I would beg to differ on the saving money on taxes. I live in France, I have the $96,000 foreign exclusion, so the first $96,000 I make is US-tax free. I have to pay taxes everything above that no matter where I live.
The following is just for informational and entertainment purposes only.
So, if I were to hypothetically make $200,000 per year, I would pay US taxes on roughly $104,000 per year, instead of $200,000, plus I get to take deductions. So If I have $20,000 in deductions, I pay taxes on $84,000.
When I file my French taxes, my income justification is based on my Adjusted Gross Income on my US tax return since I don't make any money from French-EU companies. If I make $200K, have $96K excluded because of the foreign income exclusion, then $20K deductions, my AGI is roughly $84,000. So the $84,000 is my income in terms of France. Now, I get to then take whatever French deductions we are eligible for and pay taxes on whatever the reminder happens to be. Let's say that remainder is $80K. I now pay French tax on that $80K, which would be taxed at an effective rate of 22% (the French system is similar to the US in that each "band" of income it taxed at a higher rate with the top marginal rate being 45%.) So that's roughly $17K in taxes, which are then dollar-for-dollar deductible from US taxes owed. (That dollar for dollar deduction is based on the US-France tax treaty, so that might not apply to other places.)
Let's say the approximate effective tax rate of $84K is roughly 22%. That means I'd owe $17K to the US, but I paid $17K to France, so I pay zero US taxes under this scenario and overall I paid $17K in taxes on $200K in income, which works out to an 8.5% tax rate. This of course would not apply if you earned income from within Europe.
If you want to live in the Bahamas and you have an adjusted gross income of $96K or less per year, you'll pay zero total taxes. Same for Bahrain, Brunei, Kuwait, British Virgin Islands. But you also have countries that don't tax your worldwide income, only income earned within that country. So if you're clever and do your research, you will absolutely save money on taxes living outside the United States. You also get the bonus of not paying any state income taxes either. Given the EUR/USD weakness at the moment, there really hasn't been a better time to live in the EU if you're making US dollars. However, the tax regimes of each country are often very different, so do your homework.
The following is just for informational and entertainment purposes only.
So, if I were to hypothetically make $200,000 per year, I would pay US taxes on roughly $104,000 per year, instead of $200,000, plus I get to take deductions. So If I have $20,000 in deductions, I pay taxes on $84,000.
When I file my French taxes, my income justification is based on my Adjusted Gross Income on my US tax return since I don't make any money from French-EU companies. If I make $200K, have $96K excluded because of the foreign income exclusion, then $20K deductions, my AGI is roughly $84,000. So the $84,000 is my income in terms of France. Now, I get to then take whatever French deductions we are eligible for and pay taxes on whatever the reminder happens to be. Let's say that remainder is $80K. I now pay French tax on that $80K, which would be taxed at an effective rate of 22% (the French system is similar to the US in that each "band" of income it taxed at a higher rate with the top marginal rate being 45%.) So that's roughly $17K in taxes, which are then dollar-for-dollar deductible from US taxes owed. (That dollar for dollar deduction is based on the US-France tax treaty, so that might not apply to other places.)
Let's say the approximate effective tax rate of $84K is roughly 22%. That means I'd owe $17K to the US, but I paid $17K to France, so I pay zero US taxes under this scenario and overall I paid $17K in taxes on $200K in income, which works out to an 8.5% tax rate. This of course would not apply if you earned income from within Europe.
If you want to live in the Bahamas and you have an adjusted gross income of $96K or less per year, you'll pay zero total taxes. Same for Bahrain, Brunei, Kuwait, British Virgin Islands. But you also have countries that don't tax your worldwide income, only income earned within that country. So if you're clever and do your research, you will absolutely save money on taxes living outside the United States. You also get the bonus of not paying any state income taxes either. Given the EUR/USD weakness at the moment, there really hasn't been a better time to live in the EU if you're making US dollars. However, the tax regimes of each country are often very different, so do your homework.