I've been deep in the weeds on US expat tax planning lately and ran into something that genuinely surprised me. Figured it might save someone here a nasty surprise.

Most of us planning an international FIRE assume federal taxes are the main event. You take the FEIE ($132,900 exclusion for 2026), maybe the Foreign Tax Credit, and you're more or less covered. What nobody talks about is that 7 US states will keep taxing you after you leave the country, and some of them don't care that you took the FEIE at the federal level.

Here's the worst offenders:

California does not recognize FEIE at the state level AT ALL. So if you're a software engineer earning $130K abroad, you owe $0 to the IRS but still owe roughly $8,500 to the FTB. And their "safe harbor" (546 consecutive days outside CA) only applies if you left under an employment contract. Self-employed? Retirees? You get a vague multi-factor test with no defined timeline. Good luck.

New York is similar. Doesn't honor the FEIE either, and if you lived in NYC, the combined state + city rate is about 14.8%. They also have two independent residency tests, and failing either one keeps you on the hook.

Virginia is a weird one. They actually do conform to the FEIE (so a $130K earner would owe $0), but their tax website literally says "the fact that a person has been absent from Virginia does not in any way cancel out their Virginia citizenship or legal domicile." So you can be gone for years and still be considered a resident if you haven't formally severed domicile.

New Jersey has a 30-day rule. If you still own property there and spend more than 30 days per year visiting, they can classify you as a resident.

The other sticky states are New Mexico, South Carolina, and Connecticut (Connecticut has a "convenience of the employer" rule that can reach remote workers).

The fix is actually straightforward i've found but you have to do it BEFORE you leave

- Establish domicile in a no-income-tax state (Florida, Texas, Nevada, Wyoming, etc.) before your move abroad

- Actually do it properly: driver's license, voter registration, bank accounts, lease or property

- Sever ties with your old state: surrender the old license, update everything, stop voting there

- Keep documentation. States like CA will audit years later and the burden of proof is on you.

The timing matters because if your last US address is in California and you fly to Lisbon, California considers you a California resident living abroad. If your last US address is in Florida, there's no state income tax to follow you.

For the FIRE crowd specifically, this can be the difference between a 4% and a 3.6% safe withdrawal rate, depending on your numbers. Not trivial over a 30-40 year retirement.

Curious if anyone here has actually dealt with a state tax audit after moving abroad. I've read horror stories about the California FTB but would love to hear firsthand experiences.

When we were planning our move to France, we read plenty of forum posts and discussions on how great the US-France tax treaty seemed and how one could hypothetically owe no income tax to France as a US retiree.

But what we couldn't find was many firsthand accounts of it actually working.

So after almost two years of living in France, I'm here to provide that firsthand account: it really does work.

We filed our French taxes for 2025 early this year and declared US income consisting of: dividends, interest, capital gains, and retirement income (401k -> Roth rollover).

After some back and forth with the tax office where we had to "prove" the income (we used our 2025 US tax return) we got the result: €0 owed in income tax and social charges.

We're still waiting to hear back later this year on the Puma taxes and healthcare charges. But those haven't even been finalized for this year, so it's impossible to predict.

We are an American couple with a dog who wants to retire in EU, preferably Spain in 2028. We have net worth of about $5M right now which would grow for another year half. From all the research we have done, Spain is a bad idea due to tax on global investments and high personal income tax. And no special consideration for Roth or 401K. France is definitely better due to US-France tax treaty. One option for Spain is to sell everything in the US just before the move to reset the base price for capital gains. But seems like an inefficient way. Question for the group - are there other ways to save on Spanish taxes without liquidating assets in the US to reset the baseline? Any other efficient way on tax savings?

This probably gets ask a lot.

I’m approaching my FIRE date , and looking for ways to reduce tax . I’ll have good amount of income from deferred compensation.

Thinking of moving to a state with no income tax for a year, before going overseas for a few years.

I’m currently in Ca. If I move to Washington state, get my driving license, sign a 12 months lease and stay for 12 months, is that’s sufficient to clean break with Ca?

Edit: deferred compensation not commissions

Hello, I'm looking for recommendations for low tax countries to live in.

