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How does a Perpetual Traveler / Permanent Tourist LEGALLY pay ZERO INCOME TAXES on the cheap?

by magentawave
23 replies
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I plan on traveling a lot and will be out of the US for many months per year and want to know how I can LEGALLY pay no income taxes. I said LEGALLY because I don't want to be looking over my shoulder and I still want to visit family and friends in the US.

I guess I will be what is called a PT then (Perpetual Traveler / Permanent Tourist).

I was born in Canada and have a Canadian passport and Canadian birth certificate but I am an LPR (Legal Permanent Resident) of the USA with a US Green Card.

I'm not sure if this is correct, but I think I read many years ago that if an LPR is out of the US for six months per year then they aren't liable to pay US income taxes on money made outside of the US.

I have also read that the key is to have residency in a country with no income tax, like Paraguay, do your banking in another country, and live wherever you choose.

Questions that come to mind are...

1) Are there hosts outside the US that are as good as Hostgator when it comes to tech/customer support?

2) What about reliable offshore payment processors?

3) I know some people spend thousands on creating offshore corporations but I was wondering if its possible to do this on the CHEAP?

4) Would I need to dump my US LPR status to do this?

Thanks
#permanent tourist #perpetual traveler
  • Profile picture of the author Kay King
    What you need to do is talk to an attorney who specializes in international law or an attorney specializing in US tax law. You don't need forum opinions because that's just what they are.
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    • Profile picture of the author magentawave
      Thanks but forum opinions can be a good start for finding out where to go next. :-)
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      • Profile picture of the author ThomM
        Originally Posted by magentawave View Post

        Thanks but forum opinions can be a start for finding out where to go.
        True and Kay gave you that information.
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        • Profile picture of the author magentawave
          Yes thank you but I haven't had the greatest experiences with lawyers so I'd like to read about how others are doing this before I start throwing money at an attorney.

          I'm talking LEGAL here people.

          Originally Posted by ThomM View Post

          True and Kay gave you that information.
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          • Profile picture of the author ThomM
            Originally Posted by magentawave View Post

            Yes thank you but I haven't had the greatest experiences with lawyers so I'd like to read about how others are doing this before I start throwing money at an attorney.

            I'm talking LEGAL here people.
            I can't argue with that I also tend to avoid them as much as possible.
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          • Profile picture of the author Alexa Smith
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            Originally Posted by magentawave View Post

            I'd like to read about how others are doing this before I start throwing money at an attorney.

            I'm talking LEGAL here people.
            You genuinely can't see the conflict between repeatedly stressing that you're talking "LEGAL" while also wanting to avoid paying for legal advice from someone who's actually qualified and licensed to give it?

            http://www.warriorforum.com/main-int...al-advice.html


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            • Profile picture of the author magentawave
              Uh, when did I say that I didn't want to pay for legal advice? I NEVER said that. I only said I wanted to hear from others whats going on out there BEFORE I start coughing up the bucks for legal advice.

              We all know there is a world of difference between tax evasion and tax avoidance, and considering Snowdens revelations of how we are being watched, I thought it would be wise to reiterate "LEGAL" in case it was preventing others from participating in this thread. Do you understand now? :-)


              Originally Posted by Alexa Smith View Post

              You genuinely can't see the conflict between repeatedly stressing that you're talking "LEGAL" while also wanting to avoid paying for legal advice from someone who's actually qualified and licensed to give it?

              http://www.warriorforum.com/main-int...al-advice.html


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  • Profile picture of the author Joe Mobley
    2 things:

    1) I am not a tax or legal expert! Do your own due-diligence. Be responsible for yourself.

    2) Think of the things I mention below as "items to think about", not "what you should do."

    Okay, 3 things.

    3) I am a US citizen. I do not pay taxes as a moral obligation. I pay taxes as a prison avoidance strategy. It has worked so far.

    Here we go...

    The US is one of a very few countries that taxes it's citizens on world-wide income. You Canadian citizenship may be a blessing to you here. It's possible that you would only pay US taxes on income earned from doing business in the US. You may also get a tax deduction on your Canadian taxes for any taxes paid in other jurisdictions. Check!!!

    I have also read that the key is to have residency in a country with no income tax, like Paraguay, do your banking in another country, and live wherever you choose.
    This is a variation of the Five Flags theory. Have a look here.
    Perpetual traveler - Wikipedia, the free encyclopedia

    3) I know some people spend thousands on creating offshore corporations but I was wondering if its possible to do this on the CHEAP?
    You can setup a business entity in the British Virgin Islands for less than $1,000 US. You can open a bank account in Belize over the Internet.

