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Posted by Bruce E. Cobern on April 23, 2006, 3:13 am
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> What am I missing here - what do I need to research/file to
> avoid double payment of soc. sec. stuff when I have
> self-employment income??
I know this is probably too late to help before you file
your 2005 return, but you can always amend or take this into
consideration for 2006.
The US has bilateral social security treaties with about 20
or so other countries designed to avoid this problem. The
treaties provide that social taxes are paid in only one
country, and which country depends on a number of factors.
Typically, for self employed individuals, the taxes are paid
only in the country of RESIDENCE, so you would not be liable
for self-employment tax.
What is typically required is that you obtain a "certificate
of coverage" from you home country indicating that you are
covered by their social security system. I believe the
instructions are to attach a copy of that certificate to
your return each year, but we generally just note the
effective date of that certificate in a footnote to the tax
return.
You didn't say what country you live in, so I can't tell
whether there is a treaty, but the text of each the treaties,
as well as a pamphlet explaining them in plain English, can be
found at www.ssa.gov/international, or more specifically at
http://www.ssa.gov/international/agreement_descriptions.html.
If you are not in a treaty country then you end up paying
social taxes in both countries.
--
Bruce E. Cobern, CPA
mailto:bec@pipeline.com
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