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Tax Home for American Expats Abroad

Transcript of the above video:

As the title of this video suggests, we are discussing the so-called “Tax Home” of Americans abroad, also known as expats, sometimes called American expatriates. 

I often see this come up in the context of so-called digital nomads; people that work online. They primarily make their living by doing things that are online that don't really require them to be anchored to one specific place. The issue of  a tax home or a tax residence can be important for Americans as well as other nationalities; it is not just confined to Americans. Other nationalities base their tax system on certain domicile issues so getting locked into a “tax home” if you will, can have tremendous positive ramifications for certain individuals who simply want to sort of for lack of better term, “de-domicile” from their home country. For example, Thailand, if one is resident 153 days of a given calendar year, one is considered to have been tax resident in that country or resident for tax purposes. 

It is one of the reasons I think that there are certain things that have changed within the Immigration apparatus here in Thailand is to deal with this issue of tax residence because I think that there are various international agreements wherein countries are not trying to shelter folks that really aren't living in their country from another country's tax system just by dint of someone being physically present in that place. That being said, that is a topic for another video frankly.  

The thing to take into account with respect to this video is getting one's tax home situated can have positive ramifications with respect to filing one's taxes. It can also be a point of clarification because for example things like for example the Foreign Earned Income Exclusion in the United States, there is what is called the bona fide resident's test and issues surrounding tax home for example or tax residence whether one is physically present in a given location for a certain period of time. Or for example, the local definition of what is considered tax resident can play in to the computation or to the analysis if you will or interpretation if you will, of the rules surrounding bona fide residence for purposes of for example Foreign Earned Income Exclusion; that's just one minor example where Tax Home can come up.  Again, it can provide a great deal of clarity when filling out one's tax return because if it is clear where one has been tax resident for a certain period of time, it can make things easier when compiling one's documentation to file for example with the IRS.