I'm in NYC currently and make a good living doing remote web development work and I get a 1099 at end of year. My taxes take about 35% of my paycheck.

I was thinking about incorporating in another state or moving to reduce this amount. I've read some states have NO income tax, but I'm unsure, does that mean federal too?

I hear Puerto Rico is another possible U.S. tax haven too. Which state/locale has the best tax rate for a self-employed individual like me?

  • 6
    Is 35% your overall tax rate? I can't imagine you are paying 35% on top of what the feds take. It would be easier to answer if you clarified what you pay in state taxes and what your NYC local taxes are. Your federal taxes are going to be roughly the same no matter where you move.
    – JimmyJames
    Commented Mar 30, 2018 at 14:15
  • 1
    Do you drive everywhere? Shop at Walmart, eat mostly at home or at national chain restaurants, and is your idea of culture a popular first run movie? I ask because some of the things that make NYC expensive also make it worth living in. Commented Apr 24, 2019 at 21:55

11 Answers 11


I do not know if this is something that is relevant, but I have a friend doing the following:

  1. Incorporate a company in Singapore or Luxembourg, where there is limited income tax.

  2. Make your clients pay to the company.

  3. Give yourself a job in your company and relevant amount of shares in the company. Take less money as your salary and more money as dividends.

I do not know the complete legal implications, but taking the money as dividends may reduce the percent tax that you have to pay on your income. A thing to note is that while my friend lives in US, he may not be an American citizen (nor am I). I have heard that Americans have to pay tax on income from outside the country, which may change your case.

This is by no means a legal advice, and I would recommend you talking to a lawyer about this before taking an action.

  • 37
    A resident/citizen of the USA is liable for US federal taxes globally. This "solution" is both illegal and immoral. Commented Mar 30, 2018 at 14:38
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    @GalacticCowboy is it ilegal? There is still tax to pay on the income the company pays you, but you can can choose to pay yourself a more tax efficient salary (i.e. lower), and then pay dividend tax on the divends. a. What is the problem with this? and b. why is it immoral?!
    – will
    Commented Mar 30, 2018 at 15:39
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    @will From a federal perspective, ordinary dividends are still income and are taxed at the same rate as other income. And "immoral": in this scenario you're going out of your way to hide money that is legitimately classified as income. Commented Mar 30, 2018 at 17:09
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    @kavivaidya You're not hiding it at all, you're declaring it, just apportioning it in a more tax efficient manner (as per the law). If they didn't want people to do it, they wouldn't make it possible.
    – will
    Commented Mar 30, 2018 at 17:12
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    @GalacticCowboy I think this is legal though, because you are not hiding any income, but are spreading it in such a way as to reduce the tax. As for morality, I am no one to judge, but personally I feel taxation is theft :). Commented Mar 30, 2018 at 17:25

Whether or not you owe state income tax is determined by state residency rules. Say you work remotely for a company in Texas (no income tax state) but you spend all of your non-liesure time in NY, the office you keep is in NY, you receive your mail in NY, NY wants income tax from you because you are a resident. Now say the company you work for that's based in Texas is actually one you own 100% of called Patoshi, Inc. If you pass all of the income from Patoshi, Inc to yourself either via payroll or dividend(s), you're still a resident of NY, NY still wants that income tax. But now if you get sued you might have to handle the case in TX where your Corporation is "located." So you think, what if I let my company just retain the earnings. Then the Corporation retains its earnings in Texas, and then it's the company's money, not yours. In this situation the earnings never get to you so you don't pay tax on them, the company does. Perfect!

But wait, Texas doesn't have a personal income tax, but it does have a corporate tax. So Texas is out but you can set up in South Dakota where there are neither personal income taxes or corporate income (or gross receipts) taxes. Great! South Dakota has no corporate income tax but Patoshi, Inc will owe federal corporate income taxes on retained earnings. Darn it!

If you ever wanted this money, to buy yourself a house or whatever, you'll have to take receipt and THEN you'll owe the personal income tax on money that's left over after Patoshi, Inc paid federal corporate income tax on it.... :( Corporations are double taxed at the individual level.

Considering what you're really dealing with. Even if federal income tax did not exist. At a tax rate of 5% you'd have to forego $20,000 of income to avoid paying $1,000 of tax to New York. Personally, I'd rather have $19,000 than $0. You're giving up the utility of a lot of your earnings over nothing.

