Digital nomadism is on the rise, and no mistake about that. More and more people are realizing the benefits of this lifestyle and are interested to try it out.
Before you decide to do that, however, you should do proper research on both benefits and downsides and see if the moment is right. Do some virtual networking, and ask questions and even set up some mutual collaboration options.
Much has been said about generalities, but the fact that digital nomads must keep learning is often forgotten, so let’s take a look at this aspect for a sec.
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Learn About the Cultures You May Experience and More
First of all, whether you’re planning to keep traveling or relocate first and then start traveling, you should keep in mind that some traditions may prove to be a real cultural shock.
For digital nomads, cross-cultural learning is absolutely essential, especially if they’re planning to rely on projects and gigs that bring together people from all corners of the world.
Fully Understand Your Taxes
Taxes change when you’re working and traveling. You can take a tax course or study up online to make sure you’re prepared for various exemptions, such as foreign housing exclusions.
In addition, there are other benefits you may find suitable in this matter. Among them are the Streamlined Filing Procedures (SFP) which are a sort of an alternative to the IRS programs. The SFP helps expats and digital nomads keep track of the missed taxes.
To qualify for the SFP you should be able to:
- Demonstrate that the reason for not filing taxes in the past was because you didn’t know you were required to
- Have lived outside the U.S. for at least 330 full days during one or more of the three most recent tax years
- Not have had an abode in the U.S. for one or more of the three most recent tax years
- Produce a signed statement (Form 14653) certifying all of the above
Next on, you should make sure you’re doing all you can to prevent double taxation. Even though all Americans are required to pay state taxes, they can prevent being taxed on foreign-earned income.
There are 3 different methods to choose from, as follows:
The Foreign Tax Credit (FTC)
The Foreign Tax Credit (FTC) helps expats claim a dollar-for-dollar credit on foreign income taxes. To qualify, the expat should obtain a foreign tax liability.
The Foreign Earned Income Exclusion (FEIE)
The Foreign Earned Income Exclusion (FEIE) is applicable to expats who can pass either the Bona Fide Residency test or the Physical Presence Test.
Tax Treaties
The U.S. has tax treaties with 70 countries set in place. If you’re planning to establish your own business, look up the countries that have a tax treaty with the U.S.
Consider Starting an Online Business
Starting an online business can be a perfect opportunity for digital nomads as it will allow them to travel as much as they want without having to rely on gig work.
Further out, if you choose to register a business in a country with a beneficial taxation system, you may save yourself a lot of woes in the long run.
It’s actually simple to start an online business once you have familiarized yourself with the local requirements, so make sure to check out all options.
For many digital nomads, a sole proprietorship is a good starting point because it doesn’t require a large starting capital to begin with, but different people may prefer other options, so do proper research to see which scenario suits your particular situation best.
Keep in mind, however, that many countries consider entrepreneurs to be investors, which is to say that there are often additional benefits available.
Brush Up on Your Soft Skills
Some soft skills are absolutely necessary for a digital nomad, particularly because they will be meeting people from different cultures and likely work with them as well.
Whereas hard skills are usually considered to be more important, this type of knowledge is usually obtained in traditional educational institutions such as a university or a college.
Hard skills are, for many people, the starting point and there’s no denying they are important, especially if your role is highly specific. As a rule, they are usually obtained in traditional educational institutions (university, college, etc.).
Soft skills, on the other hand, need to be mastered and polished and the success of their adoption depends largely on each personality. Common soft skills digital nomads need include communication, organization, self-motivation and flexibility.
Key Takeaways
Digital nomadism may be all the rage, but in order for a digital nomad to be successful, there are a couple of things they need to keep in mind.
For starters, continual learning is an absolute prerequisite as cultures and laws may vary greatly from country to country.
The most important thing is to always research all options and be ready to learn any necessary skills. Only in this way will you be able to enjoy this thrilling lifestyle and avoid unnecessary stress.