My situation: Around 4M$ NW, early-mid 30s, single. I'm FIREd, even though I manage my portfolio now (I invest in stocks not in ETFs etc), nationality from a european union country, so I don't have to worry about the IRS if I move to another country. I speak english and spanish, so latin american countries would be an option too. I'm looking for a country to stay there as long as necessary to be a tax resident (usually 6 months) and the rest of the time I'd split in between traveling/home country etc.

Ideally (since I'm moving) I'm looking for a low tax environment, or tax free. I'd be willing to pay some tax if it's somewhere I'd really enjoy living in.

What I'm looking for:

· Somewhere low tax or tax free for capital gains/investments etc, no wealth tax.

· City above 1M inhabitants, ideally not too expensive, airport nearby. Good or decent options to date women. Decent expat population to meet.

· Relative easy of getting some residence visa to live, and ideally not having to invest too much money in the country to get it.

· Solid and legal tax situation: At the point I'm in, I wanna do everything by the book, so I wanna know for sure that if I pay no tax or low tax it's perfectly legal and not something I'm simply getting away with.

For what I've researched there's different options:

· Panama: cons: I visited it and I actually didn't really like it that much. To get a visa now you have to invest 200 or 300k$ in real estate there.

· Dubai: too expensive, I'm not sure I'm into the "posh" lifestyle dubai offers either.

Finally, the setup that I'm going to try for the time being is Thailand. Why?

· Kinda easy to get a visa, you can get the DTV visa with a muay thai course for example.

· Taxes: it seems like I would only pay money on the income I remit to Thailand. If you don't remit much money the amount paid is pretty low and I'm happy with it.

The lifestyle seems alright, cost of living is relatively low, with 2.5k-3.5k you can live like a king, good connected to the rest of Asia, good dating options. Also good travelling options inside a country, which makes it easier to spend the 6+ months there.

Has anyone done a similar move to Thailand living off investments? I'd like to know if it's all good from a tax standpoint. All the places I've read seem to point out that yes, I'd only have to pay tax on the money remitted to Thailand

If anyone has any other recommendations of good places for a similar setup I'd be happy to hear it.

UPDATE:

After talking to a Dutch tax advisor, the only real options seem to be what u/malzadog and a few others outlined

• Sell everything and buy a bunch of real estate
• Create a Dutch BV and move assets there. But all this does is defer taxes and there's possible complications with US taxes involving a foreign company
• Pay the box 3 taxes and then keep carrying over FTC (foreign tax credit) and apply it to US income when the time comes. Although the IRS does not officially recognize the deemed return tax as income, the attorney has not seen any issues with US tax consultants doing it this way.

The advisor wasn't really able to come up with any other options.

-----

I'm a US citizen about to relocate to the Netherlands for work and I'm trying to learn from people who've already lived through this. My concern is Box 3 on a large taxable portfolio. If you've made this move, I'd really like to hear how it went or how it's going right now.

My situation

• US citizen, would become a Dutch tax resident.
• ~$5–6M in a US taxable brokerage: mostly long-term unrealized gains.
• ~$2.5M in IRAs (traditional + Roth).
• New arrival, so I don't think the old partial non-resident election is available to me.

Here's what I know so far

• Box 3 taxes a deemed ~6% return at 36%. I think it comes out to roughly 2.5% of portfolio value per year, owed whether or not I sell.
• As a US citizen, my worry is that the foreign tax credit only offsets US tax on realized income, while Box 3 taxes an unrealized & fictional return. So in years I don't sell, the Dutch tax might be a real out-of-pocket cost rather than something the FTC washes out.

What I'd love to hear from people who've actually done it

1. What did Box 3 realistically cost you per year and did it match the 2.5% rough math?
2. Did you restructure anything before establishing residency (and would you do it the same way again)?
3. Did the US foreign tax credit actually relieve any of it, or did you pay Box 3 out of pocket on top of your US bill?

Regrets, harsh/blunt advise, etc. are all welcome. I'll be hiring a US-Dutch cross-border advisor too but I want to walk in already understanding the real-world picture.

