Free Money From the IRS – Child Tax Credit

Guest post by John Ohe, IRS Enrolled Agent and chartered Financial Analyst.

John Ohe 1For many expat families with children under 17 years of age, it is possible to get a “refund” from the IRS without having paid any U.S. taxes. This wonderful subsidy is called the Child Tax Credit. Basically, it’s money that the U.S. government provides to middle income families to help with the cost of raising kids. The Child Tax Credit can be worth as much as $1,000 per child.

Let’s take a look at a couple of examples:

Nancy and John – Nancy works, and John is a stay-at-home dad

Nancy and John have 3 children, all under the age of 17. Nancy earns $30K per year. The family does not have any additional income. At this level, Nancy and John do not owe any income tax (because their income level falls below standard deduction and exemptions). However, they can expect a check (or direct deposit) from the IRS in the amount of $3,000 – assuming Nancy and John file their tax return.

Open up to new possibilities abroad.

Susan and David – Both Susan and David work

Susan and David also have 3 children, all under the age of 17. Susan earns $100K per year as a consultant. David works at a non-profit and earns $30K per year. With a combined income of $130K, this family is earning well above middle class income. The Child Tax Credit normally begins to phase out at $110K in income. However, many U.S. expats have the advantage of exercising the foreign earned income exclusion (FEIE).

Susan qualifies for the FEIE, and will basically wipe out all of her income on their tax return. David will purposely not exercise the FEIE, so that his income will qualify the family to receive the Child Tax Credit. Same as with Nancy and John, Susan and David can expect a check (or direct deposit) from the IRS in the amount of $3,000.

Can I get money back from past years?

Yes. However, there is a 3-year statute of limitation, after which one cannot claim a refund. Therefore, one has until April 15, 2015 to file a 2011 tax return (which was originally due on April 15, 2012).

Tax Deadline Reminder

April 15th – interest on any taxes owed begin accruing
June 15th – due date for filing without the risk of a late penalty
October 15th – due date if you filed an extension

Other articles by this Author

U.S. Expat Taxes – An Introduction

Buying and Selling Real Estate (Foreign or Domestic) from a Tax Perspective

If you would like to submit a tax-related question, please visit us: .

All responses are provided by John Ohe (IRS Enrolled Agent and Chartered Financial Analyst).

Hola Expat helps Americans living abroad with their U.S. tax returns. Our professionals are IRS Enrolled Agents with expertise in expatriate tax return matters. Take a look at our fee schedule. We offer the most sensible pricing among our competitors.

Disclaimer: The answers provided in this article are for general information, and should not be construed as personal tax advice. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved.

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House Sitting – Travel the World and Your Lodging Is Free

Guest post by Josie Schneider. Josie is a freelance writer, international house sitter, Airbnb host, and experience junkie. To help others get started in the rewarding and low-cost world of house sitting, she offers tips and inspiration at her website,

Full Disclosure: This post contains an affiliate link, so if you click on the link and sign up, we will be compensated.

DSC_0431Would you travel more often – or to more exotic locations – if the cost were lower? Imagine being able to travel where you’ve always dreamt of, but couldn’t afford it. Or how about finding a house sitting assignment near your grandchildren and visit them every day for a month. House sitting may be the answer.

Our Adventures

My husband Conrad and I discovered the amazing world of house sitting in 2008 and we have enjoyed several European locations and in the States. We hop from one assignment to the next while exploring the world. We “lived” in a large and comfortable renovated home in Denmark for six weeks. Our next “home” was a remote off-the-grid mountain cabin in southern Spain where we rejuvenated our souls in the glorious natural surroundings for two months. We got ten days of free apartment lodging in amazing Tuscany in return for harvesting olives. And right now we are tending a gorgeous home near Washington D.C. for a year while the two doctor-homeowners are in Italy on work assignment. As I type this, I’m listening to the bubbling fountain in the back yard through the open French doors. Tough work!

