The Digital Nomad Starter Guide: Build Income, Handle Taxes, and Travel Smart

The short version: being a digital nomad means your income does not depend on where you sit. Making that work takes more planning than the photos suggest: a reliable way to earn, an understanding of your taxes and the rules of each country, a safety plan, and a budget that survives a slow month. This starter guide covers the steps in the order that matters, and points to marketplace listings and business models that suit a location-independent plan.

What a digital nomad is, and how common it is

A digital nomad works remotely while moving between places rather than staying in one home. MBO Partners’ 2025 research estimated about 18.5 million American workers identify this way, up roughly 153% since 2019 and equal to roughly 12% of the U.S. workforce. Two details matter for anyone planning to start a business. First, most nomads (about 11.2 million) hold traditional jobs, while about 7.3 million are independent workers. Second, the typical nomad does not move constantly: the report found an average of about 6.2 locations in 2025 with stays averaging about 6.4 weeks. That pattern, often called slow travel, tends to be easier on work, budgets, and visas than hopping every few days.

The same research found that about 75% of nomads are Gen Z or Millennials and that 82% report being highly satisfied with their work. Surveys like these describe people who responded, not a guarantee of what you will experience, so use them for context rather than prediction.

The honest trade-offs

Before you plan the route, plan for the downsides. Travel-and-work writing, including Entrepreneur’s coverage of remote life, consistently points to the same friction: unreliable internet, no dedicated workspace, difficulty switching off, travel fatigue, and the challenge of building a stable career while constantly moving. Many people who try the lifestyle settle into a slower version of it. None of this is a reason not to try. It is a reason to test with a shorter trip first.

Step 1: Secure your income before you leave

The most common failure is leaving with a plan to figure out income later. Build the income first, and treat the trip as a way to spend the money you already earn.

Pick an income model

• Keep your job and ask about remote work. This is the lowest-risk route. Be careful: get your employer’s written approval before working from another state or country. Tax, payroll, and legal rules can apply to your employer, and MBO Partners reports that a notable share of nomads with jobs have not told their employers where they work.
• Freelance or consult. Sell a skill to clients. See our guides to starting a virtual assistant business, AI automation consulting, and tax preparation.
• Sell digital or online products. Templates, courses, and online stores can be run from anywhere. Start with digital products or print on demand.
• Join a referral, affiliate, or representative program. These can have low startup costs, but you must read the compensation plan and income disclosures carefully. See compensation plans and income disclosures explained.

Set an income test

A simple rule many advisors suggest, and which is our suggestion rather than a requirement: do not leave until your location-independent income has covered your bills for several consecutive months while you are still at home. If that test feels impossible, keep working on the business first.

Step 2: Understand your taxes

This is general information, not tax advice. Talk to a tax professional who handles international situations before you go.

• U.S. citizens are generally taxed on worldwide income, wherever they live. Moving abroad does not by itself end the obligation to file a U.S. return.
• The foreign earned income exclusion. Some Americans working abroad can exclude part of their foreign earned income, up to an annual limit that is adjusted for inflation. To qualify you need a tax home in a foreign country and must pass either the bona fide residence test or the physical presence test. See the IRS page on the foreign earned income exclusion.
• The physical presence test is strict. It requires you to be physically present in a foreign country or countries for at least 330 full days during any 12 consecutive months. The days need not be consecutive, but a full day means midnight to midnight, and time over international waters does not count as time in a foreign country. Read the IRS explanation of the physical presence test. Many slow-travel nomads who return to the U.S. regularly will not meet it.
• Self-employment tax and estimated tax. If you work for yourself, you generally owe Social Security and Medicare taxes on net earnings and may need to pay estimated taxes quarterly. See the IRS self-employment tax page.
• Foreign bank accounts. A U.S. person with a financial interest in or signature authority over foreign financial accounts must file an FBAR with FinCEN if the combined value of those accounts exceeds $10,000 at any point in the calendar year. See FinCEN FBAR guidance.
• Your home state. States have their own rules about when you stop being a resident for tax purposes. Check your state’s tax agency before you assume you have left.
• More detail. The IRS publishes Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Step 3: Check the rules of each country

Visa and work rules vary by country, and they change. A tourist stay may not permit you to work, even remotely for a foreign client, in some places. A growing number of countries offer special long-stay visas for remote workers, with their own income, insurance, and tax conditions. Always rely on the destination government’s official immigration website, not a blog post, including this one. Also check how long your passport must remain valid, since many countries require a minimum validity beyond your planned departure date.

Step 4: Build a safety plan

• Enroll in STEP. The State Department’s Smart Traveler Enrollment Program is free and sends you alerts from U.S. embassies and consulates, and lets them reach you or your emergency contact in a crisis.
• Check health guidance. The CDC’s Travelers’ Health site lists destination health information and recommended vaccines. Talk to a healthcare provider before a long trip.
• Buy travel and medical insurance. Make sure it covers emergencies and healthcare in the countries on your route, and read the exclusions. Typical travel policies may not cover long stays or working abroad.
• Protect your identity and accounts. Use a password manager and two-step verification, consider a credit freeze before you leave, and keep digital backups of your passport and key documents.
• Plan for money. Carry a card that does not charge foreign transaction fees, keep a backup card and some cash, and tell your bank where you are going.

Step 5: Set up your work so it survives bad Wi-Fi

• Check connection speed and workspace options before you book a stay. Ask hosts for a speed test screenshot.
• Carry an unlocked phone that accepts local SIM cards or eSIMs as a backup hotspot.
• Keep working files in cloud storage and set up offline access for critical documents.
• Agree on a core overlap window with clients in other time zones so a flight day does not become a missed deadline.
• Set up a business address or mail-forwarding service if you sell your home or let your lease end.

