If you love to give your money to the government -- enjoy that. Digital Nomads have figured a better option over traditional taxation.

Digital Nomadism is a hot topic and a growing trend, especially among entrepreneurs. Being a digital nomad isn’t just about traveling the world and making everyone back home jealous on social media. Some of us on the road are doing it for the , and I don’t just mean the lower cost of living.

How do we get the savings?

Being abroad can save us thousands of dollars every year in taxes, especially as an entrepreneur. As Mark Dissen, my nomadic accountant and founder of Wayfare Accounting LLC explains, there are several completely legal ways for nomadic entrepreneurs to maximize their tax savings.

Related: The Top Four Tax Strategies To Save Your Business Money

Foreign earned income exclusion (FEIE).

The United States is one of the a very small group of countries that uses a citizenship-based tax system rather than a residence based tax system. This means that you are required to pay federal income taxes no matter where on the planet you’re located.

There is, however, the Foreign Earned Income Exclusion (FEIE) -- a loophole that many digital nomads use which exempts you from income tax on up to $102,100 (in 2017) of your earned income. This applies whether you’re a full time employee or an entrepreneur.

You can qualify for the FEIE by passing either the Physical Presence Test or the Bona Fide Residence Test.

Related: Selling Overseas

The Physical Presence Test: requires you to stay out of the country for 330 days out of 365 consecutive days, with the start and end days falling at any point during the year.

The Bona Fide Residence Test: requires you to reside outside the USA for a full calendar year, which is January first to December 31.

The FEIE does not apply to passive income such as most rent, interest, capital gains, and dividends. It also doesn’t exempt any of your income from self-employment tax, only income tax, so you may diminish your tax burden as an entrepreneurial nomad, but not eliminate it entirely.

The FEIE is highly detailed and easy to do incorrectly. If you mess it up, you can lose a lot of money from nuanced details like that you should be using “accrual accounting” and that partial days in the US count against you.

S-Corp election.

As an entrepreneur, you’ve likely already heard about the importance of incorporating, and quite possibly been overwhelmed by which type of business entity you should choose.

Incorporating can save you a lot of money in taxes as well as protect you from liability. One of the most popular business entities for small businesses is a Limited Liability Company (LLC).

As an LLC, you have the choice between being taxed as a “Disregarded Entity,” which is the same as being taxed as if you weren’t incorporated, or as an S-Corp. An S-Corp is a potential means of reducing the Income and Self-Employment taxes that the FEIE doesn’t cover.

As an S-Corp, you can make distributions to yourself, which are not subject to self-employment tax. The catch is that you must still pay yourself a “reasonable salary,” which is taxed.

For example, if you work as a developer and earn $100,000 a year, you might be able to pay yourself a salary of $60,000 a year and take the remaining $40,000 as a distribution. This could enable you to avoid paying about $6,000 of self-employment tax on your $40,000 distribution.

Electing to be taxed as an S-Corp does come with some additional administrative costs and complexities, so do your homework thoroughly or budget for a good .

Know your deductions.

One of the simplest but most underused ways to reduce your tax bill each year is to reduce your taxable income through deductions. Freelancers and small business owners often overlook potential deductions and pay far more to the IRS than they legally must.

A few commonly overlooked deductions for digital nomad entrepreneurs are:

Depreciating your computer and other equipment.

Your home office or coworking space.

Mileage driven for business reasons.

Travel Meals (this can be HUGE if done correctly).

Moving expenses.

Most people miss these deductions for two simple reasons: they either don’t know about them or they did a poor job keeping recordings and don’t know what they did during the year.

Using an accounting platform for your business will save you a lot of headache and money during tax-time by keeping track of everything during the year. Come tax-time, you’ll be able to avoid the headache of scouring bank recordings and hunting down receipts. Have all your business expenses and nicely organized for yourself or your CPA.

Related: 75 Items You May Be Able to Deduct from Your Taxes

Establish a tax home.

Digital nomads, by definition, are a lot more mobile than the average taxpayer. As a result, they accrue much more in potentially deductible travel expenses.

However, in order to deduct any travel expenses at all, you must have an actual “tax home." A tax home isn’t necessarily the same as an actual domicile. Your tax home could be your primary place of business or permanent residence.

If you don’t have a primary place of business and are constantly on the road, you might not have a tax home and the IRS could consider you to be an itinerant.

As an itinerant, you are ineligible to to deduct any business travel expenses, which could be very expensive come tax-time. If you move around all the time and want to avoid being considered an itinerant, establish a place you can call your primary place of business. It doesn’t have to be in the USA, but this could save you a lot of money in taxes.

Avoid healthcare costs.

Regardless of how you feel about the Affordable Care Act (aka Obamacare), it could be very expensive for you as a location-independent entrepreneur. The ACA requires you to have health insurance in the USA, even if you’re out of the country for several months and aren’t able to use it. Fortunately for most digital nomads, there are a few ways to avoid the ACA requirements.

Like the FEIE, you are exempt from the healthcare coverage requirement if you are out of the country for 330 days in a 365 day period or have a bona fide residence outside of the USA. Additionally, every taxpayer is granted a “Short-term Gap Exemption,” which is a two consecutive month period each year when they can be without insurance.

If you’re just starting out and not making that much money (or are good enough at accounting to take all your business expenses and show that you make no money on paper), you might also qualify for the low-income healthcare exemption or Medicaid.

Avoid penalties.

U.S. taxes are both complex and confusing, which can be expensive whether you’re an employee or an entrepreneur. If you don’t file your return properly and on time or fail to comply with regulations, you could be liable for tax penalties.

One common penalty that is frequently applied to the unaware self-employed is the interest penalty for failing to file their quarterly estimated payments to the IRS. If you’re self-employed, you should be filing and paying taxes throughout the year, not just in April.

If you maintain financial or bank accounts outside of the USA, you may also be required to submit a FATCA and/or FBAR. While filing these won’t technically increase your tax liability, failing to comply could result in some rather severe penalties.

On the upside, U.S. citizens who are abroad can qualify for a two-month extension on their federal tax returns. This means if you missed the deadline in April, you just might be able to get away with it, with only a small bit of interest.

For future years, it’s fairly easy to file a short form before the deadline and request a six-month extension from the IRS. This extension can help you get organized and possibly qualify for the FEIE.

While U.S. taxes are rarely easy or fun, especially as an entrepreneur, they can be minimized by understanding all the potential loopholes available to digital nomads or the use of a great CPA.

If you were looking for a good reason to take your entrepreneurial journey on the road, these financial incentives could be it. You can consider the adventures you’ll have abroad a bonus while you’re building your company.