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As in, you're still in some way paying U.S. taxes as well as those where you are abroad, or that the taxes abroad are brutal...? I'm not sure I follow which way you mean, mainly as I've never had the opportunity to live in another country.
As a US citizen you are technically always responsible for paying taxes no matter where you live. The US has a citizenship-based tax system (you owe on worldwide income regardless of where you live). Most other countries in the world have only a residency-based system (you owe only if you are actively living in that particular country). You are still required to file every year and you're going to need someone more sophisticated than the dude at H&R Block or a free Quickbooks whatever. You need someone who is comfortable working with expats.
"Doesn't that mean I have to pay taxes for both the US and my new country then?" No. The US has dual taxation agreements with most countries. That means that, basically, the US will not charge you taxes for things you've already been taxed for.
The main goal of paying less in taxes is to reduce your taxable income. The biggest chunk of this will happen with the Foreign Earned Income Exclusion. That essentially says that the first $120k you earn in a year is tax free. You can qualify for it by staying out of America for 330 days per year. There is no requirement to have residency anywhere else.. You just have to be outside of the US.
That $120k rises every year. When you make more than that and do start to owe taxes, you will start to owe from the lowest tax bracket as well.
If you make $120k and do this, you just got a $30k raise in the form of taxes you no longer owe.. You can pretty much travel the world for free using this money.
Now, I said that most non-US countries have a residency-based taxation system. That generally only starts to kick in after living in that country for 181 days. If you stay there for less time, you don't owe them any money.
There are also countries who don't have income tax or do but actively tell you not to pay it.
Living in a combination of these places, and bouncing around every few months you avoid any real responsibility to anyone.
If you do earn more than $120k per year, you can reduce your taxable income even further by doing things like maxing out your 401k contribution.. That gets you to $142500 or so tax free. And again, you'd start paying taxes at the lowest rate above that.
Any other thing you mention in your US filing that can reduce your taxable income also contributes.. Getting married, depreciation value on a home (US or not), investment losses, etc..
Working remotely from the US also gets you a higher salary than if you had just taken a job in the UK or Germany or Japan or something.. So you can have the higher salary and the higher quality of live at the same time. You give up some employment protections and European style summer vacations but I'm personally ok with it.
Also, if you are working for a US company remotely, you can add these expected deductions to you W4 and never get charged for them in the first place.. You'd have a MUCH higher weekly salary and wouldn't have to wait for your tax return every year to take advantage of these benefits.
So spend summers in Italy, autumn in Japan, winter in New Zealand, and spring in Mexico. You earn an American salary, take advantage of lower cost of living, travel the world, and its all basically free.. Good luck trying to get me to move back to the US.
There's more but these are the major points.
My uncle did this in retirement. Dual citizenship US - Italy. Moving to southern Italy village of less than 20k population means 7% flat tax for 10 years. He’s probably saving 100k per year in taxes. Which pays a lot toward a nice villa, a sailboat, dinners out, and travel money.
I don’t know all the details (yet). I also have US/Italian/EU citizenship, so it’s something I thing about. I think about living in a sailboat in the Mediterranean often.
It’s all very interesting. Your method is even more intriguing.
Have any good resources in the topic you can share?
For what it's worth, I haven't paid more than ~1% effective tax rate in years. This past year I owed like $50 total.. For the whole year. Something like 0.03% of my actual income.
If you want to stay stationary, 7% is pretty decent but you can do better bouncing around.
I’d really love to see some starting point information I can digest on this subject. If you have any please share.