Want to change your life? Make it possible, click here

350 year-old adobe home on the mountain

350 year-old adobe home on the mountain

What About You?

Is house sitting for you? If you are flexible, and enjoy discovery and adventure, then it could be a fabulous way to travel for less cost. Most assignments are an even trade – the homeowner gets peace of mind knowing their home, (and sometimes animals), are looked after, and you get free lodging. Lodging costs are a big proportion of your traveling dollars, so without that expense, traveling longer or farther becomes possible.

Visiting family is more feasible too, when you house sit nearby. And because the assignment may be for long periods – like our current one-year house sit – you can really get some quality time with your loved ones.


When you house sit for someone else, their home, and pets, you don’t have a choice of travel dates. You must be flexible enough to adjust to their schedule. And once there, you can’t call the front desk to bring fresh towels. All of the chores – laundry, cleaning, cooking, walking the dog, or mowing the lawn are yours. In addition you are responsible for the well-being of house and animals.

In Tuscany, Italy

In Tuscany, Italy

The Up-Up-Up Side!

The most compelling upside is that your lodging is free. That’s a perfectly good reason to jump for joy, but it is by no means the most important upside, and all seasoned house sitters heartily agree with this next sentence. Cultural immersion and living like a local are by far the most life-affirming and life-changing events that occur while house sitting. Not only do you understand a place after several weeks of living there, but you can choose house sits in locations that are completely unavailable to “regular” travel. Want to look after a cattle farm in the Australian Outback? What about an off-the-grid mountain home in Southern Spain – we did! Or perhaps you’d like a regal Irish castle, all to yourself, in which to spend your summer vacation.

The Procedure

So how do you start house sitting? Websites connect homeowners and house sitters together. The matching-up process is fun and safe, as correspondence is internal, so you keep your privacy. As a potential house sitter, you receive daily emails detailing new assignments. You initiate a back-and-forth communication until a good fit with a homeowner is found. House sitting assignments are available in virtually every state, every country, and every corner of the planet, with very little exception.

Three good house sitting sites, (but there are many):

Wishing you safe and happy travels!

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What Will I Do with All That Free Time in Retirement?

Hi Billy and Akaisha,

Thanks for your article on ‘Are You Afraid of Retirement?‘ and would love to see more articles dealing with the psychological aspects of retirement.

It is a timely article as well as it’s something I am dealing with right now. As you mention, fear can come up and rear its ugly head and as I get older, fear of the unknown is uncomfortable.

I feel as though I have been ‘institutionalized’ by working for almost 40 years and the freedom that appears to be there for me creates fear as well- what will I be doing with all that free time? Traveling around the world isn’t my cup of tea as after about 3 weeks I am ready to go home no matter how exotic the location.

I guess there are different types of retirees and I just gotta figure out what type I am…

Best Regards,

Do not let Fear make your decisions for you. Risk has a price and so does security.

Hi Robert,

Nice to hear from you again and happy to learn that you enjoyed our “Afraid of Retirement” piece.

Sometimes the anxiety we feel can actually be excitement but we don’t recognize it as such. Then again, it is probably a very good idea that you make a list of the things that you are interested in, things you might want to learn or even teach, and places you might want to go. Empty days have a way of filling up anyway, and if you can direct some of that energy into what you want to do, you will have more joy about it.

You could always join a club (gardening, chess, photography, hiking, tennis, etc.) or become a mentor (little brothers and little sisters, volunteer,) or take a class at your community college or city park or even at UDEMY or an online university (painting, accounting, computer class, woodworking, learn about world history, art) — there really is so much to do to fill up one’s days.

Take a look at our Preferred Links Pages for some ideas.

But the best thing is to know who you are and what you want. What do you want to do? Start there.

Thanks again for writing, and good luck. Once you get started I think it will be easier for you and you will have some excitement about your retirement future.


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Would You Retire in Today’s Financial Market?