The major benefit of an LLC or S-Corporation or Limited Partnership is the ability to simply take the business income personally thus eliminating double-taxation while still receiving the limited liability benefits. If you're a resident of NY (or whatever state) you'll owe the income tax regardless of where you put your corporation because the money ultimately flows to you. If you think you can beat the residency rules in NY, good luck.

If all a person needed was a PO box in Texas to avoid state income tax, Texas would have a comically booming PO box/mail forward industry and no state would receive any income taxes.

At this point foreign shell corporations really exist to facilitate for global investment and more easily allow for investment funds to raise capital from multiple jurisdictions not strict tax avoidance.

  • 8
    I've made some edits to address that. I hate the term "the 1%," most of "the 1%" takes their money and pays taxes or has legitimate business interests. "the 1%" pays the majority of income taxes in the US.
    – quid
    Commented Mar 29, 2018 at 19:17
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    "If all a person needed was a PO box in Texas to avoid state income tax, Texas would have a comically booming PO box/mail forward industry." Poetry. Commented Mar 29, 2018 at 20:04
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    @Grade'Eh'Bacon They do have a booming PO Box/mail forward industry. They will scan the exterior of your letters and email them as part of the basic package, then they charge extra to open and scan the contents of each letter you're interested in. Just because the average joe isn't aware of it, doesn't mean that tax fraud isn't happening all the time. It also doesn't mean that investigators are unaware of it either. Commented Mar 29, 2018 at 20:08
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    @JonathanReez they won’t necessarily, although you likely pay rent or have a mortgage, are registered to vote, etc etc. Just because they don’t know doesn’t mean it’s not fraud.
    – Tim
    Commented Mar 29, 2018 at 23:14
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    @JonathanReez To quote a tax lawyer in a similar context, they'll know when you file the income tax forms that you are legally required to file on penalty of criminal charges.
    – cpast
    Commented Mar 30, 2018 at 2:17

First let me say, I AM NOT AN ACCOUNTANT! And you should talk to one. They're really great, and they save you a ton of money.

For instance, I'm a mobile app developer based in NYC. I was in a similar situation: whenever I did freelance work, I got a 1099, on which I was taxed like crazy.

My accountant had me incorporate a DE as an S-Corp which I owned completely. I pay myself a reasonable, startup-sized salary, and the rest of the money (when there is some – and there almost always is) I get as profit distribution. As a result, I only pay employment related taxes on my salary, and not on the profit distribution.

This does not, per se, save you from NYC taxes. However, it does reduce your total tax liability – and that includes in NYC.

If you're wondering if this is too good to be true, you're not alone. This recent question asked that very thing. As you can see from the answers to that question, it is a totally reasonable thing to do!

Again – talk to a good accountant. They will be able to tell you the best options for your particular situation, and save you the most money on taxes.

  • Why DE when other states have ZERO income tax? Why not incorporate in those no income tax states? Commented Mar 30, 2018 at 14:12
  • 1
    @Patoshiパトシ ...because my accountant and lawyers said so? I'm not totally sure myself, but I believe it's because the corporate fees are really low and DE has laws that are very attractive to investors (if I wanted any). Commented Mar 30, 2018 at 15:08
  • concur with DE being the right move. There are numerous reasons to select a state of incorporation and you have to consider all in balance. I'm in WY because my reasons are different. Commented Mar 31, 2018 at 17:43
  • Note that (sadly) this has no connection with reducing >state< taxes.
    – Fattie
    Commented Apr 1, 2018 at 15:38
  • @Patoshiパトシ why DE? Because DE has very well-understood incorporation laws. Sounds like a small benefit until you realize that this broad understanding makes everything cheaper and easier - people have created plenty of services to handle setting up and maintaining a DE-incorporated company.
    – Jeutnarg
    Commented Apr 2, 2018 at 15:48

Since the current form of the question asks about moving to another state, yes, that's really probably your best option, provided that state is not something like California or Massachusetts.

States with No State Income Tax

There are several U.S. states that have no state individual income tax on salaries and wages. Currently, those are:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

You will, however, still be required to pay federal individual income taxes in any state. These apply equally to every state.

Cost of Living

However, there's an even better reason for moving to another state to make financial sense, especially for someone who works remotely and, therefore doesn't have to live in a particular place: cost of living.

It turns out that the effective value of a dollar in New York ranks 49 out of the 50 states, with only Hawaii being worse (the District of Columbia is also a bit worse, but, obviously, it is not a state.)

