A US Guide for Working Remotely From Another Country
Working remotely from another country as a US citizen or resident comes with unique tax, visa, and logistical considerations. This comprehensive guide covers everything you need to know to work legally and tax-efficiently from abroad.
Understanding Your Tax Obligations
As a US citizen or green card holder, you're taxed on your worldwide income regardless of where you live or work. This is fundamentally different from most other countries that use territorial taxation (you're only taxed on income earned within their borders). The US and Eritrea are the only countries that tax based on citizenship rather than residence, which means even if you live in Portugal for five years, the IRS still wants its cut of your income.
The good news: several provisions can dramatically reduce your tax burden. The Foreign Earned Income Exclusion (FEIE) lets you exclude up to $130,000 (2026) of foreign earned income from federal taxes—if you're earning $120K remotely from Portugal, you could pay zero federal income tax. The Foreign Tax Credit (FTC) prevents double taxation by giving you credit for taxes paid to foreign governments. If Portugal taxes you $15K, you get a $15K credit against your US tax bill. The Foreign Housing Exclusion adds another layer, letting you exclude qualified housing expenses on top of the FEIE. Combined, these provisions can reduce your effective US tax rate to near zero for many remote workers living abroad.
The Physical Presence Test
To qualify for FEIE, you must be physically present in a foreign country for at least 330 full days during a 12-month period. Here's what you need to know:
Key Requirements
- • Days don't need to be consecutive
- • The 12-month period can begin on any day
- • Time spent in international waters or airspace doesn't count
- • Brief trips back to the US count against you
- • A full day means the entire 24-hour period (midnight to midnight)
Watch Out
A two-week trip home for the holidays could disqualify you if you're close to the 330-day threshold. Plan your US visits carefully and track every day.
Visa Considerations
Tourist visas typically don't allow you to work legally in a foreign country, even if you're working for US clients remotely. Here are your options:
Digital Nomad Visas
Portugal, Spain, Croatia, Estonia, and 50+ other countries now offer specific visas for remote workers.
Duration: 1-2 years typically
Freelancer Visas
Germany, Netherlands, and other countries have self-employment visas for freelancers and consultants.
Duration: 1-3 years typically
Popular Digital Nomad Destinations
Portugal
D7 visa, NHR tax regime (10% flat tax for 10 years), thriving tech scene in Lisbon and Porto
Mexico
180-day tourist visa, same time zones as US, low cost of living, excellent internet
Thailand
New LTR visa for remote workers, extremely affordable, excellent infrastructure in Bangkok/Chiang Mai
Colombia
Digital nomad visa available, Medellin's perfect weather, growing expat community
Banking and Money
Having the right financial setup is crucial for international remote work. Here are the essentials:
- Charles Schwab Investor Checking
No foreign transaction fees, unlimited ATM rebates worldwide
- Wise (formerly TransferWise)
Multi-currency account with real exchange rates, local bank details in 10+ currencies
- Mercury
Business banking with international wire support and no monthly fees
Key Takeaways
- 1.You're still subject to US taxes on worldwide income as a US citizen
- 2.FEIE can exclude $130,000+ if you meet the physical presence or bona fide residence test
- 3.Get proper visas—tourist visas usually don't allow remote work legally
- 4.Set up international-friendly banking before you leave
- 5.Consider your state tax residency carefully—some states continue taxing you