 | It will not save you money on unearned income, but on your earned income, that will eliminate
00:09:14.600 | your tax liability to the United States on your first $106,000 of tax liability.
00:09:20.420 | The second way that you qualify for the foreign earned income exclusion is based upon what's
00:09:24.400 | called the bona fide residency test, which means do you live somewhere else?
00:09:29.640 | Genuinely, legitimately, truly, are you a bona fide resident elsewhere?
00:09:34.160 | If you've moved from the United States to London and you own a house in London and you
00:09:38.920 | have a permanent resident visa in England and/or maybe you're a British citizen and
00:09:44.400 | all of your center of life is there and you don't really have many connections to the
00:09:47.720 | United States, there's a long series of tests basically, you could prove, "Look, I'm a bona
00:09:52.360 | fide resident of England.
00:09:53.800 | I don't live in the United States anymore."
00:09:56.280 | Under that circumstance, you have a little bit more flexibility with the amount of time
00:09:59.720 | that you spend in the United States.
00:10:01.520 | In theory, you could spend up to a few months a year each year in the United States and
00:10:05.720 | still qualify for the foreign earned income exclusion.
00:10:09.160 | But then again, you still need to avoid triggering the substantial presence test.
00:10:13.520 | So in that situation, your assumptions about your tax liability as a teacher are correct.
00:10:18.440 | If you have moved abroad and you're teaching in an international school in a foreign country,
00:10:23.880 | your wages are earned income.
00:10:26.000 | And as long as you qualify for the foreign earned income exclusion, you will not owe
00:10:29.080 | the United States any taxes on that particular, on that first $106,000 of income.
00:10:36.280 | Now what about your local taxation?
00:10:38.280 | Because that's the other side of it.
00:10:39.840 | You will owe taxes to the place that you are a tax resident.
00:10:43.840 | So this would vary depending on the specific country that you are working in.
00:10:48.480 | If you moved to England or let's use the Netherlands, right?
00:10:52.040 | You moved to the Netherlands and you're working in an international school as a teacher and
00:10:57.440 | you're there in the Netherlands all year, then of course you'll be a tax resident of
00:11:01.600 | the Netherlands and you will owe taxes to the government of the Netherlands due to your
00:11:07.880 | working in that country.
00:11:09.240 | And you will owe them both employment taxes, contributions to the social security system
00:11:13.680 | in the Netherlands, as well as income taxes to the Netherlands government.
00:11:19.320 | And your tax structure with the United States does not affect that.
00:11:23.160 | That's based upon your physical presence in the Netherlands.
00:11:26.400 | Now if you moved to a lower tax country or no income tax country, say for example you
00:11:31.320 | moved to Dubai and you take a job at an international school in Dubai, Dubai has no income tax.
00:11:35.960 | Well in that situation you would not owe any income tax to the Dubai government because
00:11:40.400 | they don't have any income tax.
00:11:42.880 | What you would want to look up is you want to look up what is tax, what are the rules
00:11:46.160 | of tax residency for each country that you're looking at.
00:11:49.440 | Each country has a different set of rules.
00:11:51.840 | Some countries are very, very tight on what it means to be a tax resident and it's very
00:11:55.920 | easy to trigger it.
00:11:57.440 | For example, a country like Switzerland has a very short period of time, I think it's
00:12:01.480 | something like 90 days.
00:12:02.480 | If you're in the country more than 90 days, there's a good chance that Switzerland is
00:12:05.720 | going to claim that you're a tax resident of that country.
00:12:09.380 | Other countries have a much looser period of time.
00:12:11.800 | Some countries may still have the old standard of if you're in the country fewer than six
00:12:15.920 | months then you don't owe any income taxes.
00:12:19.800 | And so in those countries it might be possible.
00:12:22.960 | Let's just pretend, what country should I use?
00:12:27.240 | I guess we could use a country like Australia.
00:12:29.400 | Australia has a three-part test to qualify for whether you're a tax resident.
00:12:34.360 | The first part is the resides test where you actually reside, where is your physical presence,
00:12:40.760 | what's your intention and purpose, where is your family located, where do you have ties,
00:12:43.640 | where are your assets, what are your living arrangements.
00:12:45.840 | The second is the domicile test and then the third is 183-day test.
00:12:50.200 | And so the six-month test, basically the 183-day test is the third test.
00:12:56.260 | If you satisfy either of the first two then they'll qualify you as a tax resident.
00:12:59.940 | But if you didn't do those things and you were in the country fewer than 183 days, then
00:13:04.440 | in theory maybe you wouldn't actually become an Australian tax resident for tax purposes.
00:13:08.900 | So as an American, let's say that you went to Australia and you were going to be teaching
00:13:12.860 | at a school but you didn't actually take up residence there.
00:13:15.200 | You just rented a temporary Airbnb apartment and you were only there during the time when
00:13:22.140 | school is in session, which would be less than 183 days perhaps.
00:13:26.740 | And you taught and then you left.
00:13:28.100 | Well, in theory something like that might qualify you as not being a tax resident if
00:13:32.600 | all of your stuff were elsewhere.
00:13:36.420 | And so you want to think about where you actually are.
