Expats Are Keeping $126,500 Tax-Free in 2024 – Why Aren’t You?
Talk to an accountant at Breadcounter today.
So you did it. You packed your bags, left the U.S., and now you’re living like a king in Mexico, Bali, Thailand—wherever rent is cheap, beer is cold, and the IRS feels like a distant memory.
Bad news: The IRS doesn’t forget about you.
It doesn’t matter if you haven’t stepped foot in the U.S. in years. If you hold that little blue passport, Uncle Sam still wants his cut.
Most expats don’t realize this until they get a love letter from the IRS, politely informing them they owe five figures in back taxes. The panic sets in. The Googling begins. And that’s when they stumble across a little-known loophole that lets them keep up to $126,500 tax-free, legally.
Yeah, you read that right. If you qualify, you can wipe out six figures of taxable income—and if you’re married, that doubles to $253,000. No federal income tax. No state income tax (if you play it smart). Just your money, in your pocket.
Most people have no clue this exists. The ones who do? They’re saving tens of thousands while you’re still handing Uncle Sam his cut like a good little taxpayer.
Welcome to the Foreign Earned Income Exclusion (FEIE)
The FEIE: How the IRS Accidentally Screwed Itself
The FEIE is one of the biggest legal tax breaks in existence, and the IRS probably regrets ever allowing it. It was meant for government workers and corporate expats living overseas, but digital nomads, remote workers, and internet entrepreneurs have figured out how to game the system—legally.
Here’s the deal: If you qualify for the FEIE, you can exclude up to $126,500 of your income from U.S. taxes in 2024. Do it right, and you’ll owe the IRS zero dollars on that money. Screw it up, and you’ll owe everything, plus interest, plus penalties, plus the soul-crushing headache of dealing with an IRS audit from abroad.
So how do you qualify?
Step 1: Prove You’re Not a U.S. Resident (Even If You Still Have a U.S. Passport)
The IRS gives you two ways to prove you actually live abroad:
The Physical Presence Test – Spend at least 330 full days outside the U.S. in a rolling 12-month period. Step one: GTFO. Step two: Stay out.
The Bona Fide Residence Test – Show that you have real ties to another country (like a residency visa, local bank account, lease, or even a gym membership).
If you pass either one, you get to play in the FEIE sandbox. Miss it by even one day? The IRS will disqualify your entire exclusion. That means if you were counting on $0 in taxes but accidentally spent 36 days in Miami? Boom—back to full tax liability.
Step 2: Make Sure Your Money Counts
Not all income qualifies for the FEIE. This is where people mess up.
✅ Earned income? Good. Freelancers, consultants, online coaches, remote workers, and business owners all qualify.
❌ Investment income? Nope. Dividends, crypto gains, rental income—none of it counts for the FEIE. There are other loopholes for this.
❌ Passive income? Nope. Affiliate revenue, royalties, interest—also not covered. There are other loopholes for this.
If your money is coming from active work, you’re good. Otherwise, don’t try to pull a fast one.
Step 3: Structure It Right, or You’ll Still Owe 15.3%
Most people celebrating their $126,500 tax-free win don’t realize they’re still on the hook for self-employment tax(15.3%).
That’s where the IRS gets people. They let you exclude your income from federal taxes but still expect you to cough up self-employment tax like a good little worker bee.
Unless you set up your business correctly.
How the Smartest Expats Pay (Almost) Nothing
Most nomads think they’re playing the tax game right… until they get wrecked.
They use the wrong entity setup, so they still owe self-employment tax.
They don’t realize that a single day too many in the U.S. can cost them everything.
If you don’t want to learn the hard way, you need a tax strategist who actually understands expats and digital entrepreneurs.
At Breadcounter, we specialize in turning WiFi money into WiFi wealth—which means making sure you’re paying as little tax as legally possible without giving the IRS a reason to come knocking.
We help:
✅ Digital nomads legally structure their income to maximize the FEIE and eliminate self-employment tax.
✅ Freelancers and consultants keep more of their money while staying 100% IRS-compliant.
✅ Remote workers navigate the tax nightmare of working for a U.S. company from abroad.
This isn’t some DIY Google-and-hope-you-get-it-right tax strategy. If you mess this up, the IRS will come back for every dollar they think you owe.
Book a Call Before the IRS Notices You
If you’re an American making money abroad, you need to handle your taxes before they handle you.
We don’t do cookie-cutter tax prep. We build strategies that actually work.
On our free strategy call, we’ll:
✅ Review your tax situation to see if you qualify for the FEIE (or if you’re about to screw it up).
✅ Find every legal tax loophole available to you.
✅ Give you a clear, step-by-step plan to keep your money out of the IRS’s hands.
The IRS isn’t stupid. They know more expats than ever are using the FEIE. The question is: Are you doing it right, or are you setting yourself up to get crushed later?
Click the link below to book a call now before you make a mistake that costs you thousands.
https://calendly.com/breadcounter/initial-consultation
Smart ones cash in. Dumb ones pay up. If you missed this, we can fix your last three years. Book a call now.
Your move.