You may already be familiar with the concept of Purchasing Power Parity (PPP), which is used to adjust nominal money figures (such as nominal incomes or GDP) according to the amount of goods and services that amount of money can actually purchase in an area. This is used to allow for more apples-to-apples comparison on figures like incomes and GDP from one place to another. Typically, these are assigned by country with the U.S. being customarily defined as having a conversion factor of 1. However, the U.S. is very large and cost-of-living can vary dramatically within the U.S., too. As a result, the U.S. Bureau of Economic Analysis has begun publishing Regional Price Parity (RPP) information to allow for more accurate comparison between different states or regions within the U.S.

The BEA's Regional Price Parity figures assign a value of 100 for the average over the whole United States. The cost of living in a given region is then the region's RPP value percent of the national average. For example, New York State's value of 115.3 means that the cost of living is around 15.3% above the national average. For the New York City/Newark Metropolitan Statistical Area, the number is 121.9 (i.e. 21.9% higher than the national average.) Now, let's compare how that stacks up vs. the states mentioned earlier:

  • Alaska RPP = 105.6 (13.4% less than NYC)
  • Florida RPP = 99.5 (18.4% less than NYC)
  • Nevada RPP = 98.0 (19.6% less than NYC)
  • New Hampshire RPP = 105.0 (13.9% less than NYC)
  • South Dakota RPP = 88.2 (26.6% less than NYC)
  • Tennessee RPP = 89.9 (26.3% less than NYC)
  • Texas RPP = 96.8 (20.6% less than NYC)
  • Washington RPP = 104.8 (14.0% less than NYC)
  • Wyoming RPP = 96.2 (20.1% less than NYC)

Data Sources:
RPPs by State
RPPs by Metropolitan Statistical Area

So, if you were to move from NYC to, say, Tennessee, in addition to not paying state income taxes, the money you keep would be worth about 35.6% more than that same number of dollars would have been worth in New York, even if you had been allowed to keep that much. This turns out to make the economic benefit of leaving NY much larger than the tax rate difference alone would make it seem.

  • Also, as mentioned by others, some of those states will have corporate taxes. Commented Mar 30, 2018 at 14:32
  • @GalacticCowboy True, that's why I made sure to be clear that it is individual income taxes on wages and salaries that those states do not have. Some of them also have individual income taxes on capital gains above a certain threshold.
    – reirab
    Commented Mar 30, 2018 at 19:31
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    This is the best answer, because a narrow focus on state income taxes ignores other important factors that drive total cost of living. In fact, a remote developer has much wider choices than just income tax free states. I moved from Oregon, to Arizona for two main reasons, taxes and weather, but found that cost of living was even more important. Income and property tax rates in Oregon are more than double Arizona's, but OR has no sales tax while AZ has an 8% tax. A much bigger factor was home costs, the rental component of the RPP is almost 20% higher in Portland than in Phoenix. Commented Mar 30, 2018 at 22:53
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    What's more, in South Dakota, a bunch of expenses will just plain go away -- opera, sushi, taxicabs, Metrocards, weekend junkets to Paris... Commented Mar 31, 2018 at 17:48
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    Note too that the cost of living for remote workers is much better than for most people, in a given state. the averages above include living in the Big City in each state - remote workers instead choose the trendy beautiful small towns.
    – Fattie
    Commented Apr 1, 2018 at 15:51

There are many famous people who enjoy New York City, but do not enjoy the taxes.

Many people commute to the city from Connecticut, New Jersey, or even further away. If you live in another state but commute to the city for work, you will still incur tax liability. If you move away and visit the city only for leisure or occasional work, you can reduce your liability significantly.

Because of the the wording of your question before it was edited, I want to be clear: if you do not wish to move away from New York City, you will still be liable for the state taxes that apply. You're not the first person to realize the tax rates are high and attempt to avoid/evade the taxes. They have many ways of detecting tax fraud if you simply set up a fake address elsewhere. It will likely end badly for you.

  • 1
    Let us continue this discussion in chat. Commented Apr 2, 2018 at 18:34
  • 2
    I'm -1 on this because the answer is out of date, based on an uncharitable reading of the first version of the question, and the answerer refuses to update it.
    – Aaron Hall
    Commented Apr 2, 2018 at 18:38
  • @AaronHall I added further context in the chatroom above, but if you want further proof of OP's intent, just take a glance at the accepted answer. :) Commented Apr 3, 2018 at 21:17

Some states have no STATE income tax. But you still have to pay FEDERAL income tax. New York State income tax rates range from 4% to 8.82% of your income, so eliminating that could make a significant difference to your take-home pay. But sorry, you are still subject to federal income tax if you live in any of the 50 states. States with no income tax often make up for it by having higher sales tax, but the total tax burden in most states is less than New York.