00:13:38.840 | Now I understand that you're probably not a weirdo.
00:13:40.940 | You're going to move somewhere, live there genuinely.
00:13:43.260 | But you do want to pay attention to what you're actually paying, where you actually are.
00:13:49.020 | So your tax obligations to that foreign government are going to be exactly that way.
00:13:55.120 | Now let's talk about your wife.
00:13:56.220 | Is your wife eligible for the foreign earned income exclusion?
00:13:59.520 | Well the answer is if she qualifies for the results.
00:14:03.160 | But there is nothing in the, if she passes the test for the foreign earned income exclusion,
00:14:07.460 | yes, she will be eligible for it.
00:14:09.900 | There's nothing in the foreign earned income exclusion that applies to where her business
00:14:14.500 | is located or where she sells to.
00:14:18.140 | It's all about where she is physically located.
00:14:20.660 | Now what's probably tripping you up is when you read the foreign earned income exclusion,
00:14:24.140 | the first thing is, let's see, it's called the tax home test, right?
00:14:26.860 | Which is basically where's your tax home.
00:14:28.700 | And you say, well, what does that mean?
00:14:30.460 | That in my understanding is just basically where do you do the work from, right?
00:14:34.980 | So my tax home is my bedroom.
00:14:37.140 | That's my tax home.
00:14:38.460 | It's not a matter of where my customers are.
00:14:40.660 | You're listening to me in the United States right now.
00:14:42.520 | That doesn't matter for the foreign earned income exclusion.
00:14:44.580 | What matters is where am I actually working?
00:14:47.020 | And the tax home test is much more of a factor for people who are offshore workers, sometimes
00:14:53.940 | military contractors, et cetera.
00:14:56.420 | But in your situation, you don't need to worry about that.
00:14:59.820 | So the physical location of her business is irrelevant.
00:15:02.660 | The fact that she does her business in the United States as a single member LLC doesn't
00:15:06.180 | matter.
00:15:07.180 | The fact that all of her customers in the United States doesn't matter.
00:15:09.500 | There's no obligation to her there.
00:15:11.840 | The foreign earned income exclusion covers her based upon where she is.
00:15:15.660 | So if she satisfies the tests, the tax home test, which is easy, and then either the strict
00:15:20.900 | days test or the bona fide residency test, she will qualify for the foreign earned income
00:15:25.400 | exclusion.
00:15:26.400 | And her qualification for the foreign earned income exclusion will exempt the first $106,000
00:15:31.540 | of her income from federal income taxes.
00:15:34.600 | And it's 106 for you.
00:15:35.700 | It's 106 for her.
00:15:37.220 | So given the constraints that you laid out in your case where you said both of you will
00:15:40.540 | be earning less than $106,000, if you go abroad, you move abroad, and you're outside of the
00:15:45.820 | United States for at least 330 days per year, then you will both qualify and not owe any
00:15:51.940 | federal income taxes on your first $212,000 of income split between the two of you.
00:15:59.180 | Now the next question, will my wife owe Social Security and Medicare taxes on her business
00:16:03.020 | income?
00:16:04.020 | The answer is it depends.
00:16:05.500 | It depends on how she's structured.
00:16:07.780 | So as things stand currently, she is working as a single member LLC in the United States.
00:16:13.360 | And so if she simply moves abroad, she's still going to be working for her single member
00:16:17.700 | LLC in the United States and owning that.
00:16:20.300 | And so yes, in that situation, she will owe employment taxes based upon how she has that
00:16:26.380 | structured.
00:16:27.380 | If the single member LLC is electing to be taxed as a sole proprietorship, then she will
00:16:31.380 | owe self-employment taxes.
00:16:33.440 | If the single member LLC is electing to be taxed as an S corporation, then she'll owe
00:16:38.380 | employment taxes on her salary.
00:16:40.460 | Nothing will change there because she's working for an American company.
00:16:44.460 | Now if she doesn't want to owe those employment taxes, what you could do is you could arrange
00:16:50.740 | for her to move her company offshore.
00:16:54.220 | And the simple solution here, since she already owns a single member LLC, would be for her
00:16:58.820 | to keep everything as it is, but simply to transfer the member interests of her single
00:17:05.420 | member LLC from her ownership to the ownership of a foreign corporation.
00:17:12.300 | And if she does that, then she will be able to eliminate her employment tax obligations
00:17:17.900 | to the United States.
00:17:18.900 | And here's why.
00:17:20.460 | From the perspective of her customers, nothing will change.
00:17:23.600 | With a single member LLC, nothing will change.
00:17:25.660 | All of her bank accounts will still be there.
00:17:27.900 | All of her, she can run her PayPal or her Stripe account.
00:17:30.860 | She can sell everything.
00:17:32.420 | Nothing will change.
00:17:33.420 | She can maintain her US-based address.
00:17:35.960 | Everything is exactly like a US front-facing company.
00:17:40.860 | And nothing has to change with regard to any of the infrastructure of her business.
00:17:45.520 | But if she sells or otherwise transfers her single member LLC member units from her to
00:17:51.700 | a foreign corporation that she owns, what will happen is the IRS will ignore the existence
00:17:57.740 | of the single member LLC for tax purposes.
