The life of digital nomads look so glamorous.
Armed with nothing more than your MacBook and hiking gear, you trot to the top of a mountain and start working away the moment you reach the summit.
But ‘freelancing on the road’ isn’t always as fun as it looks on Instagram.
To keep your location independent lifestyle from becoming an accounting nightmare, check out the top three accounting-related tips for digital nomads.
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1. Before you set off on your globetrotting adventure, check with the IRS about the tax implications.
Even if you consider yourself homeless, working from the road in the US and abroad doesn’t mean you don’t have to file taxes. Filing taxes can become a logistical nightmare.
In the US, every citizen must declare a home state and file both federal and state taxes for that state (unless there are none). While the IRS is pretty clear about having a home state, problems arise when you try to decide which state to call home, because they all have different regulations.
If you’re working solo or freelancing in NYC, you’ll find them to be one of the strictest when it comes to enforcing residency requirements.
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Do yourself a favor and consult with a tax professional BEFORE hitting the road.
2. Use your cell phone to keep track of all your freelance-related expenses, but keep all your paper receipts.
I don’t know what I’d do without the apps on my cell phone. I’ve been able to easily track my growing business expenses on the go by snapping a copy of the receipt and letting my favorite accounting software do all the work. But when you’re meditating in an Indian ashram or navigating a Vietnamese jungle, you may not always have cell phone service or internet access.
That’s why it’s crucial to keep hard copies of all your freelancing-related expense receipts and invoices in a safe place just in case.
3. Contact your bank and credit card companies before leaving to be sure you’ll have access to cash on the road.
About 10 years ago I took a trip to Sarajevo and flew over to Rome for the weekend. My Bosnia trip was planned months in advance so I didn’t have any problem using my bank account or credit cards there.
But a couple hours after landing in Rome my credit card AND my bank card stopped working. Luckily, my credit card company called me and said they placed a block on my account because they thought it had been stolen. I was able to quickly clear up the situation and eat for the next two days without issue.
In developing countries, you’re more likely to be carrying cash but you still want to have access to backup funds for emergencies. Using an ATM in Sarajevo was a nightmare. Because the country was still rebuilding after the war, all the banks were Turkish and I paid through the nose in fees.
Wrapping It Up
If you love meeting new people and experiencing all the world has to offer, the digital nomad life may be for you.
I don’t get to travel as much as I used to, but with all the advances in technology it really is possible to work from a mountaintop!
Have you taken the plunge yet? How has your experience been so far? I’d love to hear about it in the comments!