    Let me suggest that unless you are making "serious" money, your concerns are a bit overblown. Check with a competent Canadian tax and legal adviser who is experienced in International tax law! Do some research, have your questions in order and meet with your adviser. Probably less than $400 US.

    Let us know how you do.

    Joe Mobley



    Originally Posted by magentawave View Post

    I plan on traveling a lot and will be out of the US for many months per year and want to know how I can LEGALLY pay no income taxes. I said LEGALLY because I don't want to be looking over my shoulder and I still want to visit family and friends in the US.

    I guess I will be what is called a PT then (Perpetual Traveler / Permanent Tourist).

    I was born in Canada and have a Canadian passport and Canadian birth certificate but I am an LPR (Legal Permanent Resident) of the USA with a US Green Card.

    I'm not sure if this is correct, but I think I read many years ago that if an LPR is out of the US for six months per year then they aren't liable to pay US income taxes on money made outside of the US.

    I have also read that the key is to have residency in a country with no income tax, like Paraguay, do your banking in another country, and live wherever you choose.

    Questions that come to mind are...

    1) Are there hosts outside the US that are as good as Hostgator when it comes to tech/customer support?

    2) What about reliable offshore payment processors?

    3) I know some people spend thousands on creating offshore corporations but I was wondering if its possible to do this on the CHEAP?

    4) Would I need to dump my US LPR status to do this?

    Thanks
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    • Profile picture of the author magentawave
      I have read quite a bit about PT's but no specifics in my case being that I am Canadian with a US Green Card.

      Yes, anyone that pays taxes for moral reasons is ignorant considering that ALL US income tax revenue goes to pay the interest the US Treasury owes the federal reserve banksters for the fiat money they use to fund all their wars, etc. So I, like you, pay my taxes as protection from being kidnapped and thrown in a cage just like small businesses had to pay the mafia back in prohibition days.


      Originally Posted by Joe Mobley View Post


      3) I am a US citizen. I do not pay taxes as a moral obligation. I pay taxes as a prison avoidance strategy. It has worked so far.
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      • Profile picture of the author Enfusia
        Your best method really is to pay your taxes - let me explain.

        You form a corp for your business which includes a travel blog because you are a PT> the corp hires you and pays you just over poverty so you pay a couple hundred a year> the corp pays your rent, travel, food, clothes.

        You can of course go deeper but that's what big business does.

        You can form an advertising agency in another country and pay it most of your profits to promote you. In this way you're moving assets out of here. If you need to repatriate funds just loan yourself money from outside the country etc...

        The above are only opinions and in no way offered as legal councel or advice.
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        • Profile picture of the author seasoned
          Originally Posted by Enfusia View Post

          Your best method really is to pay your taxes - let me explain.

          You form a corp for your business which includes a travel blog because you are a PT> the corp hires you and pays you just over poverty so you pay a couple hundred a year> the corp pays your rent, travel, food, clothes.

          You can of course go deeper but that's what big business does.

          You can form an advertising agency in another country and pay it most of your profits to promote you. In this way you're moving assets out of here. If you need to repatriate funds just loan yourself money from outside the country etc...

          The above are only opinions and in no way offered as legal councel or advice.
          Actually, the corp would have to JUSTIFY the expenses! If they can't, it would be considered income, taxed as such, and the corporation could be found to be comingling assets, which is NOT good for its survival. Do you REALLY think M/S paid for Gates meals and suits? I can attest that Bill gates travels a LOT, which is NOT for business! Do you think M/S pays for THAT?

          To hear YOU talk, Buffet doesn't even pay the tax he pays. THAT is so low because he gets a LOT, and sets it up such that it is income that is taxed at a low rate. HECK, he probably even transfers stock in such a way as to buy a company virtually tax free. THAT, of course, is a justifiable business expense though.

          Steve
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          • Profile picture of the author Pura Vida
            Take for instance Mike and Frank from the show American Pickers. They travel the country looking for antiques. I'm sure they are writing off cell phones (biz portion of it), hotels, 50% meals/entertainment, vehicle expenses, gas, etc. A perpetual traveler could do the same with a travel blog or any number of other businesses. Airline tickets, hotels, etc etc.

            As far as documentation requirements, look up the Cohan Rule...

            Getting Audited? Can't Find All Of Your Records? No Problem
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          • Profile picture of the author Enfusia
            Originally Posted by seasoned View Post

            Actually, the corp would have to JUSTIFY the expenses! If they can't, it would be considered income, taxed as such, and the corporation could be found to be comingling assets, which is NOT good for its survival. Do you REALLY think M/S paid for Gates meals and suits? I can attest that Bill gates travels a LOT, which is NOT for business! Do you think M/S pays for THAT?