00:18:00.580 | It becomes basically a transparent entity.
00:18:03.620 | And the IRS will look up one level and say, "Who owns the single member LLC?"
00:18:08.600 | The single member LLC is a disregarded entity for tax purposes.
00:18:12.660 | And so she can establish an offshore corporation.
00:18:15.180 | She can transfer the member units of the LLC to the offshore corporation.
00:18:20.300 | And now the IRS will view her as being the employee of an offshore corporation.
00:18:25.940 | And as an employee of an offshore corporation who qualifies for the foreign earned income
00:18:30.500 | exclusion, now she will not currently owe any kind of employment taxes to the IRS because
00:18:38.580 | she no longer works for a US-based company.
00:18:41.260 | The analog for you is very simple.
00:18:43.480 | In the same way that you moved outside of the United States and you moved to a foreign
00:18:47.460 | country and you now start working for a foreign company, you no longer have to pay US-based
00:18:53.780 | employment taxes because you now have to pay local employment taxes.
00:18:58.740 | Make sense?
00:19:01.300 | So the same thing applies to her.
00:19:03.260 | If she moves outside of the United States and she no longer works for a US-based company
00:19:07.660 | because of the fact that she now works for this offshore company, she will no longer
00:19:11.660 | owe United States employment taxes, but she may now owe offshore employment taxes.
00:19:19.860 | And the answer as to whether she does or doesn't is going to depend on the jurisdiction in
00:19:23.500 | which you move.
00:19:25.260 | Again, what are the laws of that local place?
00:19:29.420 | What are the laws in that local area?
00:19:31.740 | If the local jurisdiction allows her to work online and not legally owe any local employment
00:19:38.820 | taxes because they don't have a system of employment taxes or because an online business
00:19:43.900 | working in some other jurisdiction qualifies in a third place, then she could legally eliminate
00:19:49.260 | that obligation.
00:19:50.260 | However, if she moves to a place where they require contributions to the local social
00:19:54.460 | insurance programs, then of course she's going to owe those contributions to the local social
00:19:59.780 | insurance programs.
00:20:00.780 | So you've got to think about where you're leaving, which is the United States, and think
00:20:03.940 | about where you're going to, which I don't know, but you've got to research the laws
00:20:07.820 | of that local area.
00:20:09.980 | And then the ideal solution is you want to be thoughtful.
00:20:13.320 | From the tax perspective, which most people, taxes are not how they drive their life, nor
00:20:17.100 | should they be.
00:20:18.180 | You want to move to a place because you want to live there.
00:20:20.660 | You might consider taxes, but most of the time you just want to move there because that's
00:20:24.260 | where I want to live.
00:20:25.820 | But to the extent that you're doing the tax planning as a primary consideration, you want
00:20:30.460 | to be thoughtful and strategic about the exact place that you go.
00:20:34.100 | Now the fact that she works online may give her a little bit more liberty with the jurisdictions
00:20:39.340 | that she can work in than you have.
00:20:43.860 | If you are an employee and you're working in one local place, you don't have any flexibility.
00:20:49.060 | Because in the same way that if a Japanese citizen moved to the United States and took
00:20:53.380 | up a job teaching in an international school in the United States, they would have to pay
00:20:56.940 | Social Security and Medicare, you have exactly the same thing if you go to Japan.
00:21:01.140 | But with the online business thing, there may be a little bit more flexibility, but
00:21:04.460 | every jurisdiction is going to be different.
00:21:07.120 | So you want to think through that carefully, but that's the way the law is structured.
00:21:11.300 | Now is it worth it for her to go ahead and do that?
00:21:14.060 | Well maybe, maybe not.
00:21:15.060 | What I would say is the first thing is you're going to add some additional expense.
00:21:19.500 | She already has a single member LLC, so she's already paying the fees to maintain that entity
00:21:24.740 | and to run her business through that.
00:21:26.340 | If she establishes an offshore corporation, she will have to pay additional fees to maintain
00:21:29.940 | that to the country that issues that corporation.
00:21:35.660 | Those fees can range from modest to quite expensive.
00:21:38.740 | There are various jurisdictions that you can incorporate an international business company
00:21:44.060 | very easily with relatively low expenses.
00:21:46.620 | There are other jurisdictions that are incredibly expensive.
00:21:49.260 | Now from her situation, what I would say is I don't see any reason why she would need
00:21:53.100 | to have any kind of name brand expensive corporation.
00:21:57.020 | She's not trying to start something where she's going to have physical employees all
00:21:59.180 | over the world and it makes all the difference in the world that she's based in Hong Kong
00:22:02.340 | instead of Bermuda or some Caribbean island.
00:22:06.640 | The only person that's ever going to know that she has an offshore corporation is the
00:22:10.100 | IRS because she'll have to file additional tax forms for it.
00:22:13.100 | But that's the only person that's ever going to know that she actually has an offshore
00:22:15.900 | corporation.
00:22:16.900 | Her clients, it'll be invisible to her clients because all the businesses, all the bank accounts,
00:22:21.220 | all of that stuff is run through the US based company.
00:22:25.540 | But it will add some additional cost to her.
00:22:29.420 | It'll add some additional expense to establish that corporation.