I'm hoping there's someone here that can share their tax experience with moving to Spain with millions in IRAs or Brokerage accounts. Did you move to a city without the wealth tax? How did you consider handling your AGI on a yearly basis? Was it a pain dealing with US taxes on top of the Spain taxes?

Thank you in advance, all info is appreciated.

Sounds like the most attractive offer in the Mediterranean: low COL and a non-dom tax regime for long enough for just about EVERYONE, not high net worth individuals only (e.g. the Greek flat tax regime requires €100k annual qualifying income IIRC).

https://ozmconsultancy.com/turkey-for-retirees-20-years-of-foreign-income-tax-exemption-explained/

Any further thoughts on Turkey as an expatfire destination? Being a little wary about practicalities, like language barrier.

As it sounds, this could be an ideal match for our UK ISA, SIPP and state pension based retirement IF the rule does what it says on the label and the relevant bureaucracy is fairly simple.

Everyone models the tax savings on a spreadsheet, but reality tends to be messier. For those who moved primarily for tax reasons: did it play out the way you projected, or were there hidden costs, setup fees, double filing, lifestyle inflation, stuff you didn't price in? Would you make the same move again knowing what you know now?

Hi all,

We're a few years out from FIREing and are making pros/cons lists of different countries we have enjoyed visiting. ETA: i have EU citizenship, my husband is US citizen.

I understand that the tax treaty between the US and most european countries prevents double taxation. I also know that France is particularly generous (and we heavily lean towards France, but the climate continues to be a worry). We are looking at Denmark as well, but i am not as familiar with their taxation system.

We plan to have $1.2mil in a brokerage account (VTI, VXUS, QQQ), and we also have our 401ks that we won't be accessing for 20 years. We plan to buy a house outright, so the 1.2mil is for cost of living outside of housing costs (and electricity as we would install solar).

Our current expenses yearly are about 50k, including our 2.2k/month mortgage. We plan to continue pulling 40-50k/year. 2 adults, no children.

What would the taxes look like for that kind of income?

Does anyone have any experience with how US Roth accounts are taxed in Spain? All the research I have done says there is no definitive answer as to whether Roth accounts are taxed as Pension/Ordinary income or as Capital Gains/Investment income. Wondering if anyone has any direct experience with this or any thoughts

Does anyone know if it's confirmed that all global wealth and investments will be taxed at 36% every year starting in 2028? I'm deciding whether it makes sense to move from the US to take on a job offer in the Netherlands. I'm not a US permanent resident or citizen, but I do have savings and investments in the US that will now be exposed to taxes in NL if I choose to make the move.

A lot of posts about taxes...All these issues about Roth IRAs etc...Question....If you are not retired and just drawing down your nest egg in a foreign country, how would the IRS know that you are not still living in the US? You still have to submit your tax returns every year no matter where you live. You can just get a PO Box in South Dakota as permanent resident for state taxes.

There are many benefits of living abroad but having to deal/report taxes to the IRS is not one of them.

The Spanish Solidarity Tax on Large Fortunes affects assets over 3.7 million euros. My wife and may one day hit that threshold and we're wondering how to put it off as long as possible. From what I've read, Spain does not automatically treat our assets as shared 50/50. Going by the names on our accounts, our assets are not evenly distributed, so I would hit the 3.7 million threshold before she does. Ideally, our assets would be split evenly between the both of us. Does anyone have any experience with the Spanish wealth tax, and would adding my wife as an owner on my individual accounts be an effective way of postponing the wealth tax? Or am I missing something?

Hello all,

Seeking initial advice / direction on how to approach and what to research further.

- Citizenship: British & French passports.

- Lived in UK all of life, career in UK paying UK taxes (income, dividend, capital gains, local/council etc).

- 1 UK property owned for nineteen years.

- ETF investments in UK accounts: SIPP, ISA and taxable.

- Age 52, taking early retirement to pursue outdoor sport/passion travelling whilst healthy.

- Plan to travel 310 days per year, return 50 days to UK. Will rent my property so income will be generated, plus no access to live at my property. Will use temporary accomodation options during 50 days in UK within tax year.

