Crypto seems like a natural fit for digital nomads, decentralized, borderless, and available wherever there’s Wi-Fi. You can earn in Bitcoin, get paid in stablecoins, stake Ethereum, and never touch a traditional bank again. No fixed address, no permanent ties, just you, your hardware wallet, and a VPN.
But here’s the thing: tax law is not borderless. Not even close.
Whether you’re freelancing from a co-working space in Lisbon or trading crypto while hopping between Mexico City and Bali, your tax situation follows you. And that’s where things get murky. It’s not just about where you are, it’s about where each government thinks you are.
The U.S. Never Lets Go
If you’re a U.S. citizen or green card holder, the rules are pretty blunt: you owe tax on everything you earn, everywhere, no matter where you live. The IRS doesn’t care if you’ve been abroad for ten months or ten years. You still have to file.
This includes:
- Capital gains from crypto sales or swaps
- Income from staking, mining, freelancing, or airdrops
- NFTs you sold, DeFi rewards, even tokens you forgot you claimed
At minimum, you’ll be looking at:
- Form 1040: your standard U.S. tax return
- Schedule D + Form 8949: to report crypto gains or losses
- Schedule 1 or C: for income you earned in crypto
- FBAR and/or Form 8938: if you hold crypto through certain foreign accounts or platforms
Even if you’re paying tax in another country, you still need to file in the U.S. You can use the Foreign Tax Credit or Foreign Earned Income Exclusion to avoid double-taxation, but skipping your U.S. return entirely? That’s not how this works.
Other Countries Have Their Own Rules
Let’s say you’re living out of Airbnbs across Europe. If you spend enough time in one country, usually 183 days, but it can be less depending on your situation, they may consider you a tax resident. That might mean filing locally. It might also mean paying taxes there, even if you didn’t expect to.
Here’s where crypto adds complexity:
- France, for example, taxes certain crypto gains even if you don’t cash out to fiat
- Argentina is known for taxing crypto assets as part of your net worth
- Portugal was once a haven for crypto, but recent changes mean that window is closing
Some countries require you to report your crypto holdings annually.
Others are still figuring it out. But don’t assume that silence means safety. Tax rules tend to catch up, especially when there’s money involved.
Easy Mistakes That Get People Into Trouble
- Thinking “no address” means no residency: It doesn’t. Days spent, business ties, even a local gym membership can create tax obligations.
- Using local exchanges: Some countries (like the UK and Japan) require those platforms to report user activity to their tax authorities.
- Assuming no one shares info: Over 100 countries now exchange tax data through FATCA and CRS. It’s no longer difficult for governments to connect the dots.
- Skipping U.S. filing because you paid tax abroad: You still have to file. You just use credits or exclusions to reduce what you owe.
Planning Tips for Crypto Nomads
- Track how many days you spend in each country. It matters more than you think.
- Before using a local exchange, check the country’s crypto tax policies.
- Keep solid records of all trades, conversions, airdrops, and earnings.
- Use tools like Koinly, CoinLedger, or CoinTracker to help sort it all. They’re not perfect, but they’re better than Excel.
- And if you’re not sure how to handle it all, especially with multiple countries involved, talk to a cross-border tax advisor who actually understands crypto. Expat US Tax can help you with this.
A Final Word
Crypto might feel borderless, but taxes definitely aren’t. As a digital nomad, your lifestyle puts you in the overlap between tax systems and crypto can make those overlaps messy.
You don’t need to have it all perfectly figured out. But knowing where you’re a tax resident, what you need to report, and who you might owe something to? That’s what keeps a side hustle from turning into a tax headache later.
And no, the IRS doesn’t care if your laptop got stolen in Chiang Mai or if your ETH is locked in a forgotten wallet. They still expect the forms. Better to be one step ahead than scrambling to clean it up later.