00:22:35.640 | It also will add some additional expense to preparing the taxes.
00:22:38.960 | If you own an offshore corporation, the tax burden, the paperwork burden becomes really
00:22:43.540 | onerous, really genuinely onerous.
00:22:47.260 | And it's probably going to require you to hire a specialized offshore tax preparation
00:22:52.660 | expert which would be going rates, $500 a year, something like that, in that range to
00:22:58.860 | file the forms for her offshore corporation.
00:23:01.260 | And so you have to ask yourself how much money am I actually going to be saving based upon
00:23:05.260 | this?
00:23:06.260 | If she's only going to owe a couple thousand dollars, if her income is $30,000 and she's
00:23:10.460 | going to owe 15% of that, it's only a few thousand dollars of actual cost, then it may
00:23:18.900 | not be worth the offshore thing, especially given the fact that in theory, employment
00:23:23.180 | taxes are somewhat refundable.
00:23:25.040 | When you make contributions to the Social Security Administration, in theory, you might
00:23:28.300 | get some benefit from that someday.
00:23:30.260 | When you make contributions to the Medicare system, in theory, you might get some benefit
00:23:33.180 | from that someday.
00:23:34.180 | I don't count on that stuff much, but I'm fairly young.
00:23:37.060 | But I imagine it'll be there in some way.
00:23:39.060 | I just think it's a giant black hole Ponzi scheme that you have to throw money into.
00:23:43.780 | But for someone who's older, it may be useful, right?
00:23:45.940 | Someone who's earning a high income and every year that they're earning $150,000 bumps out
00:23:51.420 | a year where they were earning $10,000 earlier in their Social Security calculation, okay,
00:23:56.160 | it works out and that's a decent thing to do.
00:23:59.260 | The other thing that you need to think about, depending on the country that you are going
00:24:02.700 | to is does the country that you're going to have a totalization agreement with the IRS?
00:24:07.580 | The foreign earned income exclusion does not depend upon any kind of interface with another
00:24:14.260 | country.
00:24:15.260 | It doesn't depend on it.
00:24:16.260 | It's just exclusively based upon are you in the United States or not.
00:24:20.620 | But with regard to Social Security programs, you might want to look in, you know, you do
00:24:24.760 | want to look into does the country that I anticipate moving to have a totalization agreement
00:24:29.860 | with the United States?
00:24:31.760 | So if you were moving to, I said earlier, the Netherlands, right?
00:24:35.260 | You're going to go and teach in an international school in the Netherlands.
00:24:38.260 | Well, you look up the totalization agreement between the United States Social Security
00:24:42.100 | Administration and the Netherlands and basically instead of having to pay taxes to both systems,
00:24:48.880 | you can just have access to one system.
00:24:51.060 | And so in her case, what you need to look at is, okay, if she's living in the Netherlands,
00:24:54.940 | if she's required to contribute to the local Dutch social insurance programs, can she receive
00:25:00.140 | credits for those under the Social Security tax system?
00:25:02.740 | In which case, the idea of needing to work for a foreign corporation may be unnecessary.
00:25:07.500 | You'd have to ask the question of where do you reside and if you're self-employed, where
00:25:12.340 | do I pay the money, etc.
00:25:14.020 | And so look into the totalization agreement.
00:25:15.860 | And those are different.
00:25:16.860 | Those are bilateral agreements that have been negotiated between the United States and each
00:25:20.580 | of those countries and they exclusively affect your credits under the various social insurance
00:25:29.940 | systems.
00:25:30.940 | And that can be quite helpful for you.
00:25:31.940 | So you need to understand that and that's dependent on the specific country that you're
00:25:35.820 | involved in.
00:25:36.820 | Now, the benefit that I've talked about for US citizens, there are a lot of disadvantages
00:25:42.780 | to being a US citizen.
00:25:44.700 | One of them, one big one is the citizenship-based taxation.
00:25:49.000 | But an advantage for US citizens is because you're already considered to be a US taxpayer,
00:25:55.180 | if you want to, you can set up fairly easily a lifestyle where you just simply don't become
00:26:00.700 | a tax resident of other countries.
00:26:02.860 | Now that's not going to work if you are sitting in one place.
00:26:06.200 | But let's say that you started an educational, instead of teaching inside a physical classroom,
00:26:11.420 | you took your teaching online and you started teaching your subject matter expertise to
00:26:16.460 | students online.
00:26:18.140 | And instead of choosing one country to move to, you chose a couple or three countries
00:26:22.160 | to move to, and you spent time in each of those three countries.
00:26:25.220 | Well now, you can put yourself in a situation where yes, you are still subject to the US
00:26:29.620 | tax system, subject to the foreign earned income exclusion as we've talked about, but
00:26:34.020 | you now have a freedom from those other countries.
00:26:38.020 | You don't have to be a part of the Netherlands, of the Dutch social insurance program, if
00:26:44.100 | you're only in the Netherlands for three months, because you don't become a tax resident any
00:26:48.620 | more than any other visitor comes for 90 days.
00:26:52.260 | And so if you both were working online and if you wanted to live that kind of flexible
00:26:55.900 | move around nomad lifestyle, then that can result in a superior tax structure for you
00:27:04.180 | that would allow you legally to live tax free if you have a business, an actual business.