            To hear YOU talk, Buffet doesn't even pay the tax he pays. THAT is so low because he gets a LOT, and sets it up such that it is income that is taxed at a low rate. HECK, he probably even transfers stock in such a way as to buy a company virtually tax free. THAT, of course, is a justifiable business expense though.

            Steve
            I didn't mean to rile your feathers.

            Of course the Corp would have to justify it etc.. Let's say you are in IM, likely not hard to imagine. You have a travel blog that you monetize telling everyone how you live the internet lifestyle. It's also your main IM biz site. Maybe you call it Banking On The Road.com etc.. So you make a little cash say 20K a month.

            You are a travel writer, you also write for International Living TM or others. The point is, you teach people how to make money and travel at the same time. Cashing in on the beach with a laptop and one of those drinks with the little umbrellas.

            You can write off most everything as a business expense and justify it 100%.

            I couldn't speak to what Mr Gates or Buffet do. They work to maintain a public image, so they show they pay some.

            But, do their Corps pay for homes all over the world they use as satellite offices or retreats, likely yes, do their corps pay for them to do business in great locations that they then have fun in too? I would say likely yes.

            Again, this is not legal or lawful advice, I'm not a lawyer or attorney and as such am not dispensing advice.

            I have however founded and CEO'd 2 corps worth many millions each in my past. I've kept all the spotless records and done all that. Trust me, they don't pay for their suits. Well, ok, one or two so they can say they do on their next interview, but that's about it.



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            • Profile picture of the author Kay King
              Lots of info online about this - including when taxes would be due and what is necessary to keep permanent residency status in the US when you are a "perpetual traveler".

              Taxation of U.S. Resident Aliens

              When Visa or Green Card Holders Must Pay Taxes | Nolo.com

              Retain green card - Useful tips for permanent residents

              Satterlee Stephens Burke & Burke LLP - Publications - Home Away From Home:* Permanent Residents Temporarily Abroad
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            • Profile picture of the author seasoned
              Originally Posted by Enfusia View Post

              I didn't mean to rile your feathers.

              Of course the Corp would have to justify it etc.. Let's say you are in IM, likely not hard to imagine. You have a travel blog that you monetize telling everyone how you live the internet lifestyle. It's also your main IM biz site. Maybe you call it Banking On The Road.com etc.. So you make a little cash say 20K a month.

              You are a travel writer, you also write for International Living TM or others. The point is, you teach people how to make money and travel at the same time. Cashing in on the beach with a laptop and one of those drinks with the little umbrellas.

              You can write off most everything as a business expense and justify it 100%.

              I couldn't speak to what Mr Gates or Buffet do. They work to maintain a public image, so they show they pay some.

              But, do their Corps pay for homes all over the world they use as satellite offices or retreats, likely yes, do their corps pay for them to do business in great locations that they then have fun in too? I would say likely yes.

              Again, this is not legal or lawful advice, I'm not a lawyer or attorney and as such am not dispensing advice.

              I have however founded and CEO'd 2 corps worth many millions each in my past. I've kept all the spotless records and done all that. Trust me, they don't pay for their suits. Well, ok, one or two so they can say they do on their next interview, but that's about it.
              Well, you can even look at SOX where the say that meals are only deductible if it is things like a minor dinner for customers or employees if it has a legitimate business purpose. It is the same with resources used for transportation, which is why they have you keep things like a travel log, and there are still limits even there. If you advertise for business, you can deduct the expense, but if you lose a cat, and advertise to get it back, you can't. You can deduct an office, but not your own living area, except for part you can document is used only for making money at some point, and only to that degree. And if you live off money from a corporation and can't show anything to back such things up, the IRS may consider it income.At one point, they taxed only businesses. To hear you talk, you would think they now tax everyone BUT businesses.

              Steve
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              • Profile picture of the author Enfusia
                Originally Posted by seasoned View Post

                Well, you can even look at SOX where the say that meals are only deductible if it is things like a minor dinner for customers or employees if it has a legitimate business purpose. It is the same with resources used for transportation, which is why they have you keep things like a travel log, and there are still limits even there. If you advertise for business, you can deduct the expense, but if you lose a cat, and advertise to get it back, you can't. You can deduct an office, but not your own living area, except for part you can document is used only for making money at some point, and only to that degree. And if you live off money from a corporation and can't show anything to back such things up, the IRS may consider it income.At one point, they taxed only businesses. To hear you talk, you would think they now tax everyone BUT businesses.