Hi, I’ve emailed you a couple of times in the past on other issues, but just read your latest article on “fear” of retirement.

This question is for both of you, but I know Billy handles a lot of the investment ideas etc. Our fear being under 50 years old, but with enough invested to handle the traditional idea of 4% withdrawals, is that the investment climate is so different than when you guys retired in the early 90’s.

We have markets at new highs and bonds at all time low yields and CD’s and money market instruments basically pay nothing. I’m wondering if you could imagine yourselves making that decision now based on today’s investment horizon, would you have saved more to account for what might be a much smaller SWR like 2-3% instead of 4%, or anything else different you might have done?

Thanks so much.


Do not let Fear make your decisions for you. Risk has a price and so does security.

Hi Darin,

Thanks for taking the time to write. We appreciate it.

The fact is that in January of 1991 we had no idea of what the market was going to return in the future. All we could do was base our best guess on past returns. And honestly I cannot tell you what it’s going to do from here. However we have faith in ourselves and a strong will to succeed.

The S&P 500 has had a compound annual growth rate of better than 10% over the last 70 years. So pulling out 4% leaves you 6% for inflation and growth. Sure, if you can get your withdrawal rate lower than 4% all the better. There have been years when we went above it, however on average we have stayed below.

Flexibility is key, tracking your expenses and knowing what percentage of your net worth you are spending at any point in time is valuable.

If you are concerned for the next few years you could also have a larger than normal cash position.

At some point you have to have faith in yourselves and know that you can manage accordingly.

Would we do it again? Heck yes!


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Compliments on Your Website

Billy and Akaisha,

Just wanted to drop you a line and share how much I enjoy reading Retire Early Lifestyle articles. I cannot recall precisely how or when I first found your page, but I know it was somewhere around 2008, so I’ve been following your adventures for about 6-7 years.

I always find your observations about the world to be very detailed, to-the-point, and also warm and caring. Your site offers a depth of understanding to the world that I don’t have the luxury to enjoy…yet. But I’m on the path, and it’s enjoyable to see someone who is already there and encouraging others.

I just turned 39-years-old this past year, and after realizing that you two retired a year younger than that has pushed me to focus more intently on my goals so that my family can enjoy more of my time once I’m past the point of needing the 9-5 (or in my case 7-4). I have three kids, one of which is age 4 presently, so I probably won’t be traveling the world full time just yet. But my wife and I have plans to exit the “daily grind” within the decade. I have you to thank for the motivation to pursue this audacious–and very exciting–goal.

Thanks again for all you do!


Want to retire? Not sure you can? Your Retirement Dream IS Possible! For more information, click here

Hi Sid!

Wow… thank you for such a heartwarming and detailed email letting us know how you enjoy our website and articles. This is fabulous!

What is even better is that you are at such a young age to have full awareness of how important it is to save for the lifestyle of your choosing. If you keep focused and keep your dreams alive, you will surely accomplish this goal. We are happy that you and your wife are on the same page. Some couples are not and it makes it harder to move forward into this lifestyle of financial freedom. So we would like to congratulate you both on that achievement!

Just in case you might be interested, we know of several families who travel with their children — one family has 5 children and she just gave birth to her sixth child while traveling on the road, and another has a child of about 3. So if that is a lifestyle you might choose, realize that others are doing it successfully and joyfully.

Please feel free to write any time.

Wishing you all the best on your road to financial freedom, and thanks again for taking the time to write.


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I Want to Leave the Rat Race


My name is Peter and I purchased a copy of your “Adventurer’s Guide to Early Retirement” about 3 years back. While I haven’t corresponded before I did enjoy your book and have been a consistent reader of your website and I must say I admire your “get up ‘n go”.

From reading your website and other sites on the subject of early retirement and world travel there seems to be a consistent theme of some life changing event, often a negative one such as marriage breakup, family tragedy etc. While understandable that people see these events as catalysts for change my question is are there any people who just do this, travel the world with a back pack or some such, just because they are footloose or simply want to view things/be out of the rat race.