Setting up a corporation in another state wouldn't really help you. You'd still have to pay state income tax on the income that you as an individual receive to the state in which you live, and the corporation would be liable for income tax in both the state in which it is incorporated and any state in which it operates, which in your case means, the state where you live. State tax laws usually let you take a credit for taxes paid to another state, but what that comes down to is that, AT BEST, you pay the higher rate of the two states, and sometimes more.

Actually moving to another state can certainly help you, if you move to a state with lower overall taxes. Which if you're in New York, is any other state: New York has the highest overall tax burden of any state in the country. https://taxfoundation.org/publications/state-local-tax-burden-rankings/

I don't know a lot about the taxes in Puerto Rico. My understanding is that residents of Puerto Rico do not pay federal income tax and the Puerto Rican "commonwealth tax", like a state income tax, is only 4%. But there may be catches to that. Anybody else on here know the answer to that part?

  • If NY is such high taxes. Why don't people setup a company outside of NY to reduce this? Commented Mar 29, 2018 at 18:21
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    Because "setting up a company" does not change one's state of residence for tax purposes. If you don't like NY taxes, then move to another state.
    – Norm
    Commented Mar 29, 2018 at 19:06
  • 3
    @norm Exactly. As long as YOU still live in New York, it doesn't matter where your company is incorporated. Your income is still New York income subject to New York income taxes.
    – Jay
    Commented Mar 29, 2018 at 20:03
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    @Jay: Puerto Rican taxes are much higher than 4%. The Puerto Rican sales tax is 5.5% (plus an optional municipality levy of 1.5%), as of 2006, but the commonwealth income tax is a bracketed system similar to U.S. federal income taxes, but with much faster increase in brackets (though the top bracket is lower). The rates start at 7% for income between $9K and $25K, and rapidly increase to 33% (for all income over $61.5K). Commented Mar 30, 2018 at 1:04
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    And to be clear, you still have to pay federal social security/medicare taxes, all you avoid is federal/state income taxes (which the Puerto Rican taxes replace). So if you're self-employed, you're paying employer and employee parts of social security/medicare (6.2% + 6.2% + 1.45% + 1.45%), then Puerto Rican income tax (33% on all earnings over $61.5K), which would total a tax rate of 48.3% on your last dollar earned (unless you exceed the social security wage base cap, in which case you'd drop to 35.9% on the last dollar). Commented Mar 30, 2018 at 1:07

In the end, the answer to your question is largely opinion-based, because no matter what you do, there are advantages and drawbacks.

I want to start with a data point: California, just like NY, is said to have among the highest taxes in the nation. And you routinely see media reports about a supposed "exodus" of people. Yet California's population is booming, and people in CA (as well as in NY) tend to be wealthier than the rest of the nation. So the higher taxes may end up being balanced by other advantages.

  • Incorporating is usually a good idea, not so much because of taxes but to avoid liability issues.
  • Incorporating is a vast subject on its own. Some forms of incorporating don't even affect your taxes at all, or only minimally. For instance, a single-member LLC (at least in California) can provide you with the liability shield of a corporation, while it is disregarded for tax purposes.
  • If the corporation is not disregarded, it may actually cost you more in taxes because the corporate income is taxed, and then when you take it out, it is taxed again as your personal income.
  • If the corporation does help you save taxes, you will be earning the scorn of many people. Especially larger corporations get a lot of negative press from perfectly legally avoiding taxation.

But the main point of my answer is that, as always in life, you get what you pay for. I live in California, and happily pay the California state tax (which actually is fairly modest compared with my federal tax burden), because it buys me a lot of things. For instance, a state disability insurance. A decent unemployment insurance (for when consulting projects dry up). In-state tuition at some of the best universities in the country for your children.

Another fallacy: don't just look at income taxes. Many states that don't have an income tax make up for it with astronomical property taxes. I believe Texas is among them.

Other states may also have lower income potential for you. Even if you do all your work over the Internet, you may have a harder time landing new clients, and those you can reach may expect to pay lower rates based on where you are.

Also look at other factors. If you have family in New York, you may end up spending on airfare whatever you saved in expenses. You may experience a culture shock just as much as moving to another continent.

