This seems like a sure win scenario, what am I missing? According to my research, if you move to Puerto Rico (really stay there for >6mth), you pay no federal tax and a flat 4% PR income tax. That's massive tax savings.
Hopefully I'm not too optimistic, but with a remote tech job that pays $300k-500k/yr, my effective tax rate is almost 30%, and I live in a no state-income tax area. By removing federal taxes, there will still be FICA and 4% PR income tax, but effective tax rate should go down below 10%. That's easily about $60k-100k of savings on federal tax!
I read that prices are higher on PR because everything needs to be imported, but this could be cancelled out by the lower cost-of-living. Even if it's not, assuming I only save half of the tax savings, that leaves me $30k-50k to spend per year to compensate for these PR-unique challenges. And my annual expenses are usually under $50k, which would double my spendable income, while saving more money!
Non-financial reasons aside, which is mostly the requirement to uproot oneself and move to PR, why is this not a killer tax move that more people are using if they have remote jobs and plan to remain remote forever (assuming the industry will continue to support this type of work arrangement)?
Hopefully I'm not too optimistic, but with a remote tech job that pays $300k-500k/yr, my effective tax rate is almost 30%, and I live in a no state-income tax area. By removing federal taxes, there will still be FICA and 4% PR income tax, but effective tax rate should go down below 10%. That's easily about $60k-100k of savings on federal tax!
I read that prices are higher on PR because everything needs to be imported, but this could be cancelled out by the lower cost-of-living. Even if it's not, assuming I only save half of the tax savings, that leaves me $30k-50k to spend per year to compensate for these PR-unique challenges. And my annual expenses are usually under $50k, which would double my spendable income, while saving more money!
Non-financial reasons aside, which is mostly the requirement to uproot oneself and move to PR, why is this not a killer tax move that more people are using if they have remote jobs and plan to remain remote forever (assuming the industry will continue to support this type of work arrangement)?
Statistics: Posted by gwu11 — Mon Feb 19, 2024 11:09 pm — Replies 6 — Views 553