Thanks everyone for all the info. I think once I establish a residency in an income free state and perhaps buy a small property there and hire one of those mail directing services, I can just claim I am a resident of WY or SD or Nevada or something and not have to worry about income tax there.
I am a US citizen but plan to live in Europe and travel around for a few years.
- Thread starter invortex
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Without an special visa you can stay only less than 90 days in a period of 180 days inside scheguen area. If you spend 90 days in Spain you must to exit scheguen area, without and special visa you can't stay 90 days in each country.
In some countries of scheguen area if you stay more than 183 days in the same year you become fiscal resident and you must pay taxes in that country.
It consumed a lot of my time to do due diligence and I had to pay for consultation fees in order to obtain the right information that I want. So why do I want to disclose everything here for free? All I were trying to do is to be nice to provide tips so OP or others could use to do his own DD.
It's important to note that the state you have to convince isn't WY or TX or whatever state you want to claim residence in without having lived there. The state you have to convince is the state you last lived in which presumes you owe them taxes on your worldwide income until you can prove that you are no longer a resident of their state. Which requires you either become a resident of another state or give up your US citizenship (which presumably isn't in the cards). There is no bright line test that you've become a resident of another state, we had whole lectures on this in the military from our attorneys, basically getting as many things like drivers license, voter registration, owning a house you live in....plus living there, was the safest route. But again, if you're leaving FL to claim TX residency no one cares. If you're leaving NY they care a lot and simply having a mail box and driver's license but never having spent any time in another state has a high probability of not passing muster with their tax folks.
So moral of the story, if you're leaving a high tax state hire a tax attorney to make sure you get it right. The advice here is dangerously misleading or just plain wrong. If you're leaving a low or now tax state, don't worry about it, but then you wouldn't be asking the question if that was the case, would you?
So moral of the story, if you're leaving a high tax state hire a tax attorney to make sure you get it right. The advice here is dangerously misleading or just plain wrong. If you're leaving a low or now tax state, don't worry about it, but then you wouldn't be asking the question if that was the case, would you?
Bingo.
You'll be surprise by how many expats avoid doing such and then follow the advice of anonymous people online.
I've heard of many people that take advice from anonymous people instead of talking to the IRS, tax accountant or tax lawyer to later get a notice about penalties or worst (an audit) while they are living abroad.
Yeah, ususally the stories involves some celebrity (rich person) with a 2nd home in Spain or Portagal under some headline in the newspaper like tax evasion.
wrbtrader
Just to be clear, this isn't an IRS issue. A U.S. citizen owes taxes on their worldwide income regardless, although there are tax treaties to avoid double taxation on the first $X in some countries. This is a state tax question, basically asking if you lived in say, NY, and then moved to Spain, how could you make your state of residence Texas or another low tax state to avoid paying NY state income tax. It's a quirk resulting from the federated nature of the U.S. that you have to be a resident of some state, even if you don't live in the country, for tax, voting, drivers license, and many other purposes.