Digital Nomads and US Tax Forms: What You Need to Know

The digital nomad lifestyle creates unique tax situations, especially when US companies and US LLCs are involved. Here's how to navigate it.

Scenario 1: Foreign freelancer with US clients

You're a non-US citizen, living abroad, freelancing for US companies.

Forms needed:

• •W-8BEN (provide to each US client)
• •Possibly Form 1040-NR (if you spent time working in the US)

Tax exposure: Generally none if you perform all work outside the US and claim treaty benefits on W-8BEN.

Scenario 2: Foreign founder with a US LLC

You're a non-US citizen who owns a US LLC.

Forms needed:

• •Form SS-4 (EIN application)
• •FinCEN BOI (beneficial ownership)
• •Form 1120 + Form 5472 (annual, if foreign-owned)
• •Form 1040-NR (if you have US-source income personally)

Tax exposure: The LLC has US tax obligations regardless of where you physically are.

Scenario 3: US citizen working abroad

You're a US citizen living as a digital nomad.

Forms needed:

• •Form 1040 (you file on worldwide income as a US citizen, always)
• •FBAR (if foreign accounts exceed $10,000)
• •Form 8938 (if foreign assets exceed reporting thresholds)
• •Possibly Form 2555 (Foreign Earned Income Exclusion)

Tax exposure: US citizens are taxed on worldwide income regardless of where they live. The Foreign Earned Income Exclusion ($126,500 for 2024) can help.

The US presence trap

If you're a non-US person visiting the US for business:

• •Days spent in the US count toward the Substantial Presence Test
• •Income earned while physically in the US may be taxable
• •If you exceed the Substantial Presence Test thresholds, you become a US tax resident

Practical rules

• •Track your days. Keep a log of every day spent in the US.

• •Know your treaty. Many treaties exempt short-term business visitors.

• •Separate US and non-US income. If you spend some time in the US, you may need to allocate income.

• •File on time. Moving around doesn't change your filing deadlines.

• •Get professional help. Multi-country tax situations are complex. A CPA with international experience is worth the investment.

For UFF users

UFF helps you prepare the US forms in this equation. Whether you need Form 1120 for your LLC, W-8BEN for your freelance work, or Form 1040-NR for your personal filing, the guided form filling makes it straightforward.