Ever wondered how these instagram influencers can travel the world for free?
Unfortunately I found out it’s because they’re super hot and companies pay them to advertise, so for most of us common folk, it’s just not going to work.
Is there another way? One where us normal looking, normal jobbed people can do it?
Luckily for us, there is.
The Travelers Tax Loophole
The following is how I plan to travel the world for free.
There is a travelers tax loophole out there available to the masses called the foreign earned income exclusion.
It is hidden in plain sight in the tax code and this blog covers it in depth.
The main takeaway from it is:
Stay out of the US for 330 days out of 365 and pay no federal income taxes. This does not have to be from January 1st- December 31st. Any 365 day period will do.
If you want to read it yourself look here: IRS: FEIE
There are obviously some additional rules that go with it, but none are difficult to follow. The details of what exactly the FEIE is, are here: What is the FEIE?
The reason it exists is because people that are working outside of the country for most of the year do not use all of the resources that people within the country do (infrastructure, education, etc.).
So why should you have to pay the taxes for these resources?
Examining the Foreign Earned Income Exclusion From A Better Lens
If you rephrase the main takeaway above but keep its meaning, it could go something like this:
Travel the world for 330 days out of 365 and use all of the money you would have spent on taxes on seeing the world.
Show Me How the Math Works
Assumptions: You live in California, make $110K/year and can work remotely.
Your current tax situation:
|Total Fed & State Tax Owed||$25,900|
Your new tax situation:
|Total Fed & State Tax Owed||$0|
*Your state taxes could also go to $0 by switching your state of residence, which is actually quite easy to do. We cover that here: Eliminate State Taxes
This leaves you with an extra $25,900 to spend on your world travels before you touch a dime of your hard earned money.
In other words, if you travel for 330 days, that gives you an extra $2,354 per month or $78.48 every. single. day.
Plus anything you save from giving up your apartment and car.
Depending on where in the world you are, that can go a long way.
Ok, But I Have a 9-5 and I Cannot Leave the Country for that Long
At this time it probably makes sense to introduce myself.
My name is Jack, I am an American, earning around $100K/year running an ecommerce business and living in California.
My situation is somewhat unique, but I want to be clear that entrepreneurship is not the only method to pull this off.
You could be earning an income as an employee, as a freelancer or something else.
I will admit that this really works the best for people that can work remotely that have a reasonably high earning power.
Regardless, this traveler loophole is there for you.
Right Now Might Not Be Your Time
This blog is meant to help as many people escape the rat race as possible but it may not be directly relatable at this point in your career.
Never too early to start planning though.
Through the articles on our site you will find ideas for how to go remote either with your current job or with a new one.
Ok Great, So What is Your Plan?
I am going to begin referring to completing the 330 days as The 330 Day Challenge.
My plan is to:
Travel for one year for free on my federal and state taxes. I will return back to the US for holidays, weddings etc. but for no more than 34 days.
I will work on my e-commerce business full-time as well as keep a blog here at 330Days.com.
I will use co-living options for a sense of community. The best way to describe co-living is putting twenty young freelancers, entrepreneurs, creatives in a house in a fun international city. Yes – this exists. I have done them in the past. Imagine a far less trashy Real World.
I will never plan locations more than 2 months in advance because you meet people, experience events that change what you value and want to see.
Throughout this blog series, the other contributors and myself will walk you through how I structured my taxes and life to make this possible. Hopefully this will inspire someone to do the same.
Please post comments or questions and I will answer them as openly as I can.
Also, if you are interested in connecting with other people who are attempting this join our Facebook Group.