reporting self employment income when living abroad

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ketanco
Posts: 130
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reporting self employment income when living abroad

Post by ketanco » Tue Mar 12, 2019 4:21 pm

Do we still use schedule C to report self employment income (as a sole proprietor), when we live abroad (as a US citizen)?
I looked at the Schedule C pdf directly given by IRS on internet, and there the address format is like a US address format, and there is no place for foreign country name. But it is ok and we just leave it blank because on first page of tax return there will be my foreign address anyway?

So bottom line is, we do everything by filling schedule C as if we were in the US, and NOT by filling a form for foreign earned income from an employer etc... right? so there is no other special form for reporting income as sole proprietor when living abroad correct? or is there schedule C, but also another form in addition?

and then IF we choose, we can either deduct foreign taxes paid, or, claim foreign earned income exclusion, or don't need to claim any of it, if we are overall below $10000 for the year... correct?
Last edited by ketanco on Tue Mar 12, 2019 4:25 pm, edited 1 time in total.

livesoft
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Re: reporting self employment income when living abroad

Post by livesoft » Tue Mar 12, 2019 4:24 pm

When I had self-employed income as a resident of a foreign country, I filed a Schedule C. I also did the Foreign Income exclusion with Form 2555.
IRS.gov wrote:Self-employment income: A qualifying individual may claim the foreign earned income exclusion on foreign earned self-employment income. The excluded amount will reduce the individual’s regular income tax, but will not reduce the individual’s self-employment tax. Also, the foreign housing deduction – instead of a foreign housing exclusion – may be claimed.
Last edited by livesoft on Tue Mar 12, 2019 4:33 pm, edited 1 time in total.
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ivk5
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Re: reporting self employment income when living abroad

Post by ivk5 » Tue Mar 12, 2019 4:32 pm

https://www.irs.gov/individuals/international-taxpayers/self-employment-tax-for-businesses-abroad wrote: If you are a self-employed U.S. citizen or resident, the rules for paying self-employment tax are generally the same whether you are living in the United States or abroad.
You may want to pay attention to the instructions there re SS certificate of coverage (if your country of residence has a bilateral US SS totalization agreement) so that you are not double-paying on that.

Topic Author
ketanco
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Re: reporting self employment income when living abroad

Post by ketanco » Wed Mar 13, 2019 6:41 am

Ok so, just schedule c + foreign earned income exclusion
Or
Schedule c + credit on foreign tax paid
Or
Sxhedule c only , if my year total is below $12000

And nothing else (no other forms etc..) correct ?

And since my residence country doesn't have totalization agreement with US, i will pay SE to US (and whatever i am paying to my residence country), without doing anything special (obtaining certificates etc), as if i am in the US correct? But the good side will be, when i retire i will get social security benefits from both countries (i am dual citizen), right?

ivk5
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Re: reporting self employment income when living abroad

Post by ivk5 » Wed Mar 13, 2019 6:54 am

ketanco wrote:
Wed Mar 13, 2019 6:41 am
And nothing else (no other forms etc..) correct ?
Make sure you're familiar with requirements of Form 8938 and FinCEN Form 114 / Report of Foreign Bank and Financial Accounts (FBAR). Simple to comply, potentially painful if you don't.

Topic Author
ketanco
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Re: reporting self employment income when living abroad

Post by ketanco » Wed Mar 13, 2019 2:19 pm

livesoft wrote:
Tue Mar 12, 2019 4:24 pm
When I had self-employed income as a resident of a foreign country, I filed a Schedule C. I also did the Foreign Income exclusion with Form 2555.
IRS.gov wrote:Self-employment income: A qualifying individual may claim the foreign earned income exclusion on foreign earned self-employment income. The excluded amount will reduce the individual’s regular income tax, but will not reduce the individual’s self-employment tax. Also, the foreign housing deduction – instead of a foreign housing exclusion – may be claimed.
when you did that schedule C, you left the address field was blank right? because schedule C address format is in US address format, (there is no place to enter a foreign country name there) but on first page of your tax return you show your foreign address anyway right, and that is enough right?

livesoft
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Re: reporting self employment income when living abroad

Post by livesoft » Wed Mar 13, 2019 2:26 pm

Sorry, cannot remember. I had certainly established residency in a foreign country and did not have a US address at all. So my address on the first page of Form 1040 was my foreign address.

And Schedule C does have a place for your address, so I don't see why it could not be a foreign address. I don't see why you state there is no place to enter your foreign address. There is plenty of space there.

Schedule C-EZ has "Address not required if same as on page 1 of your tax return."

I just wouldn't worry about it. May I ask why you are worried about it?
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Topic Author
ketanco
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Re: reporting self employment income when living abroad

Post by ketanco » Wed Mar 13, 2019 2:40 pm

ok all is fine then....

i didnt say there is no place for address on schedule C, i said the address on schedule C is in US address format, and no place for a foreign country name there. so if you still can enter a foreign address there (despite that format there), or can just leave it blank (since they have your foreign addres from first page), then it is ok. I was just trying to make sure everything is ok, and also i wanted to make sure that schedule C applies to people live in foreign countries too, even if the address format on it is in US address format and no place for foreign country ... and since you are saying you already did it before that is ok too then....

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