Avoid Paying Taxes Legally By Relocating With A Virtual Mailbox And Become A Digital Nomad Today
You may have heard of people talking about "avoid paying taxes legally, the power of a home-based business."
As a digital nomad, it is necessary that you have a virtual digital mailbox if you want to Avoid Paying Taxes Legally.
What is a virtual mailbox? A virtual mailbox is a service where mail will arrive and the business will scan the mail and send it to you in an email pdf format.
But first, let's talk about income tax because before you want to find ways to avoid paying taxes legally, you should really think about relocating to a state the doesn't charge you income tax.
What sense does it make to spend all your time outside the USA and still pay high-income tax in a state like California or New York when you could easily relocate to a state that doesn't charge income tax like Wyoming or Florida, for example?
Do virtual mailboxes work to avoid paying taxes legally? In this video, I'm going to explore how to avoid taxes by getting a virtual mailbox address and relocating to an income tax-free state before you start traveling abroad full-time.
Avoid Paying State Income Tax By Relocating With A Virtual Mailbox
You want to make sure your digital mailbox is based in a state that does not have any state income tax. You just have to understand first of all what it takes to become a citizen of a state, which is basically just getting a driver’s license and registering to vote in that state. When we went to Washington to get a driver’s license, we were not asked if our virtual mailbox address was a physical residence. They only asked why it had such a long unit number. I just said that it is a tall building. That worked out fine. It's ok to be physically located in Washington for this to work, as they don't charge income tax for residents, but for businesses its another story. When you register your business in Washington, you'll find out that that they have a franchise tax of 1% on the gross income of your business. So what I did instead was I formed my business in Wyoming, which doesn't have any franchise tax on businesses.
Where Should You Base Your LLC?
It is ideal not to base your LLC out of Washington. I can recommend basing your LLC in Wyoming because they don't have a franchise tax. You have also other options like Texas, Florida, South Dakota, and Nevada which don't charge franchise taxes on businesses and don't have a personal income tax.
Moreover, in Wyoming, it is not easy to establish a residence there because you actually have to go there. They would require documents to prove residency but from what I heard, the easiest state to establish residence in is South Dakota. You just have to rent a hotel room for the night and then go to the DMV, give them that invoice and they will give you residence there. It's an old RV'ers trick.
Still, it is best if you are going to base your residence and business in one state. If you need more information about the state of your choice, you have to contact your local CPA, lawyer or just research it online.
My Recommended Virtual Mailbox Service for Becoming A Digital Nomad
You need to set up a virtual mailbox when you are thinking about becoming a digital nomad. If you just want to work from home, you can go to the UPS store and get a mailbox, they will be the ones who will receive your packages and mail.
I recommend Traveling Mailbox because they scan and process your mail for you, shred it for you, and can even forward it to anywhere in the world you need it sent to.
It's very affordable. It is only $15 a month to get started. It includes 40 incoming envelopes per month, 35-page scans, free mail shredding, and 3 mailbox recipients. You can upgrade if you are getting a lot of mail.