00:27:08.580 | You can't do that as a freelancer, but if you have an actual business, that could allow
00:27:11.860 | you to live totally tax free on your first $106,000 for you and your first $106,000 for
00:27:18.140 | your wife.
00:27:19.260 | Most people don't want to do that.
00:27:20.860 | Most of that's not going to be relevant for most people, but it is an option if to the
00:27:24.420 | extent that the taxes pay factor into your overall situation.
00:27:29.740 | Now before we go on to the other two questions that you asked, I want to make a comment on
00:27:35.780 | the foreign tax credit, because the foreign earned income exclusion and the foreign tax
00:27:40.500 | credit function separately.
00:27:42.500 | They're not the same.
00:27:44.380 | You can qualify for the foreign tax credit without qualifying for the foreign earned
00:27:48.400 | income exclusion.
00:27:49.520 | So here would be a simple example.
00:27:51.500 | So you move to the Netherlands and you're in the Netherlands for eight months every
00:27:55.620 | year and based upon tax residency in the Netherlands, you owe the Netherlands a tax on your income.
00:28:04.380 | Pretend that your wife owes the Netherlands tax on her income because she's a tax resident
00:28:07.900 | of the Netherlands.
00:28:08.940 | You're both enrolled in the local Dutch social insurance programs and you're quite happy
00:28:13.880 | to do that because you owe the tax.
00:28:17.460 | Well in this situation, you're going to be paying a higher tax rate in the Netherlands
00:28:22.180 | than you are in the United States, but in this situation it doesn't matter whether you
00:28:26.300 | qualify for the foreign earned income exclusion or not, because what you could do is you could
00:28:29.980 | take a foreign tax credit.
00:28:31.620 | So what you would do is you would reduce your US taxes by the amount that you are paying
00:28:37.380 | in foreign taxes.
00:28:39.820 | So if you move from the United States to a higher tax jurisdiction and you wind up owing
00:28:45.140 | more taxes to that foreign jurisdiction, then the foreign earned income exclusion doesn't
00:28:49.780 | matter because you could actually zero out your tax obligation to the United States based
00:28:54.500 | upon the foreign tax credits, not based upon the foreign earned income exclusion.
00:28:58.540 | So if your decision is a lifestyle decision, we want to live in Amsterdam, we love it here
00:29:03.820 | and we just want to live here, but we're going to go back to the United States for four months
00:29:07.620 | a year, doesn't really matter if you qualify for the foreign earned income exclusion or
00:29:11.020 | not because you're paying more to the Dutch government.
00:29:15.660 | And so you can take a foreign tax credit of your foreign taxes paid and since those foreign
00:29:20.580 | taxes will be higher than the United States taxes, you'll wind up with a net tax liability
00:29:24.300 | to the United States government of basically zero dollars.
00:29:27.260 | Now if you move to a lower tax jurisdiction, if you were teaching in Dubai instead of the
00:29:31.300 | United States, then now all of a sudden that's where that tax planning really comes into
00:29:36.220 | play where you've got to make sure that because you're now not paying any foreign income taxes,
00:29:40.700 | you can't take a foreign tax credit to the United States government.
00:29:44.180 | And so now the foreign earned income exclusion is your exclusive tax savings for the US government.
00:29:50.180 | So it all depends on what jurisdiction you're going to.
00:29:53.300 | Question number four that you have asked, will my wife owe taxes to the state of Ohio
00:29:56.500 | on her business income?
00:29:58.500 | The answer is depends on the state of Ohio on what the state of Ohio considers to be
00:30:04.740 | income and what they charge for you and also for a company that is a tax resident of that
00:30:09.980 | state.
00:30:11.060 | And so you've got to do the research for you and also for the business.
00:30:14.660 | So the first thing is you look up, go to duckduckgo.com and search Ohio tax residency and you'll pull
00:30:21.860 | up the page for your state and it'll tell you what Ohio considers to be tax residency
00:30:27.780 | for an individual.
00:30:29.380 | These tax residency requirements vary across the states.
00:30:32.060 | I don't know what they are for Ohio, easy for you to find it out.
00:30:35.060 | But usually many of them, if you qualify for the foreign earned income exclusion, many
00:30:39.220 | states will use that as a tax residency test or they might have some other test.
00:30:44.120 | And so if you're physically not present in that state, generally it's easy enough for
00:30:47.760 | you to avoid the taxes and most states are going to be fine that way.
00:30:53.020 | What I'd recommend to you is if your state will easily allow you to not be a resident
00:30:57.020 | of that state for you for personal income taxes because you are abroad and if you're
00:31:01.740 | going to be abroad, then it'll be easiest for you just to keep your infrastructure set
00:31:06.100 | up in that state.
00:31:07.100 | You already have your Ohio driver's licenses, you have an Ohio address, maybe move your
00:31:10.660 | address from your house to your mom's house so that she can collect the mail for you.
00:31:14.540 | You update, use that address on your driver's license, move your credit cards there, etc.
00:31:18.460 | But you can just keep all your infrastructure in that state.
