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What Digital Nomads Need to Know About Taxes Abroad

It’s risky. Employers need to know where their employees work in case their presence leads to corporate tax obligations abroad. The risk is higher when employees are bringing in revenue for companies, such as in sales positions, said David McKeegan, who co-founded Greenback Tax Services, an accounting firm for U.S. expatriates.

Still, many companies are operating on a “don’t ask, don’t tell” policy. A science writer in his 50s from California, who was granted anonymity because he did not want senior managers to know he had worked from Costa Rica for a few months, said his human resources department discouraged employees from working outside of California, but did not say anything explicit about working abroad. His setup from an Airbnb by the beach worked perfectly until he lost power because of a hurricane and had to work from a bar a few times. He used his company’s Zoom background, but colleagues started asking about where he was when they heard ocean waves and music. “At a restaurant,” he would tell them, without elaborating.

As more people work from abroad, it may be harder for companies to turn a blind eye. About 10.9 million Americans last year described themselves as digital nomads — people who work remotely and tend to travel from place to place — up from 7.3 million in 2019, according to MBO Partners, which provides services for self-employed workers.

“The tax system globally right now is not prepared for what the work force is going through,” Mr. McKeegan said. “I think at some point we’ll see a system where people are asked on the way in or out if they were working and countries will try and get some more tax revenue from this very mobile work force.”

Potentially. If you qualify for the Foreign Earned Income Exclusion, your first $108,700 is exempt from U.S. income tax. But keep in mind that this applies only if you’re a U.S. citizen who resides in a foreign country for more than 330 days within 12 consecutive months, not including time on planes, or if you are a bona fide resident of a foreign country. (You would still have to pay federal and state taxes on unearned income including interest, dividends and capital gains.)

It is important to track the number of days abroad to be able to prove to U.S. tax authorities that you were there.

Paige Brunton, 30, a Canadian website designer based in Hannover, Germany, learned about how complicated the tax rules are for expats the hard way: One year, she had to file tax returns in three countries. The situation was unavoidable, since she had lived and worked in Germany, Canada and the United States during that tax year, but her biggest advice for others who may have complicated situations is to get an accountant who specializes in international tax right away.

“Don’t congregate in Facebook groups and Google, it’ll really stress you out,” she said.

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6 Things You Should Know About Traveling to Europe This Summer

By now, most of the large American-run chains have reverted to their pre-Covid cancellation policies for reservations made before a certain date (that has come and gone), and for travel through a certain date (that has come and gone). But some companies are still being flexible: Hilton has always had generous cancellation policies, and Four Seasons has been consistently easy about changes and cancellations during the pandemic.

Travel-industry insiders also have noticed flexibility among independent hoteliers.

“We’ve felt that small, family-run luxury properties are actually more nimble than some of the big hotel chains,” said Louisa Gehring, the owner of Gehring Travel, an affiliate of Brownell, a Virtuoso luxury travel agency. “Rather than lay off all their employees or point to an overarching corporate cancellation policy, they’ve had flexibility to keep the teams on, work with clients on a case-by-case basis and really step up to the plate.”

Policies vary by property, she added, but even some of the more rigid ones now include exceptions for Covid.

One thing to watch for is the credits-versus-refunds flash point: Even in cases when a hotel won’t swallow a deposit or prepayment outright, will you get a cash refund or will you be asked to rebook? Last year, Greece and Italy both passed laws allowing hotels and other travel companies to issue credits, rather than cash refunds, for canceled bookings. Although vaccines, the eagerness to travel and pandemic fatigue may make the idea of a credit less odious than it seemed last spring, always ask about policy specifics, including blackout and expiration dates.

The Palace of Versailles is open and President Emmanuel Macron is sipping espresso outside Parisian cafes, but nightclubs will remain closed even after France’s countrywide curfew ends in June. At restaurants and bars in Madrid, groups are capped at four people inside and six people outside. Germany and the Netherlands remain closed to American tourists.

“Clearly, we will not come back to ‘normal’ straight away, and travelers will have to be conscious of health measures and respect rules at the destination,” said Eduardo Santander, the executive director of the European Travel Commission, a Brussels-based nonprofit that represents the national tourism boards across the continent. “We all — destinations, businesses and guests — cannot let the guard down too soon both for our own health and for the safety of people around.”

In short, any trip to Europe this summer will come down to managing expectations.

“Save the ‘must check all the boxes’ trip to Europe for a bit later, once all new protocol kinks have smoothed out,” Ms. Gehring said. But you may still have an unforgettable experience regardless.

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Look, Just Keep Filling the Chocolate Dish

Send questions about the office, money, careers and work-life balance to workfriend@nytimes.com. Include your name and location, or a request to remain anonymous. Letters may be edited.

I am a senior leader in a large health care system. In my department’s break room, I noticed a small, empty wicker basket. I started to fill it (anonymously) with individually wrapped chocolates I buy personally, as a small morale booster. Every week or so I refill the basket. Last week I walked into the office of one of my direct reports for a brief meeting and noticed on their desk a small pile of Hershey Kisses, likely taken from the basket in the break room.

This employee is a high-performing, outstanding individual. They are also quite overweight. I said nothing of course, but now am wondering: am I contributing to this person’s weight problem, with all its attendant health risks, or am I just doing something nice for the office staff, or both? Do I continue to fill the basket with chocolates?

— Anonymous, New Hampshire

Your employee’s weight is not a problem. Your employee’s weight is none of your business. What they eat is none of your business. Your employee is a high-performing, outstanding individual, in your words. That is all that matters. Their health is not your business and you should not make assumptions about what their health is or is not. Keep filling the basket with chocolates or don’t but stop obsessing about someone else’s public body and private life. It is fatphobic and unkind and unnecessary.

