Remote work has made it easier for many people to live the digital nomad lifestyle, working while traveling and living in different parts of the world. It’s a great way to explore new places, experience different cultures, and have a flexible work schedule, all while keeping your career on track. However, taxes can be tricky. As a digital nomad, you’ll have more responsibilities than someone working a regular, traditional job, and you’ll need to do some extra work. Don’t worry; we’ve gathered everything you need to know. In this blog, SCL Tax professionals will explain how to file taxes as a digital nomad and provide you with some practical tips to get ready for tax season as a part of the digital nomad community.
The first step you need to take before filing taxes is recognizing your tax obligations.
As a citizen of the U.S., you must report your income, regardless of where you live or work. Which means that whether you are traveling or living outside the U.S. all year, you still have to file your federal tax return.
If you live in New York, and especially the Bronx, you may also have to pay state taxes.
Our team at SCL Tax Services provides personalized tax services in and near the Bronx, ensuring you meet your federal and state tax obligations smoothly.
If you’ve spent most of the year outside the U.S., you might qualify to exclude a significant portion of your income under the FEIE. However, the eligibility criteria can be tricky, and this is where a professional tax accountant can help.
Digital nomads often work as freelancers or run their own businesses. If that’s your situation, self-employment taxes are inevitable. They cover Social Security and Medicare contributions and are calculated based on your net earnings.
Depending on where your tax home is, you may still owe state taxes, even if you haven’t been physically present in your home state. Our Bronx tax services can help Bronx residents get rid of these complexities smoothly.
Tracking your income and expenses is essential, whether you’re working remote gigs or managing a small business. Keep a record of invoices, receipts, and expenses like travel, equipment, and internet costs.
This helps you stay organized, avoid surprises at tax time, and ensure you’re claiming all possible deductions. Proper record-keeping also makes it easier to spot trends in your finances and plan for the future.
Based on how you earn your income, here are the most common tax forms for digital nomads that you can use:
For reporting your individual income.
For reporting business income if you’re self-employed.
For claiming the FEIE.
For the foreign tax credit if you’ve paid taxes in another country.
Dealing with all these forms can feel like a lot to handle. That’s why having a tax professional can make the process easier and stress-free.
Running a business as a digital nomad comes with extra tax responsibilities. You’ll need to report your profits, claim deductions for expenses, and might even have to pay quarterly estimated taxes. Our professional tax accountants are now going to guide you with this.
Your business structure impacts your tax responsibilities. Common structures include:
Simple setup but no personal liability protection.
Offers liability protection and flexibility in taxation.
More complex but can offer tax-saving benefits.
Tracking your income and expenses is a crucial part of being tax compliant. To do the best, you can utilize these tips:
Use tools like QuickBooks for income tracking.
Keep business and personal accounts separate.
Track airfare, accommodations, and meals related to your business.
It can be really confusing for digital nomads to get a hold of their taxes. But at SCL Tax Services, we really take care of fulfilling all the unique tax needs of digital nomads, freelancers, and small business owners. Here is how we make your lives easier:
We ensure all your income sources and deductions are accounted for you based on your situation, helping you to minimize your tax liability.
Our team of expert tax accountants is capable of handling the specific requirements of digital nomad small businesses and freelancers, ensuring you meet your obligations and maximize deductions.
SCL Tax Accounting Team Keep your finances organized so you can focus on growing your career, not your paperwork.
As a tax service company based in Bronx, NY, we have the knowledge and expertise to make sure you won’t have troubles with both federal and state tax.
SCL Tax Services makes managing your income, expenses, and tax preparation simple and stress-free. We totally know how busy life can get, especially when being a part of the digital nomad community. That’s why we are here to help while you focus on growing your career and enjoy exploring the world; we’ll take care of the details. Our team of experts is here to help you stay organized and overcome even the toughest tax laws. Reach out to us today to schedule a consultation, and let us give you the peace of mind that comes with knowing your taxes are in safe hands.
Yes, U.S. citizens must report their worldwide income, even if they live abroad all year. Filing a federal tax return is mandatory, and depending on your situation, state tax obligations might also apply.
Yes, if you’re a freelancer or self-employed, you are required to pay self-employment taxes, which cover Social Security and Medicare contributions.
Form 1040: For individual income reporting.
Schedule C: For reporting business income if self-employed.
Form 2555: For claiming the FEIE.
Form 1116: For claiming foreign tax credits.
Use accounting tools like QuickBooks, separate your personal and business finances, and maintain detailed records of travel costs, equipment, and other work-related expenses.
We are here to relieve you of the tax pressure by offering a wide range of Tax Services In & Near Bronx, NY. If you need expert advice or need us to complete your taxes, we will provide it for you. We know you work hard, so we work hard to serve your needs.
Your time is valuable, which is why we are here for you.