00:31:20.700 | The reason why you might want to do that is because it'll keep some of your other financial
00:31:24.220 | planning documents more in order.
00:31:26.180 | So for example, your will, you might have a will that was subject to the state laws
00:31:29.820 | of Ohio.
00:31:30.820 | Well, that's your will that's enforced because your domicile is in Ohio.
00:31:33.820 | If you're moving abroad for a couple of years, you wouldn't want to move your domicile
00:31:36.900 | to another state and then put in force a will that's enforced under the laws of another
00:31:40.780 | state.
00:31:41.780 | So keep your state if you can easily enough avoid tax residency in your state for you.
00:31:45.140 | However, what about for your, what about for your, well, what if they don't allow that?
00:31:52.020 | What if the tax residency laws in your state are really onerous, right?
00:31:55.660 | You live in California or New York and they're just totally, they're going to get you even
00:31:58.740 | if you don't qualify.
00:32:00.900 | Sorry, Californians and New Yorkers, just my mouth gets ahead of me sometimes.
00:32:06.740 | But it is true, super aggressive states.
00:32:09.180 | Well, in that situation, move to another state.
00:32:11.940 | So you would move to a no income tax state would be the simplest and most obvious solution.
00:32:17.980 | You know, South Dakota would be good.
00:32:20.380 | Texas would be good.
00:32:21.380 | Florida would be good.
00:32:22.940 | Wyoming would work.
00:32:24.100 | Just move to a Nevada, other no income tax states.
00:32:27.060 | The easy ones, if you're going to be truly abroad, you'll find that South Dakota and
00:32:30.740 | Texas and Florida work really well for you because they allow nomad residency in those
00:32:36.860 | states.
00:32:37.860 | But move yourself and all your stuff to one of those states.
00:32:40.140 | And if you do that, then you can properly move out of the state of high taxes.
00:32:44.740 | And you want to do that before you go abroad.
00:32:46.940 | Now what about the business?
00:32:47.940 | Well, again, check the laws of business residency in the state.
00:32:51.320 | If the business is being taxed at the entity level, then yes, if the business is located
00:32:56.040 | in that state, then it's going to be taxed.
00:32:58.000 | And so the same thing applies.
00:32:59.440 | Find out what tax residency qualifies for in your state based upon the business being
00:33:03.380 | there and how the state imposes taxes on that.
00:33:06.600 | And then move your business to a no income tax state.
00:33:10.320 | So you can move your business from a state like from Ohio to Nevada or to Wyoming and
00:33:19.100 | just simply move your LLC outside of the state of Ohio to one of those states.
00:33:22.820 | And then you would avoid needing to owe taxes to that state in which the LLC is there.
00:33:29.820 | Now for a digital business, if she's a digital marketing consultant, that probably should
00:33:33.540 | have been done probably in the first place.
00:33:36.420 | If you have a business that has physical property in a certain state, then you almost always
00:33:40.860 | need, it's almost always easier to register that business in your actual state of residence.
00:33:46.060 | Because when you go to register, you know, you've got a pool company.
00:33:50.040 | When you go to register your vans with a local DMV, they're going to pull up the local state
00:33:55.460 | corporate filings and say, "Are you registered in our state?"
00:33:58.340 | And you've got to be registered in the state in which you do business.
00:34:00.960 | But with something like a marketing consulting business or a digital business, it should
00:34:04.060 | be fairly easy for her to just use one of those other business friendly states that
00:34:07.100 | don't impose taxes in the first place.
00:34:09.540 | And so that's what I would do from the very beginning is make sure that her business income
00:34:14.940 | is being earned in a state that doesn't charge taxes at the business level.
00:34:21.120 | And so she might need to move, if Ohio is unfriendly to that, she might need to move
00:34:24.860 | her Ohio single member LLC to a single member LLC from another state.
00:34:31.560 | Number five, does my wife, so that's the answer to number four, would my wife owe taxes in
00:34:35.960 | the state of Ohio on her business income?
00:34:37.300 | Number five, does my wife owe any taxes to the country where we will be living?
00:34:40.520 | Answer is, it depends on the laws of that country.
00:34:43.340 | For most countries, the vast majority of countries, the answer is yes.
00:34:47.680 | If you move to that country and you live in that country, you're going to owe taxes to
00:34:53.080 | that country because most countries are going to impose income taxes on you.
00:34:57.860 | Now there are a few exceptions to that and your wife may or may not qualify to one of
00:35:01.520 | those exceptions based upon where she's earning her income.
00:35:04.520 | So if you move to Canada, you're not going to qualify because Canada has a very similar
00:35:08.400 | tax system to the United States, except it's residency based.
00:35:13.080 | You're going to owe taxes on your worldwide income.
00:35:15.280 | And so her offshore company is not going to save her any money in Canada.
00:35:19.200 | In fact, it could make everything more complicated.
00:35:21.800 | However, if you move to a country that has a territorial system of taxation, either no
00:35:26.720 | taxes due, the Bahamas, Dubai, Cayman Islands, et cetera, or you move to a country that has
00:35:32.300 | a territorial tax system, then it should be much more doable for you to establish the
00:35:38.400 | ability for her income to be earned offshore.