I work as a contractor, freelancing on a large project I really enjoy for a project manager I love — with a co-worker who has me pulling out my hair. We are both working on the same project, for which we bill hourly. We do the same set of tasks, but my colleague works much less and bills more hours. On the list of nearly identical tasks for this project, I’ve completed 75 percent of the tasks to her 25 percent, and our project manager — who doesn’t seem to be aware of the division of labor — recently let slip that my colleague has been billing more hours than I have. I don’t think my colleague is patently dishonest or even a bad person. I think she’s very, very slow and fudges her hours.

I don’t know whether to bring this to my project manager’s attention. Normally, what another person earns is not my affair. And I don’t want to create bad feelings, especially between me and my project manager, for whom I’d like to work a lot more. But the other freelancer and I are paid out of the same pot of money. We’re actually competing for it — for time and for dollars.

My project manager is blinding herself to what’s going on because it’s easier than having to confront an often challenging person. Of course the injustice stings. But I’m not sure I should say anything, though I am the only person in a position to do so.

— Anonymous, California

Your colleague’s business is none of your business. This isn’t injustice. Injustice is … voter suppression or police brutality or any number of truly horrible things. This is frustrating and, perhaps, unfair. I hear your frustration. I do. Our co-workers often do maddening things. They seem to get away with behaviors we would never get away with or even attempt. I want you to think about why this bothers you so much. Why do you care? You don’t think your colleague is “patently dishonest or even a bad person,” right? Your colleague isn’t really taking money you would otherwise receive. She is earning money for work she performs, just like you. If you genuinely think your colleague is doing something nefarious, let your manager know and then it is up to her to handle the matter. If your colleague, however problematic in other ways, just works more slowly and differently, let it go. Or work more slowly, yourself. The only thing you can really control in this situation is you and I don’t think it serves you or your well-being to obsess over this.

In a small argument, not related to work, my husband basically told me I am worthless, that my salary (with benefits) does not make enough compared to the pension he started receiving at age 60 (he’s been unemployed for four years and he is still looking for work). How do I counter this language being thrown in my face?

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In the Market for a 529 College Savings Plan? Shop Around

The outcome could have been different, however, if the error had occurred during a downturn, said Madeline Hume, a Morningstar analyst. She advised being familiar with your plan’s performance, so you can gauge if returns seem out of the ordinary, and paying attention when your plan notifies you of changes. “It’s important to keep aware of what communications are coming out,” she said.

The firm rates 529 plans on factors like fees, investment options and plan oversight, and most are rated gold, silver or bronze, indicating they offer a net benefit to investors. However, eight plans received “negative” ratings, mostly because of excessive fees.

Here are some questions and answers about 529 saving plans:

What college expenses can 529 funds be used for?

Savings in a 529 can be used to pay college costs including tuition, room and board, mandatory fees, books, supplies and required equipment.

Can I use 529 funds to pay student loans?

Yes. Under a law passed in 2019, up to $10,000 from a 529 account can be used to repay a beneficiary’s student loans. Another $10,000 each can be used to repay student loans borrowed by the beneficiary’s siblings.

Can grandparents save in a 529 account for a grandchild?

Yes — and an upcoming change to an important financial aid form, the Free Application for Federal Student Aid, or FAFSA, should help to make that more attractive. Currently, contributions from grandparent-owned 529 plans are reported on the FAFSA as untaxed cash support to the student, which can reduce eligibility for financial aid, said the financial aid expert Mark Kantrowitz. An updated FAFSA, however, will eliminate the question about cash support, he said, so distributions from grandparent-owned 529s will no longer be included on the form. The change is expected to take place with the FAFSA available in late 2022, for the 2023-24 academic year.

The change, however, does not affect a different student aid form, the CSS Profile, which is required by many higher-cost private colleges, Mr. Kantrowitz said.

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Is It Time to Panic About Inflation? Ask These 5 Questions First.

Typically, these relative price changes are not a problem of macroeconomics — something best solved by the Federal Reserve (by raising interest rates) or Congress (by raising taxes) — but a problem of the microeconomics of those industries.

The core challenge of an economy emerging from a pandemic is that numerous industries are going through major shocks in demand and supply simultaneously. That means more big swings in relative price than usual.

Last year, relative price changes cut in both directions (prices for energy and travel-related services fell, while prices for meat and other groceries rose). But this spring, the overwhelming thrust is toward higher prices. There are fewer goods and services with falling prices to offset the rises.

Still, many of the most vivid and economically significant examples of price inflation so far, like for used cars, have unique industry dynamics at play, and therefore represent relative price changes, not economywide price rises. One important thing to watch is whether that changes — whether we start seeing uncomfortably high price increases more dispersed across the full range of goods and services.

That would be a sign that we were in a period not simply of an economy adjusting itself, but one of too much money chasing too little stuff.

Not all price changes have equal meaning for inflation. Much depends on what happens next.

If the price of something rises but then is expected to fall back to normal, it will act as a drag on inflation in the future. This often happens when there is a shortage of something caused by an unusual shock, like weather that ruins a crop. In an opposite example, in 2017 a price war brought down the price of mobile phone service, pulling down inflation. But when the price war was over, the downward pull ended.

On the other hand, a price that is expected to rise at exceptional rates year after year has considerably greater implications. Consider, for example, the multi-decade phenomenon in which health care prices rose faster than prices for most other goods, creating a persistent upward push on inflation.

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