If you want to move to another state - by all means move. But if you do it for the sole reason to save a couple of bucks in taxes, you may be penny-wise, pound-foolish.

  • 1
    Yes, everyone should be glad when the majority of government income comes from taxes. Alternative ways of funding are much worse.
    – hlovdal
    Commented Apr 1, 2018 at 21:27

Won't help you. The first thing your Nevada company must do is go to the state and register to do business in New York as a foreign company (foreign state). Most states set this fee same as to register a domestic company company (no savings there). And taxes on income earned in NY state will be the same.

Your customers may check, and refuse to pay a non-registered business, since this is a common "trick".

It will also add the expense of maintaining a Nevada registered agent. A registered agent is a business office with a street address that is staffed and open for walk-ups 9-5. It is mandatory for a single purpose: So a process server can physically serve lawsuit notices and the like.*

You also need a registered agent in your state of residence unless you actually are home most of the time between 9-5. Process servers are used to occasional misses and will retry a couple times, but if you miss him 3 times, you failed.

What's more, anything but a C-corporation (or LLC electing C-corp taxation) is a pass-through entity -- meaning the entity's income passes through and is taxed as part of your personal 1040 -- the very thing you are trying to avoid.

You can go C-corp, but the C-corp still has to pay NYS taxes. And then you get the "double taxation" problem of the corporation paying profits and then you paying taxes on the dividends/stock sale value.

* You may have heard of a game called "evading service" where you make yourself difficult to serve. That has some force in evictions, automobile repos and other lowbrow actions where a "holding action" is meaningful. It's worse than useless in corporations. The judge will scoff at your lack of registered agent and let the plaintiff exploit the advantage of your absence. Holding actions are a lost cause in tax matters because the state has infinite patience and no statute of limitations.

  • The correct answer - of course.
    – Fattie
    Commented Apr 1, 2018 at 15:52

New York state income tax is about 6.65% for people earning under $214,000. Assuming your income is high for a web dev at $100,000, you're looking at saving about $6,000 per year. NYC is a pretty awesome place to live. I'd say it's worth it. But you're not going to be able to save much beyond that with some complex tax plan involving shell companies, lawyers, accountants, all while keeping up with current tax laws. You'll probably make more money per hour just getting more clients or working more hours instead of trying to minimize your tax liability.


1) You will always have to pay federal income tax on your income.
2) The corporate tax rate is now lower than the personal tax rate (for incomes above a certain threshold).
3) Even if you have a corporation you have to pay yourself and then pay taxes at the personal tax rate.

There's very little you can do to change any of the 3 statements above. What's usually suggested to people like you is to create a corporation and not pay yourself 100% of the profits (more on that in a minute). This also has some tax advantages when you buy things that you need for your business.
Your business generates profit which turns into the business' money. You could pay yourself all of that money (if you were the only employee/shareholder). This will not reduce your tax burden a significant amount. The advantage only comes if your business buys/pays for things that you usually would, or if you don't pay yourself more money than you need.
Say you need $70k a year to live off, but you make significantly more than that. In your current situation you pay the 35% tax rate on all the income. However, if your business makes significantly more than that, the business only pays 21%. You can then pay yourself $70k per year (or even less, if your business pays for the business related things that you now have to pay for), and pay taxes on the $70k. The rest remains in the business' accounts until it's needed. The business could also invest the remaining money.

Either way you're going to have to contact an accountant/tax professional to see how much exactly you're going to save (if any) at which income levels.


Adding more to explain what you've heard about Puerto Rico. This obviously applies if you, like hundreds recently, decide to move to Puerto Rico for fun and profit.


  • As others have mentioned, you can't escape NY taxes without moving out of NY. I'd strongly consider moving, given your geographical flexibility and the nature of your business.

  • US citizens, green card holders owe Federal income tax no matter where they live in the world. Plus state taxes in 50 states and PR/other territories. Usually this would mean that you can only tinker with your tax rate by moving; no matter where you go, you pay federal + state or federal + foreign country taxes, with a few exemptions here and there that phase out as your income increases. At least in TX/FL & other no income tax states, if you don't like taxes, you just downsize your consumption of housing and goods, so you can in fact tailor your tax rate dramatically with those choices (calculation left up to the reader). Your tax rate floor is federal taxes even for the best of the 50 states, so this is where the Puerto Rico opportunity comes in.

EXCEPT if a US citizen lives in Puerto Rico: then they enter a unique US federal tax twilight zone that applies to their earnings traceable to activities in PR (so still not lowering taxes on worldwide business activities).

