A 2025 guide to how U.S. citizens legally reduce or avoid taxes while living abroad as digital nomads How Digital Nomads Are Avoiding U.S. Tax Without Renouncing Citizenship (2025) Many Americans dream of freedom — not just physical, but financial. In 2025, a growing number of digital nomads are legally avoiding U.S. taxes without renouncing their citizenship. How? Through a smart combination of tax codes, residency planning, and offshore structures. 1. The 330-Day Rule: Your First Line of Defense If you spend 330 full days outside the U.S. within a 12-month period, you may qualify for the Foreign Earned Income Exclusion (FEIE) . This allows you to exclude up to $120,000 (indexed) in foreign income from U.S. taxes — and that applies per person, meaning couples can double it. 2. Establishing a Bona Fide Residence Abroad Rather than hopping countries, some digital nomads set up full-time residency in places like Portugal, Georgia, or Panama. By doing so, they qualify for “bona f...