I just finished my taxes...well, aside from mailing the state returns in and paying the tax. I have a good-sized bill this year.
This is the largest amount I've ever had to pay. It's mostly because of self-employment taxes to the US, but there's also a good chunk for paying back the child credit tax that was sent to so many other people. Apparently, I have to pay it back because I was overseas and claiming the Foreign Earned Income Exclusion (FEIE).
FEIE provides excluding up to $112,000 for 2022 without paying taxes. But the catch is if you're self-employed, you still need to pay ~15.3% in Self Employed Contributions Act (SECA) taxes. There are exceptions depending on the country you live in because of agreements between the US and that country. Unfortunately, Taiwan's not included in that list.
The other way to get around it is if you're hired by a foreign company, which I always was, up until Covid hit. I can't just create a foreign company either to avoid the self-employment taxes, because I own company.
These are the little things that people don't usually talk about when becoming a digital nomad. The perks of working anywhere you want and traveling the world are always the big selling points.
It's important to also look at the finer details and the logistics of living abroad, especially if you're a US Citizen. The US is one of the rare countries that taxes its citizens no matter where they live. The majority of countries do not do this.
If anyone has any tips on how to lower my US taxes, I'd love to get them! Whether pointing me to resources or your own experiences.
Crossing your t's and dotting your i's is also important when it comes to your affiliate websites and online businesses.
You can't just publish content and expect Google to send you thousands of visitors per day.
You can't just create a product and expect to sell thousands to people.
There's a lot of work that goes into our online businesses, especially the little things. Don't ignore the little things!