The reason I am asking is that I frequently feel a need to break free from the rat race. I am an Australian, semi-retired making my living from option trading, happily married, 2 grown up children, 2 delightful grandchildren, nice house, nice area, 2 cars, dog, money in the bank etc., etc. Oh and I am 61. What I struggle with (apart from talking my wife into cutting loose also) is why I have this urge. Have no financial need to live in a lower cost country, have a good life where I am so why a desire to cut loose. Have traveled extensively over the years (ex-Australian military and lived in both Malaysia and England while in the military) and regularly wander up to Malaysia for a couple of weeks at a time each year.

Are there others out there you are aware of similar to me, would love to correspond with someone of a similar ilk.


Life is an adventure. Follow your dreams.

Hi Peter,

Thanks for taking the time to write, we appreciate it. And thank you for your interest in our books and website!

In terms of meeting others who like to travel, it’s best to meet them while on the road. It’s not as easy to meet them in one’s regular routine — as these people are out traveling!

We see the urge to travel the world as a “normal” thing — but it is true — not everyone is a traveler and some can’t imagine leaving their lifestyles, gardens and pets. And of course, we are not pushing them to do so, everyone is different. But opening one’s self up to other cultures, other foods, other ways of living, other geographical configurations — it’s a fascinating life and one filled with reward.

If you want to “cut loose” but are a bit timid or can’t get your wife on the same page, you might try house sitting as a way to get to other locations and still live in comfort – also you will be able to keep your own home during this time — just have a house sitter sit your home as you sit someone else’s – or do a house exchange. Take a look at our Travel Housing Options page for ideas.

Or you could go traveling on your own or in a small group – our Single Travelers page might give you some insights.

We think having a sense of adventure is an exciting trait and makes for an interesting person. But again, not everyone is the same. If you are interested in a certain location and would like to meet some locals there – you might try joining some of the forums listed on our Relocation page. Forums are free and it’s a good way to find out what a place is like right from the people who are living there.

If you really want to break free from the rat race, then you could downsize your home and cut back on the number of vehicles you own and maintain. Track your spending for the life you are living now, and see where you could make changes. What would it cost you if your housing and transport categories were modified? When your monthly number is one you can maintain without working or without financial stress to you, then you are able to break free from the prescribed manner of living and choose a life of your own creation.

If your wife is not on board for these changes and you are still interested in making them, then you need to make the “new life” interesting to her. What would she gain if you downsized or changed your manner of living? Is there anything that she would be attracted to? Maybe she is comfortable in the home you have now and with the ability to see the kids and grandkids regularly. It would be a large change for her but perhaps doing some “snowbird” combination like travel for so many months and then being home for so many months might work.

We discuss different options for disagreeing couples in our book, Your Retirement Dream IS Possible which you might find useful.

I hope that I have answered your question, and if you have more questions, please feel free to write back to us any time.

Wishing you great success in creating the life that you want,


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Sell My Car? And What About a Spreadsheet?

Hi Akaisha,

I just heard your interview with Mad Fientist, it was great.

I’m seriously considering selling my car, and that interview helped. You referred to your spreadsheets to track your daily/annual spending-do you show those anywhere? If so, please let me know. I checked in your retirement book that I bought and I could not find it-I’m interested in how you set it up and how you track them, I do not need to see your actual expenses, that’s not my business.

Thank you for your help.


Do not let Fear make your decisions for you. Risk has a price and so does security.

Hi Mark,

Good to hear from you. Thanks for your kind words about the Mad Fientist interview. It was a fun interview to do. If you are thinking of selling your car, you might also take a look at our Car Free piece.

We give a downloadable spread sheet and explain how we set it up in our book, Your Retirement Dream is Possible. It’s the only place this spreadsheet is located.

In terms of our expenses you might want to take a look at our video, Adventures in Financial Independence, where we give our average spending for over two decades.

