As a digital nomad, qualifying for the FEIE is great, but that only covers your federal taxes. While some states do have their own exemption provision, a good number of high income tax states don't provide any relief from taxes for those of us who travel full time (ahem, California).
What's a nomad to do?
There are nine states that have no income tax at all, which is the ideal situation for someone who never spends time in the states and is looking to optimize taxes. The nine zero income tax states are Alaska, Florida, Nevada, New hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you have a friend or family member in any of these states that is willing to let you use their address, that's a great option. If piggybacking off a current resident isn't an option for you, you'll need to establish your own address.
Keep in mind that it's super important to cut ties with your old residency state. The big 6 are:
1. Surrendering you old driver's licence and getting a driver's license in your new state
2. Registering to vote in your new state
3. Changing all vehicle registrations to your new state
4. Deregistering from any state run insurance programs
5. Establishing doctors and dentists in your new state
6. Changing your address with your employer (and everyone else)
Previously, moving your banks to your new state was also important, but with online banking these days, it's not exactly necessary, unless you're at a state run credit union.
If you have any other questions after reading this blog, please feel free to reach out and schedule an appointment.