Step 6: Budget with a margin

Costs depend on where you go and how you live, so build your own budget instead of using a generic figure. Include: lodging, food, local transport, flights, insurance, phone and internet, coworking, software, taxes, a health reserve, and a business reserve. As a general planning habit (our suggestion, not a rule), keep a cash cushion large enough to cover a bad month in both your business and your travel plans. If your income is irregular, base your budget on your lower months.

If you are thinking about funding a business before or during travel, read how to finance a business opportunity first, and avoid borrowing to fund a lifestyle trip.

Step 7: Choose a base, then travel slowly

Pick one base for your first few weeks and use it to test your routine: do you get enough work done, sleep well, and stay within budget? Then extend. The stay-length pattern in the MBO data suggests many experienced nomads settle for weeks at a time. Slow travel lowers transport cost, simplifies visa paperwork, and makes it easier to maintain client relationships.

Marketplace listings that fit a location-independent plan

We describe each as the listing describes itself. Listings are provided by advertisers, and SmartBizOpps does not endorse or guarantee any opportunity. Review each one yourself and run it through our vetting process.

• David Allen Capital: a business funding broker model described as flexible and independent, and runnable from anywhere. Check your state’s licensing rules for any financing-related activity.
• Hotels Etc.: a travel membership opportunity described as remote work around a practical, reusable product.
• Everyday Income Partners: an online, referral-based shopping business listing a $350 starting cost.
• My Business Venture: an online business with an e-commerce platform and guided support.
• The Supplement Grid: a supplements opportunity with a personalized online store, listing a start under $100. Supplements are regulated products, so read the rules on claims.
• My Rebirth Journey: a personal development and remote sales model that is described as an independent business.
• Unlimited Certificates: a travel-incentive opportunity using printed and digital certificates.
• BeBizBroker: a business brokerage practice that lists a $495 starting cost. Brokerage may involve state licensing.
• LeadPay Partners: an advertising sales opportunity for SmartBizOpps lead-generation programs. Read the program terms before relying on any commission figure.
• Business Remote Income, Sellfy, uScreen, Outgrow, SlickText, and TalkFusion are additional online and affiliate-style listings to compare.

For a wider view of the models behind these, read our companion Business Opportunity Marketplace: Earn From Anywhere Guide.

Scams that target remote workers and travelers

The FTC’s job scam warnings apply directly to this audience: promises of quick, easy money; fees to get hired; costly training or starter kits; reshipping jobs; and fake-check schemes where you are asked to deposit a check and send part of it back. Also be careful with fake rental listings, requests to pay by wire or gift card, and visa “agents” who guarantee approval. See our 12 red flags checklist.

A 12-week starter plan

Weeks 1 to 4: build the income

• Choose your model and write a one-page plan. The SBA’s lean plan template is a good format.
• Find your first paying customers while you are still at home.
• Book a free mentoring session at SCORE for feedback on your plan.

Weeks 5 to 8: handle the paperwork

• Meet a tax professional about residency, the exclusion, estimated taxes, and any foreign account reporting.
• Check visa, insurance, and passport requirements for your first destination.
• Register the business, open a business bank account, and set up bookkeeping. Review business insurance basics.

Weeks 9 to 12: test the lifestyle

• Take a two to four week trial in one place and run your business exactly as you plan to.
• Track hours worked, income, spending, and stress.
• Decide what to adjust before a longer trip.

Frequently asked questions

Do I need a visa to work remotely abroad?

It depends on the country and on what you do. Some places allow short tourist stays but restrict working, and others offer remote-work visas. Check the official government site for each destination.

Do I still pay U.S. taxes?

U.S. citizens are generally taxed on worldwide income. You may qualify for exclusions if you meet strict tests, but you still need to understand filing requirements. Ask a professional.

How much money do I need?

It depends on your route and lifestyle. Build your own budget, include taxes and insurance, and keep a reserve for slow months.

What is the best remote business to start?

There is no single best option. Start with what you are already good at, validate demand with real customers, and keep startup costs low. See our list of top work-from-home opportunities.

Can I claim a home office if I travel full time?

The home office deduction generally needs regular and exclusive use of part of your home for business, so it may not apply if you do not have such space. See IRS Publication 587 and our summary of home-based business tax deductions.

Where to go next

Read what a business opportunity is, compare low-cost home-based options, and browse the marketplace by category or investment level.

Sources

• MBO Partners, 2025 Digital Nomads Trends Report: mbopartners.com
• Internal Revenue Service: Foreign Earned Income Exclusion; Physical Presence Test; Publication 54; Publication 587; Self-Employment Tax
• FinCEN, Report Foreign Bank and Financial Accounts: fincen.gov
• U.S. Department of State, Smart Traveler Enrollment Program: travel.state.gov
• Centers for Disease Control and Prevention, Travelers’ Health: wwwnc.cdc.gov/travel
• Federal Trade Commission, Job Scams: consumer.ftc.gov
• U.S. Small Business Administration, Write Your Business Plan: sba.gov; SCORE: score.org
• Entrepreneur: R.L. Adams, 12 Practical Steps to Become a Digital Nomad and Live a Location-Independent Life (2017): entrepreneur.com; Eva C. Reder, The Myth of the Digital Nomad: What Life as a Remote Worker Is Really Like (2018): entrepreneur.com

Photo by Anastasiia Nelen on Unsplash

This article is general information, not financial, legal, or tax advice. Costs, earnings, and requirements vary by location and by opportunity, so verify details with the company, your state, and a qualified professional before you invest. Listings on SmartBizOpps are provided by advertisers; SmartBizOpps does not endorse or guarantee any opportunity.