  • Puerto Rico residents (living 183 days/year on island or more) pay income tax to Puerto Rico instead of the IRS, except federal self employment taxes (around 15% if self-employed in PR).

  • So far, at 33% top PR/state rate which with self-employment can go as high as 48%, this sounds equivalent to moving to Florida or Arizona.

EXCEPT EXCEPT - There are 2 ways to have much much lower taxes in PR that are commonly used and 100% legal. To get the much lower taxes, you have to live in Puerto Rico. There is no way to do this remotely - staying in NY means NY taxes.

  1. (4% corporate tax + capped personal tax - target 10% or lower overall tax rate) Incorporate an LLC in PR with a service business (e.g. consulting, software/app, other services) where the revenue to your business in PR originates from (e.g. clients or customers) outside PR, and the LLC qualifies under Puerto Rico "Act 20". To get the better tax rate, you have to be sure that the revenue qualifies for Act 20.

    • In this scenario, you pay yourself a typical salary (which is taxed at the usual PR tax brackets and US social security/medicare taxes), and the excess income can be immediately "dividended out" to you as tax free dividends - tax free in PR, tax free from the IRS.
    • You can imagine if your PR LLC bills out $200,000 from software consulting, pays 4% of $100k and pays you a salary of $100k, with PR taxes of around $30k, then your effective total tax rate is about 15%, and as your revenues increase while your salary is fixed, your tax rate goes down from there. Local wages are 30-50% lower than the mainland too, for determining the "wage" portion of overall business income. This configuration is similar to another post regarding owning an S-corp or LLC in Delaware or Nevada and paying yourself a salary. The difference is that the tax rates are simply lower at the corporate level.
  2. (0% personal capital gains rate) If you make money from investments or trading, then those activities are taxed at 0% if you apply and receive a personal "Act 22" tax designation and live in PR. Previous investments brought to PR and with capital gains or interest will still owe cap-gain taxes to the IRS for gains that occurred before the move, but new investments and gains after moving to PR will be taxed at 0%. No catches, basically triple tax exempt - no state, no federal, no local taxes on long and short term capital gains.

So if you put in a little bit of effort and have either a) a service export business or b) a capital gains (especially short term) type of income, then you should be able to hit the 0-10% overall, total, net-net tax rate living in PR.

That's pretty incredible for a US citizen - in fact, not remotely possible anywhere else in the world. You'll pay at least federal (20-37% according to your federal tax bracket) no matter where you live and no matter how you pass money through an LLC (same fed rate) or Corp. (double taxed, works out to the same or more than LLC). Non PR US investors still pay at least the dividend/capital gains rate of 20-23%.

  • This drastic improvement in taxation is why tens of crypto billionaires and millionaire entrepreneurs have moved to PR after hurricane Maria - they found all this out and that crypto gains would be tax free for them (for the gains that accumulate after their move). These low tax rates apply to future gains from their investments and projects, note. It is also 80-95 degrees and sunny.

  • These laws have been around since winter 2012. Word has filtered out slowly, but with crypto, word is getting out a bit more. Remember, Puerto Rico Act 22 is accidentally tailor-made to help an investor grow their wealth while reducing capital gains taxes better than any other framework in the world.

  • One more catch. The Act 20 and Act 22 contracts between your business and the government of Puerto Rico are supposed to last 10-20 years, until 2035. (And have survived hurricane Maria! This shows something about their robustness to political change.) But remember, governments sometimes get into trouble and unilaterally break their promises and contracts. The United States federal government abrogated settled bankruptcy law when it elevated union claims and lowered the priority of bond holders in the GM bankruptcy, among thousands of other examples of a government treating contract as malleable. Nothing is guaranteed in life.

Lots of resources describing the details of Act 20 and Act 22.

E.g. law firm DLA Piper note: https://www.dlapiper.com/en/global/insights/publications/2016/08/puerto-ricos-act-20-and-act-22/

  • Indeed, the OP should move somewhere cheap, as of course almost all remote workers do. P.R. seems like a fantastic (extreme) possibility! But, simply moving to say "a town in Texas" would save them a fortune. It just depends on temperament. If the OP is in to skiing, go live in Park City or Aspen.
    – Fattie
    Commented Apr 1, 2018 at 15:46
  • Update: Acts 20 and 22 were rewritten as Act 60 in mid-2019, taking effect in 2020. The basic ideas are the same, but details and rules have changed. Commented Jul 15, 2020 at 5:23

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