How a Digital Nomad Untangled Two Years of Multi-Country Taxes
Sam's List Editorial | 2026-07-14
How a Digital Nomad Untangled Two Years of Multi-Country Taxes The message that starts most of these stories is some version of the same thing: "I think I'm two years behind on my taxes, and I have no idea where to even start." The following is an illustrative case study. It is a representative composite of situations digital nomads commonly face, not a single identified client, and the numbers are examples. Outcomes like these are not typical and are never reliable. It is shared to show how a messy multi-country tax situation gets untangled, and what other remote workers can copy before they end up in the same place. The Situation: Freedom First, Filing Later Call him a US citizen running a one-person consulting business from wherever the wifi was good. Over two years he lived in Portugal, then Thailand, then split time in Mexico, invoicing US clients the whole way. He assumed that because he was out of the country, US taxes did not really apply. That is the single most expensive myth in the nomad world. US citizens owe US tax on worldwide income no matter where they sleep, and two unfiled years had quietly turned into a compliance problem with penalties attached. He did what a lot of people do. He ignored it until a client asked for a W-9 and the reality of being unfiled sank in. The Diagnosis: The Right Tools, Never Used When he brought the situation to Solopreneur Tax , a firm that works specifically with solopreneurs, digital nomads, and SMB owners, the first step was not filing. It was figuring out what he actually owed, which turned out to be far less than he feared. The core issue was that he qualified for tools he had never used. The Foreign Earned Income Exclusion under IRC Section 911 can exclude a significant amount of foreign-earned income for those who meet the physical presence or bona fide residence test. Where the exclusion did not cover him, the Foreign Tax Credit could offset US tax with tax paid abroad. He had been eligible for meaningful relief the entire time and had claimed none of it. There was also a state problem he did not see coming. He had never formally established that he left his high-tax home state, so on paper that state still considered him a resident who owed state tax. Exiting a state's residency is a deliberate act, not a side effect of buying a plane ticket. The Cleanup: Reconstruct, Then File in Order The work happened in a specific sequence, because order matters when you are behind. First, reconstruct the records. Bank statements, invoices, and payment processor exports were pulled together to establish actual...