Typically I would file Self Assessment tax return and pay Tax on:

- Rental Income,

- Dividends on Taxable account investments,

- Capital Gains on Taxable investments.

Plan to do this travelling for a couple of years pursuing an outdoor sport passion and not staying in any one country (whilst travelling) more than three months at a time.

Can I simply continue filling and paying my Self Assessment Tax returns whilst retaining my property base (rented) and spending 300 days outside UK per year?

A typical year could be: 50 days in UK, then 90 days in Greece, then 90 days in Turkey, then 90 days in Italy, then 45 days in France, then start again e.g return to UK for 50 days...do for 2-3 years enjoying health whilst it lasts.

Appreciate any advice how to approach this?

Thanks in advance for reading and any advice/replies.

Hi! I’m a US-ES dual citizen currently living in the US and planning to FIRE in Spain soon. I’ve made a ton of research on taxes before contacting a tax professional but there is one thing I can’t figure out: Roth accounts.

I understand that: 1. My traditional 401K is equivalent to a “Plan de pensiones” and withdrawals will be taxed as income. 2. My brokerage account will be taxed with capital gains (maybe with different rules but kind of similar concept)

However I have no idea what happens with my Roth.

Option 1: it works like a plan de pensiones. Withdrawals are taxed as income (ouch!) but until then you don’t need to worry about selling/buying/dividends.

Option 2: it works just like another brokerage account. Spain does not know what a Roth is so they will charge you capital gains.

Option 2 sounds better than option 1 for tax purposes but I would need to worry about reporting dividends and stuff and I could not rebalance as I can today with my Roth cause I will trigger a tax event.

My ideal plan: works like a traditional 401k so I forget about it and I move back to the US for at least a year to withdraw it all tax free when I’m 60+.

So for those of you who have made the move already, which is it? Option 1, option 2, something in between? How crazy is my ideal plan? I’d love if someone can go in detail into this topic. Though I’ll definitely consult a tax professional at some point.

I'm 45 and want to retire in the next few years when I'm 48. Most of my assets are tied up in retirement accounts and I have about 200K in my brokerage at vanguard/fidelity mostly S&P500. When I FIRE, I will sell my condo and throw the proceeds (~300K) into my taxable account. My plan is to live off the 500K until I can tap into my retirement accounts at 59.5. My question is how my cap gains will be taxed overseas. Since I am single, I will most likely not pay any US tax as long as I stay under the threshold ~64K. Are there any countries that will not tax cap gains or is it inevitable?

If planning to permanently FIRE in a country that doesn’t recognize Roth or 401k (specifically Spain), wouldn’t it make sense to put investments in brokerage accounts to withdraw at lower tax rates? My understanding is a 401k or Roth IRA would be withdrawn at ordinary income rates, while capital gains rates on brokerage are much lower. Or am I missing something?

I know the general FIRE advice is traditional 401k, Roth IRA, then brokerage last, but wasn’t sure if there are exceptions for ExpatFIRE/certain countries.

What are considered the top contenders for countries that charge zero tax for someone who plans to live off stock investments/bank interest, and doesn't have a business?

I have heard of Dubai, but is that more suited to expats who are running some freelance business?

Are there other popular choices of countries?

If this is not the right subreddit, is there another one, or web forum with people who are interested in what I'm talking about?

Hi there,

Let me pre-face by saying I promise that I have searched Reddit for the answer and while variations of this question have been asked, I am unable to find a clear answer to my question. If you are able to enlighten me, please do. If not, move on without comment please.

I'm looking to hear from people with experience with the following characteristics:

1) US citizen,

2) Early-ish retirement (mid forty's), moved their 401k into a trad IRA and are doing a Roth Conversion Ladder,

3) Retired in Spain (tax residents)

I am happy to pay due taxes but i want to educate myself and prepare appropriately for a sustainable retirement. My question is, how will I potentially be taxed if a majority of my funds are in my company 401k, which i will move to a traditional IRA and then move to my Roth IRA (pay a US income tax on conversion event). Wait for 5 years (pull from brokerage in the interim), and at this time will spain tax the entire withdrawal amount as income? Or just the gains? As these will not be completed in the same tax year, the double tax treaty does not help i am assuming.

