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socrateaser, Lawyer
Category: Tax
Satisfied Customers: 39039
Experience:  Retired (mostly)
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I started working for a foreign medical school in August 2010.

Customer Question

I started working for a foreign medical school in August 2010. Prior to that I was unemployed in the US. The school is based out of Chicago where the adminstrative offices are located but I am residing in the caribbean and being paid by wire to a US bank account. I understand that I am eligible for the tax exemption of uo to $ 92,000/year. My salary is less than that. Do I have to file taxes and do I have to pay social security?
Submitted: 6 years ago.
Category: Tax
Expert:  socrateaser replied 6 years ago.
You must file your tax return, report your income and take the exemption. See this link.

You are entirely liable for Social Security and Medicare on all of the income, because the employer is located within the USA. See this link.

Hope this helps.

socrateaser and other Tax Specialists are ready to help you
Customer: replied 6 years ago.
The bylaws of the medical school are under Anguillan law and I had to obtain a foreign work permit for this job. Part of the salary is paid to a foreign bank account. You say that since some of the payment is made to a US bank, I have to file and pay SS and Medicare? I am not quite sure whether I have the option of getting paid entirely outside the country. Will this make a difference?
Expert:  socrateaser replied 6 years ago.
Maybe. If you are paid entirely from a foreign entity based in a jurisdiction with no tax treaty between it and the USA concerning FICA/Medicare, then you are not liable for Social Security or Medicare on the earnings.

To my knowledge, Anguilla has no tax treaty with the USA, therefore you would not be liable for FICA/Medicare if your payments come from an Anguillan source.

However, you may be liable for Anguillan equivalent taxes -- which could be more or less onerous than U.S taxes.

Hope this helps.