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I'm an overseas developer myself, currently sitting on a point break in Morocco enjoying perfect wifi, powering it all with solar panels. I'm pretty sure that

I'm an overseas developer myself, currently sitting on a point break in Morocco enjoying perfect wifi, powering it all with solar panels. I'm pretty sure that the 100,000 IRS deduction is only for income earned from a foreign source. So, if you are like me and have your income coming from Apple app store sales, then you still need to pay your taxes, without a deduction. Basically, the big problem with working out of the US is that nearly all countries pay way less for software development. Thems the breaks.

jasonkester 12y ago
Taghazout perhaps? If so, it's good to hear that you can get good wifi there now. I spent a few weeks there back in 2008 and the only internet access was a tiny sweaty one room place with dialup speeds and no AC. Considering how comfortable and cheap those houses along the front were, I've always wanted to head back there and set up shop for an entire season. Sounds like that might actually be possible now. Good news.
- codecamper 12y ago
  Yes Taghazout. But you can get great 3g in Mirleft, Agalou, and almost any spot along any road in Morocco now. Same with the rest of the world too. Almost anywhere we go we get great 3g. 3g is about $1 / GB here now. Sub 100ms ping times often so we can Skype (or goog voice) easily.
jasonkester 12y ago
Here's the relevant section explaining that yes, income from a US company is just groovy for use with the Foreign Earned Income deduction: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---What-is-Foreign-Earned-Income http://www.irs.gov/Individuals/International-Taxpayers/Forei... Source of Earned Income The source of your earned income is the place where you perform the services for which you received the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in France is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is located in New York City.
- codecamper 12y ago
  Interesting! I stand corrected. Next thing I don't understand with that document is what is "earned" income. Are app store sales "earned?" I'd say so... constantly having to update the software -- I'm earning it.
  - patio11 12y ago
    Your profits resulting from sales on the App Store (less such expenses as are reasonable and necessary to achieve that income) are, unquestionably, earned income resulting from your personal contribution to a business. http://www.irs.gov/Individuals/What-is-Earned-Income http://www.irs.gov/Individuals/What-is-Earned-Income Most forms of "unearned income" are where you're getting compensated primarily for capital rather than labor. For example, if you were to sell the business, the proceeds from the sale would ordinarily not be earned income. (There are sticky wickets around that question, which you'd want to ask a competent professional adviser about. Any adviser who tells you App Store income is unearned just lost their status as a competent adviser.)
    - codecamper 12y ago
      Yup, it seems that it may be OK for me to claim the Foreign Earned Income Exclusion. Too bad I didn't know about it and stayed too long in the US during 2010-2012. Still... for 2013 and on, I think I can claim it. Last piece of the puzzle is the tax home. I travel from country to country about every 3 months. Do I even have a tax home?
  - semperfaux 12y ago
    Is this facetious? Because it's a little funny to expect the IRS to be so literal. In my experience, either it's "earned" in that it's been paid directly to you or it's indirect income (e.g. dividends you were paid on an investment you aren't directly working on or appreciation you haven't collected on) that are still going to be taxed on in one way or another.
    - codecamper 12y ago
patio11 12y ago
You have received terrible tax advice. Self-employment income is sourced where you performed the work which earned it, not where the money changed hands. Ask me if you want voluminous citations on this.
sschueller 12y ago
The IRS needs to stop taxing US citizens abroad. It is draconian and taxation without representation. Even if you don't own any taxes you need to declare all assets over 10k and file a return. The US is the only country (other than Eritrea) that does this taxing of people who don't earn in the US. Isn't part of the reason the US exists because certain people no longer wanted to pay taxes to the king of England? Many are giving up citizenship because of this but now the price to do that has risen 400% to over $2000 just for processing not including any back taxes you may need to pay.

jasonkester 12y ago

Taghazout perhaps? If so, it's good to hear that you can get good wifi there now. I spent a few weeks there back in 2008 and the only internet access was a tiny sweaty one room place with dialup speeds and no AC. Considering how comfortable and cheap those houses along the front were, I've always wanted to head back there and set up shop for an entire season. Sounds like that might actually be possible now. Good news.

codecamper 12y ago
Yes Taghazout. But you can get great 3g in Mirleft, Agalou, and almost any spot along any road in Morocco now. Same with the rest of the world too. Almost anywhere we go we get great 3g. 3g is about $1 / GB here now. Sub 100ms ping times often so we can Skype (or goog voice) easily.

jasonkester 12y ago

Here's the relevant section explaining that yes, income from a US company is just groovy for use with the Foreign Earned Income deduction: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---What-is-Foreign-Earned-Income http://www.irs.gov/Individuals/International-Taxpayers/Forei... Source of Earned Income The source of your earned income is the place where you perform the services for which you received the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in France is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is located in New York City.

codecamper 12y ago
Interesting! I stand corrected. Next thing I don't understand with that document is what is "earned" income. Are app store sales "earned?" I'd say so... constantly having to update the software -- I'm earning it.
- patio11 12y ago
  Your profits resulting from sales on the App Store (less such expenses as are reasonable and necessary to achieve that income) are, unquestionably, earned income resulting from your personal contribution to a business. http://www.irs.gov/Individuals/What-is-Earned-Income http://www.irs.gov/Individuals/What-is-Earned-Income Most forms of "unearned income" are where you're getting compensated primarily for capital rather than labor. For example, if you were to sell the business, the proceeds from the sale would ordinarily not be earned income. (There are sticky wickets around that question, which you'd want to ask a competent professional adviser about. Any adviser who tells you App Store income is unearned just lost their status as a competent adviser.)
  - codecamper 12y ago
    Yup, it seems that it may be OK for me to claim the Foreign Earned Income Exclusion. Too bad I didn't know about it and stayed too long in the US during 2010-2012. Still... for 2013 and on, I think I can claim it. Last piece of the puzzle is the tax home. I travel from country to country about every 3 months. Do I even have a tax home?
- semperfaux 12y ago
  Is this facetious? Because it's a little funny to expect the IRS to be so literal. In my experience, either it's "earned" in that it's been paid directly to you or it's indirect income (e.g. dividends you were paid on an investment you aren't directly working on or appreciation you haven't collected on) that are still going to be taxed on in one way or another.
  - codecamper 12y ago

patio11 12y ago

You have received terrible tax advice. Self-employment income is sourced where you performed the work which earned it, not where the money changed hands. Ask me if you want voluminous citations on this.

sschueller 12y ago

The IRS needs to stop taxing US citizens abroad. It is draconian and taxation without representation. Even if you don't own any taxes you need to declare all assets over 10k and file a return. The US is the only country (other than Eritrea) that does this taxing of people who don't earn in the US. Isn't part of the reason the US exists because certain people no longer wanted to pay taxes to the king of England? Many are giving up citizenship because of this but now the price to do that has risen 400% to over $2000 just for processing not including any back taxes you may need to pay.