00:35:42.100 | So the big premier territorial tax jurisdictions would be places like Hong Kong, Singapore,
00:35:48.040 | close to the United States would be Panama, Costa Rica, Nicaragua, what else?
00:35:54.480 | There's Malaysia, there's a bunch of them.
00:35:56.840 | There's Paraguay sometimes, Uruguay, you could set up a zero tax residency in Uruguay if
00:36:02.120 | you don't sell to Uruguay.
00:36:04.880 | And so there'd be a number of different ways that depending on the country that you're
00:36:07.440 | going to where you can set it up.
00:36:09.880 | And so let's say that she has her company in a foreign country and let's say you move
00:36:15.620 | to Singapore, right?
00:36:16.740 | But she runs her business through a Panama IBC.
00:36:19.140 | Well, in that situation, because her income is being earned outside of the jurisdiction
00:36:24.020 | of Singapore, she wouldn't owe the Singapore government any taxes on her income because
00:36:29.700 | she's not earning any income in Singapore.
00:36:31.940 | You would because you're earning income in Singapore, but she would not.
00:36:36.180 | And there are bunches, about 25 territorial tax countries in the world that you could
00:36:39.720 | consider that have those kinds of laws.
00:36:42.320 | I think that's the most just system of income taxation.
00:36:46.300 | So I think those are good signs of a good place to go, but that's the answer.
00:36:55.640 | So I think I've answered all your questions.
00:36:58.980 | They are complex though.
00:37:00.120 | And the reason why you're getting a lot of different answers on this stuff is because
00:37:03.880 | it's extraordinarily complex.
00:37:05.700 | You've got to deal with basically four different sets of tax codes.
00:37:09.560 | You have to deal with income taxes and employment taxes in the United States.
00:37:13.920 | And then you have to deal with income taxes and employment taxes in the country, in your
00:37:17.820 | destination country.
00:37:19.520 | And those are all very intertwined and it's very unusual that you would find somebody
00:37:24.720 | who is competent in all of those things.
00:37:26.400 | I'm not even competent because there's so many countries in the world.
00:37:29.120 | So I'm giving you broad brush advice.
00:37:31.900 | But what you would want to do is you would want to get advice from the US perspective,
00:37:35.860 | which I've just given to you, and then you would want to get advice in your local perspective.
00:37:39.620 | And so you'll need to speak to somebody locally because the Irish laws are going to be very
00:37:43.460 | different than the Dubai laws.
00:37:44.940 | It would be very different than the Panama City laws.
00:37:47.560 | And so you do need that local expertise, but that's why you're getting a bunch of different
00:37:51.840 | answers.
00:37:53.500 | The most important thing that you're going to need to home in on is what country you're
00:37:58.420 | actually going to be working in because that's going to make all the difference in the world
00:38:04.260 | in terms of what tax treaties does that country have.
00:38:08.680 | So if you were a Brit, right, and you come to me and I'm doing tax planning, well, what
00:38:12.140 | you do, the first thing you do is sit down and say, "What are the tax treaties that each
00:38:14.460 | country has?"
00:38:15.860 | And so this makes all the difference in the world with where you go.
00:38:19.380 | For US citizens, it doesn't.
00:38:21.380 | And that's why I'm zooming in on, and I made very clear that this structure was very different.
00:38:28.260 | But because for US citizens, it doesn't matter where you go.
00:38:31.140 | And for US citizens, you can live totally tax-free if you're willing to move around
00:38:35.360 | and not become a tax resident of another place.
00:38:37.980 | But that's very different than if you for other people.
00:38:42.220 | And so what would happen is depending on the country you go to, that's going to drive the
00:38:47.200 | exact taxes that you're exposed to.
00:38:51.940 | You could move to, I mean, there's so many little tax havens that you could do.
00:38:56.700 | I can't give more examples, otherwise I'd just go too far off.
00:39:00.300 | But it matters where you go to.
00:39:03.720 | So let's say that you say, "Okay, I'm going to move to Portugal, and we're going to become
00:39:08.140 | non-habitual residents for Portugal.
00:39:11.500 | And I'm going to teach in a local school, but she's going to maintain a non-habitual
00:39:15.140 | resident scheme so that she can enjoy the tax exemption in Portugal."
00:39:18.700 | Great.
00:39:19.700 | That can work out really well.
00:39:20.700 | In which case, everything is simpler, though.
00:39:22.500 | But it's because of the wrinkles within the Portuguese system.
00:39:28.460 | It's a really good option right now for many people around the world who want a chance
00:39:33.100 | to live in Europe and who don't, again, for non-Americans or if you're trying to create
00:39:39.260 | a tax-efficient thing locally.
00:39:41.700 | If you want to live in Europe, but you want to live in Europe tax-efficiently, applying
00:39:47.240 | for the Portugal Golden Visa program and becoming a non-habitual tax resident gives you access
00:39:51.260 | to the European Union, gives you the ability to live there, and you can eliminate your
00:39:55.860 | taxes or keep them very low, depending on the deal that you set up, for 10 years.
00:40:01.620 | And that's really powerful.
00:40:03.460 | But that's a unique thing to Portugal that Spain does not offer.
00:40:06.660 | So clarify the country you're going to and then research that country's taxes.
