Digital Nomad
Digital Nomads & IRS: What the OBBB Means for Your Remote Income
If you're earning income remotely while traveling or living abroad, the One Big Beautiful Bill impacts thresholds, reporting, and deductions—know them to protect your global income.
By NomadicTax Research Team • 5-8 min read • November 17, 2025
## The Remote Income Landscape Post-OBBB
For digital nomads—freelancers, consultants, remote employees—earning income across borders or through platforms, the OBBB changes several US tax parameters:
- Inflation-adjusted standard deductions and tax brackets—they apply whether you live in San Francisco or Chiang Mai. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- Form 1099-K threshold changes—for gig work, marketplaces, or platform income. The threshold reverts to $20,000 and NEW reporting rules may apply under OBBB. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- Reporting on overseas remittances: Starting January 1, 2026, certain transfers or remittance providers face a **1% excise tax**. For those sending money cross-borders—friends, family, or business—this adds a layer of cost or compliance. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Practical Tax Planning Tips for Nomads
- **Foreign earned income exclusion (FEIE) and foreign tax credits**: These still apply. Use them to offset US tax liability on income taxed abroad—but OBBB changes don’t remove these tools. Keep them central to your planning.
- **Track platform income closely**: If you work via online platforms like Upwork, Etsy, DoorDash, etc., monitor 1099-K threshold triggers. The sliding thresholds may cause previously non-reportable income to require disclosure. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Plan remittances carefully**: If you send money from the US to foreign recipients, assess whether the excise tax applies; consider timing, amount, and provider. Starting in 2026, excise taxes may kick in. Budget for it. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Keep excellent records**: Overseas work means more complexity: foreign address, foreign banks, passports, proof of travel. Retain documents for days abroad, residency, foreign taxes paid—for credits and audits.
## Example: South America Freelancer
Maria is a US citizen freelancer living in Colombia for 300 days in 2025. She earns $80,000 via client zoom calls. Under OBBB:
- She claims the **FEIE** on $120,000 (2025 limit) of foreign earned income, reducing taxable US income. Her standard deduction for single filer increases in 2026 to $16,100. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- Mid-2025, she uses Fiverr; payments flow through platforms. If uses 1099-K, the threshold reverts to $20,000, she risks reporting earlier. Adjust invoices or split clients if needed. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- She occasionally wires money back to family: after Jan 1, 2026, remittance tax of 1% may apply. She plans transfers before that date where possible. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Compliance Essentials
- Stay aware of **deadlines** for FEIE claiming: June 15 for overseas filers, or use extensions with Form 2555 or 1116.
- Use reliable bookkeeping software with multi-currency and backup features.
- Consult US-based cross-border tax specialists; local tax treaties may affect your withholding and overall US obligation.
**Bottom Line:** OBBB doesn’t end benefits for nomads, but it introduces new reporting twists and taxes. With intentional planning—timing, recordkeeping, leverage of existing exclusions—you can manage your tax exposure and stay compliant.