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0 pointssiberianbear11y ago0 comments

The Earned Income Exclusion, as its name applies, only applies to "earned" income. It doesn't apply to capital gains or dividends. Having reviewed the form in detail, I also believe that self-employed US citizens working abroad with US-sourced self-employment income (i.e., digital nomads) also need to play the ~15% self-employment tax, even if you're able to get out of the "normal" income tax with the Foreign Income Exclusion.

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maxerickson11y ago

I think it is much more likely that digital nomads are operating unlicensed businesses in foreign countries than it is that they are earning "US sourced self-employment income".

It could well be easy to import the earnings into some country while characterizing it as US sourced self employment income. That doesn't mean it is actually compliant with the regulations of that country.

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