00:40:13.300 | And then part of your research will then have to go to what tax treaties does that country
00:40:18.180 | have.
00:40:19.180 | At the end of the day, what I would say is don't make your decision based exclusively
00:40:25.140 | on taxes.
00:40:26.140 | I think, you know, I'm a nerd about taxes.
00:40:30.220 | It's important to me.
00:40:31.220 | I see the value of saving money on taxes.
00:40:33.620 | At the end of the day, though, if saving money on taxes causes you to try to have to live
00:40:40.020 | somewhere where you don't want to live or causes you to try to have to do something
00:40:44.020 | that you don't want to do or live a lifestyle that you don't want to live, then it just
00:40:48.660 | doesn't seem worth it.
00:40:51.020 | It doesn't seem worth it.
00:40:52.420 | Now as a balancing factor, let's say you're trying to choose between do I want to live
00:40:57.700 | in Moscow or do I want to live in London?
00:41:03.720 | And I can live in Russia and I can pay 10 or maybe 13% on my income.
00:41:07.300 | Or if I live in London, I'm not going to be a non-domiciled.
00:41:11.300 | I'm going to, you know, oh, 50%.
00:41:15.740 | All of a sudden now Moscow is looking a little bit better.
00:41:18.580 | You know, Russia is a very, very reasonable low tax place.
00:41:23.100 | And you know, I want to live in the culture.
00:41:24.640 | But it can't be just the only thing.
00:41:26.120 | If you don't want to live in Russia and you're just moving there for income taxes, it's not
00:41:29.740 | going to work.
00:41:30.740 | But if you want to live in Russia because you like the culture and you enjoy, you know,
00:41:35.060 | the city and you enjoy everything about it and the taxes is one, you know, cherry on
00:41:39.260 | top, then I think it makes sense.
00:41:41.100 | I just don't think it makes sense to start with tax planning as your primary solution.
00:41:46.440 | Most people who leave the United States don't leave for the purpose of tax savings.
00:41:49.960 | Most people leave the United States move to higher tax jurisdictions, right?
00:41:52.300 | They move to Canada.
00:41:53.300 | They move to Mexico.
00:41:54.700 | They move to the UK.
00:41:56.060 | They move to Australia.
00:41:57.220 | All of those jurisdictions are higher tax jurisdictions in the United States.
00:42:00.540 | Very few people live in the Bahamas full time just because they can do it with no tax.
00:42:05.300 | Now that varies depending on the amount of income that you're earning.
00:42:11.140 | If you're making, you know, I remember a year or so ago there was a guy who called into
00:42:17.900 | the show who had been living in the Cayman Islands.
00:42:20.060 | I think he was making half a million, $700,000 a year, something like that.
00:42:23.340 | Well, the US taxpayer is paying a couple hundred thousand dollars per year of taxes to the
00:42:27.740 | United States and for what?
00:42:30.780 | For what benefit, right?
00:42:31.860 | So he can hold a blue passport, didn't go back to the United States, lives in the Cayman
00:42:36.100 | Islands.
00:42:37.100 | In that situation, it's stupid.
00:42:39.300 | I think it's silly.
00:42:41.740 | Stupid was too strong.
00:42:42.740 | In that situation, it's silly.
00:42:44.220 | Why should you pay the United States $250,000 a year of taxes when you could just simply
00:42:50.000 | go and buy yourself a, you know, a citizenship with any of the Caribbean citizenship by investment
00:42:57.260 | programs, Dominica or St. Kitts or Granada or St. Lucia, any of them, right?
00:43:01.860 | Buy yourself a citizenship from any of those for $100,000 to $200,000 and renounce your
00:43:07.340 | US citizenship.
00:43:08.620 | And now every year going forward, all of your income is now income tax free from the benefit
00:43:14.420 | of living in the Cayman Islands.
00:43:16.040 | Because if you are a, you know, a Dominican living in the Cayman Islands earning $700,000
00:43:22.740 | a year, the full $700,000 is going right in your pocket instead of siphoning off $250,000
00:43:29.580 | to go to the US government.
00:43:31.420 | In that kind of situation, it makes a lot more sense to think carefully about tax planning
00:43:36.540 | because the numbers are big.
00:43:37.880 | But if you're earning $50,000 as a teacher, as a classroom teacher, the tax obligation
00:43:44.260 | of $50,000 as far as income taxes is not so substantial that it's going to be life-changing
00:43:51.080 | for you.
00:43:52.080 | And so in that situation, I think you go, "Where do I want to go?"
00:43:55.420 | And so hopefully that gives a little texture to the advice, but I think it's a great question.
00:44:00.940 | Hopefully my answer helps you.
00:44:02.260 | And I would say good luck.
00:44:03.260 | Hope you enjoy it.
00:44:04.260 | Thank you all for listening to the show.
00:44:05.580 | If you'd like more information, remember I have a course on a lot of, which is based
00:44:10.380 | on international relocation called How to Survive and Thrive During the Coming Economic
00:44:14.580 | Crisis.
00:44:15.580 | You can find that at radicalpersonalfinance.com/store.
00:44:18.020 | Check that out there, radicalpersonalfinance.com/store.