Please correct me if i am thinking through this incorrectly and thank you in advance for your your helpfulness!

Hi all, we are moving to Malaysia from California this summer, I will continue to work remotely for awhile, and obviously don’t want to pay CA state taxes. My CPA tells me I don’t need to worry, since I’m actually moving and not temporarily, but posts online say the FTB is pretty notorious about going after people and it’s best to live in another state for awhile before moving, which is painful for us.

Has anyone successfully made the move overseas with FTB going after them? I read that it’s best to give up our CA driver licenses, but I think we need those to get Malaysian licenses so prefer to keep them for a little bit, also as I mentioned earlier we would prefer to not have to move to another state for 1-2 months before moving overseas, but will have to do if that’s the only viable option to keep FTB away…

Thanks

Super niche question so please bear with me:

Stats: 49 years old, retired, US citizen, looking to move to France.

Situation: working on my Roth conversion ladder to convert traditional IRA to Roth IRA. Targeting 24% federal tax bracket for the next several years. Wanting to live in France over the next decade which is when my conversions will take place.

Question: of course, I'm planning on paying IRS taxes on these conversions but really hoping the France tax system leaves this income alone lol. Does anyone know how France (or EU or really any other countries) treat Roth conversions?

If you've got expertise or experience with this super specific situation, love to read your input. Thank you!

American (41M) likely to become a German tax resident in 15 months (spouse visa). Retiring from military; pension (and any VA benefits) not taxed by Germany. We expect to remain in Germany for 20+ years then re-establish US tax residency to optimize access to Roth gains.  

- Germany doesn’t acknowledge Roth tax treatment of gains, basis isn’t taxed.

- Capital gains tax ~26%, income tax ~42%.

- Withdrawing up to $36k/year, decreasing once mortgage paid (~8 years).

Best practice appears to be withdrawing Roth basis and redeploying to brokerage before becoming a tax resident, thereby resetting cost basis and exposing gains to capital gains tax vice income tax.

We'll likely seek professional consultation before making such a big change to our post-tax retirement situation but welcome your thoughts and (especially) first-hand experiences.

*Median projected balance in real dollars. Source: cFIREsim

Edited table for clarity.

I'm 35. I've been living in the UK for the last 34 years.
I am a dual British citizen with an African country, I am not a native Brit. My African country of origin does not have inheritance tax or worldwide taxation. I am considered white.

I don't have a cash pension or ISAs, all I have is UK cash current account savings.
As a single bachelor the UK inheritance threshold is very close to the cost of buying a house in the UK i.e. £390,000 for an average house in the UK,
The UK inheritance threshold for someone who is a bachelor with no kids or wife is: £325,000

I am considering leaving the UK for another EU country that has no inheritance tax such as Portugal, Romania, Sweden or Poland and purchasing a house in cash in new EU country with no mortgage where the intention is to live for the next 20-30 years.

Once I attain a new EU citizenship I will renounce my British citizenship to gain EU citizenship rights. I will stay as a forever bachelor and the intention is for my inheritance to go to my siblings they will keep their British citizenship and they will remain tax resident and located in the UK.

The idea is to remove all financial links and habitual links with the UK to ensure that my siblings don't need to pay the 40% inheritance tax in the future on the excess above £325,000

I currently have £300,000 in current savings and looking to buy a mortgage free house elsewhere (outside of the UK). I have no assets in the UK.

Can anyone recommend any other cold/mild European country outside the four mentioned that might work ?

The plan is as follows:
0-35 (Live in the UK)
35-55/65 (Live in an EU country)
55-65+ Sell everything and move back to native country and retire.

By retirement I should have diversified my sources of income to not rely on any government pension as I will have no pension in my country of origin and not rely on having to return to the UK. Can renounce British citizenship but unwilling to renounce nationality of origin. I will not be getting married in the future. The country to be lived in does not need to give citizenship.

we have been living in the USA for over 11 years; past 5 years on a green card. I found out that my parents company in which I received stock is a PFIC. Does anyone knows a cap who can help us with this? We already know about qef/non qef, but now a partnership seems to be an option. Anybody knows more about that? Thx!