Expatriation

• 1). Find a country or locale that levies significantly lower income tax on its citizens than the United States. Some such places are the British Virgin Islands, the Cayman Islands, Switzerland, Lichtenstein, Monaco, Andorra, Singapore and Hong Kong. (The British Virgin Islands, the Cayman Islands, and Hong Kong are not technically independent nations, but they have independent tax systems that are favorable.)
  
  
• 2). Move to this country and become a citizen or permanent resident. Merely living there is not enough; you need to have legal status to remain there and benefit from its taxation benefits.
  
  
• 3). Surrender your U.S. citizenship. If you do not do this, you will still be subject to U.S. taxation.
  
  This step is ideal for people who plan on making more than $80,000 (or $160,000 as a married couple) per year and do so as an employee or an investor. For those who plan on operating a company that is based in a foreign country and plan on making less than the aforementioned limit, it is easier and more beneficial to simply claim an income tax exclusion for receiving income abroad.
  
  

Receiving Income Abroad

• 1). Get a job or start a business in which you can make money from anywhere in the world. Many freelancers and business people can use the Internet to do exactly what they would normally do regardless of where they are.
  
  
• 2). Become a citizen or legal resident of a foreign country with lenient taxation. (You do not need to surrender your U.S. citizenship.)
  
  
• 3). Organize your business as an limited liability corporation or other legal entity in the foreign country where you are residing. This is beneficial because the company will be subject to the foreign country's taxation rather than U.S. taxation. Make sure, however, that the country you choose has beneficial taxation for businesses. Just because it has low or zero income tax for individuals, that does not necessarily mean that the same can be said for businesses.
  
  

Flipping a House

• 1). Purchase a home or other residential property that is in disrepair or has the potential to quickly appreciate in value.
  
  
• 2). Live in the home for two years of a five-year period. This is necessary because the Internal Revenue Service gives this tax incentive only for a property that is your actual residence.
  
  
• 3). Make improvements on the property, whether by putting new structures there or by renovating old structures. This is the most difficult part of the process, as it requires you to put out significant amounts of time and money.
  
  
• 4). Sell the property at a profit. Your net return comes tax-free up to a limit. That limit is $250,000 if you are married and $125,000 if you are single.