                Steve
                Well, I'm not wanting to argue it with you, I don't have the time. However, just as an example: The corp buys a home for a corp retreat and meeting place (perfectly legal and lawful -they have 2 different meanings). The corp pays you to stay in the home as a carteaker. You receive a couple grand a month and you have free board, internet, lights, heat etc... The corp buys a car for the house and you have to run all of the household errands which covers most everything you do including shopping for food and household items. The car is held in trust so as to not be a liability against assets.

                The corp also hires you for other functions such as car detailer, caretaker etc... You get crappy pay of $200 and you have to drive the car 5 days a week for 30 miles to ensure it doesn't sit and corrode. This covers your other miles.

                Your dog is part of your security control systems mandated by the owners, your cat is vermin control etc.. All food and vet bills are covered.

                It goes on and on. If you don't think what I just said is true then please by all means pay more.

                Like I said, I'm not here to argue. Just wanting to contribute.

                I'm not dispensing legal or tax advice and nothing above should be construed as such.

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                • Profile picture of the author Joe Mobley
                  I'M A LOCATION INDEPENDENT ENTREPRENEUR - WHERE SHOULD I PLANT A COMPANY FLAG?

                  This article is for the digital nomads, business backpackers and digital gypsies whose primary source of income comes from the Internet. "Permanent travelers", PT's with a backpack and a business, to the Nouveau rich.
                  ** > Note: I am on Edmund's email list. I have not done business with him. He does have interesting information if you are of this ilk.

                  Where should the Digital Nomad set up a Company?

                  Joe Mobley
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                • Profile picture of the author RichBeck
                  Originally Posted by Enfusia View Post

                  Well, I'm not wanting to argue it with you, I don't have the time. However, just as an example: The corp buys a home for a corp retreat and meeting place (perfectly legal and lawful -they have 2 different meanings). The corp pays you to stay in the home as a carteaker. You receive a couple grand a month and you have free board, internet, lights, heat etc... The corp buys a car for the house and you have to run all of the household errands which covers most everything you do including shopping for food and household items. The car is held in trust so as to not be a liability against assets.

                  The corp also hires you for other functions such as car detailer, caretaker etc... You get crappy pay of $200 and you have to drive the car 5 days a week for 30 miles to ensure it doesn't sit and corrode. This covers your other miles.

                  Your dog is part of your security control systems mandated by the owners, your cat is vermin control etc.. All food and vet bills are covered.

                  It goes on and on. If you don't think what I just said is true then please by all means pay more.

                  Like I said, I'm not here to argue. Just wanting to contribute.

                  I'm not dispensing legal or tax advice and nothing above should be construed as such.
                  Enfusia,

                  If you step back and look at the ultra-wealthy, that is exactly how they live...

                  They have the best Accountants and Tax Attorneys money can buy.... They formulate a strategy to hit every single loophole possible.

                  Do you think Warren Buffet and William Henry Gates III have a team of people advising them on "tax avoidance?" You bet your life they do!

                  All The Best,

                  Rich Beck BCIP, MCSD, MCIS
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                  • Profile picture of the author Enfusia
                    Originally Posted by RichBeck View Post

                    Enfusia,

                    If you step back and look at the ultra-wealthy, that is exactly how they live...

                    They have the best Accountants and Tax Attorneys money can buy.... They formulate a strategy to hit every single loophole possible.

                    Do you think Warren Buffet and William Henry Gates III have a team of people advising them on "tax avoidance?" You bet your life they do!

                    All The Best,

                    Rich Beck BCIP, MCSD, MCIS
                    Yes sir, you are correct.

                    Patrick

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  • Profile picture of the author candoit2
    Globalization is luring Canadians every year to work, travel or retire in low- or tax-free countries with the mistaken belief that they can shed their tax obligations at home.
    But experts in the field say the only way to legally free yourself of Canadian income tax is to completely sever ties with the country and become a permanent resident elsewhere.
    Do you still have any ties to Canada? I'm assuming you must if you still hold a passport, you need an address etc don't you?

    Things like maintaining provincial health coverage, Canadian bank accounts, cars, membership in social clubs or supporting a spouse and dependent children living in Canada affect your status as a non-resident in the government’s eyes.
    Cadesky warns there are many traps that can ensnare foreign workers who try to navigate through the process without the help of a tax professional.
    “It’s a horrible exercise if you try to do it yourself,” Cadesky said.
    http://www.theglobeandmail.com/globe...ticle17592602/



    Google canadian expat tax services and you will find many services that will give you the correct and updated info you need to lower or eliminate your taxes abroad.

    Aaron

    edit: http://www.continentaltax.com/services.html this one looks like it could be best for you, as they work with both Canadian and USA clients and would have knowledge of both laws and how to apply to your situation.

    Hope that helps, good luck.
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