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I am employed by a foreign employee, but live in the US. My…

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I am employed by...

I am employed by a foreign employee, but live in the US. My employer does not have a legal US presence. My employer has no US clients and all of my work of performed abroad. Foreign employer does not do Us.

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Sorry, my message got cut off. The foreign employer does not do US payroll and nor do I pay taxes to foreign countries, or maintain a residence in a foreign country. I don't meet the FEIE rules and was in the US too long to qualified for foreign residence status. How do I properly pay FICA through my tax return? Would it be wrong if I just filed as self employed, but with no expenses or deductions? That way the IRS and state would still get equal pay (would cost me more though).

Submitted: 7 months ago.Category: Tax
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9/30/2017
Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,651
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
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Hello. Thank you for choosing this Q&A service for assistance. My name is Angela. I will be assisting you.

Q: How do I properly pay FICA through my tax return? Would it be wrong if I just filed as self employed, but with no expenses or deductions?

A: It sounds as if you considered to be self employed. I write this because you stated that no taxes are being paid to the foreign country. As a self employed person, you can report the income earned abroad and pay self employment tax (FICA) on that income. As a self employed person, you are allowed to deduct unreimbursed expenses associated with your trade. On the other hand, if you are actually an employee of this foreign company, the following applies;

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U.S. Citizens, Resident Aliens, and Nonresident Aliens employed outside the United States by a foreign employer are not generally subject to Social Security and Medicare tax withholding. Therefore you are not required to pay FICA on your tax return for the income that was not subject to withholding.

REFERENCE SOURCE:

https://www.irs.gov/individuals/international-taxpayers/persons-employed-by-a-foreign-employer

Voluntary payments of FICA are not allowed.

Filing as self-employed, you would use the Form Schedule C.

Link to Form Schedule C:

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

If the above information clarifies matters for you, I ask that you please take the time to scroll to the top of the page and select 3 or more stars to positively rate my response so that I can receive credit for assisting you. A 5 star rating is greatly appreciated. Thank you in advance.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

I see that you have asked a duplicate question. If you are considered an employee of the foreign employer, you file the Form 1040 and report your wages on Line 7 of the Form 1040.

However, if you are considered self-employed, as I think you are, you will also complete the Form Schedule C, along with the Form 1040. This way you are reporting FICA taxes.

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