""You have to really be physically present for 11 out of 12 months in the foreign jurisdiction, or look like someone who intends to be there for a long time.""
""Only earned income is shielded. So passive income like dividends from investments, interest, or capital gains may still be taxable.""
""People should not completely forget about the US as you work from a mountain-top villa or seaside cabana, as you can only claim an exemption by filing.""
Americans living abroad are subject to U.S. taxes due to citizenship-based taxation. The Foreign Earned Income Exclusion allows them to exclude $130,000 of earned income in 2025, increasing to $132,900 in 2026. To qualify, individuals must be outside the U.S. for at least 330 days in a rolling year or demonstrate intent to reside abroad. Only earned income is excluded, leaving passive income taxable. Some countries offer low or no tax residency options, but U.S. tax obligations remain, requiring filing for exemptions.
Read at Conde Nast Traveler
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