Let me know if you have other questions. Always happy to answer them.


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See the World on 10k Annual Income?

Hi Bill and Akaisha,

I enjoy reading your articles. But when you keep talking about portfolios, it seems it doesn’t reflect for the very poor. How can I have medical coverage and see the world, with an income of 10k yearly. I’m 53, and keep dreaming of these wonderful places, also, I’m single. Thanks so much for your time and dedication.


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Hi Asha,

Thanks for taking the time to write, we appreciate it.

That is a challenge to be able to “see the world” on $10,000 a year income. We know people who are living overseas on that amount but they do not do that much travel, or if they do travel it’s with local transport and not all that often.

The largest expenses that you would have to concern yourself with is housing, transport and food. If you can find a decent place to rent for about $200-$300 a month (which is doable in Thailand, Mexico, Guatemala etc.) that leaves about $500-$600 for other things. Food is generally cheap in the aforementioned countries so you could find yourself with several hundred a month to put towards travel — so long as you don’t find yourself spending this “extra” money on dental care or other medical needs.

To have adequate access to medical, you would probably have to live overseas and pay out of pocket. This would probably work until or unless you had contracted some chronic health condition which would require medications or frequent and regular visits to the doctor.

Medical care is generally more affordable overseas with doctor’s visits and medications at lower cost. Even paying for help around the house or with shopping and cleaning is affordable, but you would be wise to set aside some money for an emergency fund should you need it.

And don’t forget the expense of renewing your visa. This will often entail traveling outside the country to get stamped out and then get stamped back in every so many months. You might try applying for a retirement visa or a permanent visa, but often there will be financial requirements that you might not meet. In this case, you will need to continue to renew your tourist visa.

We know a man who does some “slow travel” and he lives on $12k a year and seems to be able to manage that fairly well. It’s definitely doable and not impossible. If you are self-disciplined, then it is probable that you will be able to manage some travel on your $10k a year.

Take a look at our Relocation Page and find some Expat forums where you will be able to find out what the local expenses are in any location.

We wish you the best of luck. Do your research and you are apt to find some doors opening to you.

All the best,


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Q&A with a Reader: Working Overseas While Retired

Hello I am interested in going to one of your suggested retirement locations. I don’t have enough money to simply not work. I am interested in part time or seasonal work possibly in the hotel or concession business. I haven’t read any articles of places one would have a good chance of doing some part time work. How does Panama look as far as that is concerned?



Not sure you can retire? Get answers here

Hi Tom,

Thank you for taking the time to write, we appreciate it.

We don’t know anything about Panama personally, as we have never been there. However, I can suggest that you go to our Relocation page and contact some of the Expat Forums listed there. People on the forums, who actually live in these locations, will respond to your questions and perhaps help you set up. There is a forum especially for living in Panama listed on this page.

Also, you might take a look at our Retirement Jobs Page and see if any of these job situations might work for you. There are part time, seasonal, dream jobs, adventure jobs, working from home jobs and more

Good luck to you. A little research on these pages should pay off for you.


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Starving for Time to Ourselves

I am Matt from NY.

Tough and stressful in Queens , NY – between the time we spend commuting, working, etc. and things we have to do each and every day of our life, most people don`t have but 1 or 2 hrs a day to themselves.


Hi Matt,

Great to hear from you!

Your description of life in NY with a full work schedule is exactly what motivated us to save our money, invest wisely, cut our expenses and retire early. We had every creature comfort but we were starving for time to ourselves.

We encourage you to reassess your current situation and look to where you want to go in your future. We believe that if we can do it, anyone can.

Take a look at our Retirement Issues Page as well as our Digital Book Store. Both our books, The Adventurer’s Guide to Early Retirement, A Common Sense Approach and Your Retirement Dream IS Possible will help you get your life on track for retirement. We give lots of good tools for you to use including a downloadable spreadsheet for tracking your expenses.

We wish you the very best now and in the future.

Feel free to write any time.


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