Here is an obscure and interesting exception from paying US social security taxes for certain "self employed" people:
- mo4644
- Jan 31
- 1 min read
Here is an obscure and interesting exception from paying US social security taxes:
In certain cases, you may be considered self employed in your country of residence, but considered employed in the eyes of the IRS.
For instance, in Israel many doctors, physical therapists and others in medical professions are considered by the Israeli tax authorities to be self employed independent contractors.
On the surface, a US citizen in this situation may owe a lot of US self employment taxes, unless they work through a foreign corporation.
In the previous example, the person normally only works for one employer, in set places and times. There are also other factors which point to an employer-employee relationship, in the eyes of the IRS.
According to IRS guidelines, called "The 20 factor test", they would be considered employed.
The result is that instead of owing a lot of taxes, they could be getting a nice refund if they can utilize the child tax credit.
Don't assume anything until you consult a tax advisor! It would be a shame to misclassify and pay these taxes needlessly.
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