Self-employed workers in the US generally are required to file an annual return and pay an estimated quarterly tax.
Freelancers and other self-employed professionals must generally pay self-employed (SE Tax) as well as income tax. SE tax a primarily a social security and Medicare tax for individuals who work for themselves.
Medicare and Social Security for Self-Employed
The majority of people who pay into social security work for an employer- their employer deducts the amount from their paycheck. Self-employed people must independently report their earnings and pay their taxes directly to the US.
The IRS regard you as self-employed if you operate a trade, business or profession either by yourself or as a partner. Your earnings for Social Security should be reported when you file your federal income tax return.
For employed workers, 6.2% of up to $128,400 of earnings and a 1.45% Medicare tax on all earnings
For self-employed workers, 12.4% social security tax is paid on earnings up to $128,000 of net earnings and 2.9% Medicare tax on entire net earnings. The higher rate is due to the tax being taken as a combination of employer and employee tax.
For self-employed workers who have earned more than $200,000 ($250,000 as a married couple filing jointly), 0.9% more tax must be paid in Medicare.
Determining if you are subject to Self employed and income tax
Before you can determine if you are subject to self-employment tax and income tax you must figure your net profit or net loss from your business. This can be done by subtracting your business expenses from your business income; if your expenses are less than your income the difference is judged as a net profit and should be included on page 1 of form 1040. If your expenses are more than your income, the difference is judged as a net loss, and should deducted from your gross income on page 1 of your 1040 return.
As a US citizen you have many tax obligations, such as reporting all foreign income and filing a federal tax return. We are regularly contacted by US expatriates based across the globe that are considering renouncing their citizenship. When you renounce your citizenship you are no longer expected to declare your worldwide income to the IRS. However, there are a number of reasons why renouncing your citizenship is not always the best decision as a US expatriate.
The MET Gala, formally call the Costume Institute Gala, is an annual fundraising event for the benefit of the Metropolitan Museum of Art’s Costume Institute in New York City. The proceeds of the event are mostly used to fund the museums exhibitions, acquisitions and capital movements.
The US expat community had huge press coverage last week; over 300 accidental Americans residing in France have filed a class act again banks that uphold the FATCA, citing discrimination. The act has been triggered by the accidental Americans difficulty receiving loans and opening bank accounts, due to FATCA.
A Foreign Bank Account Report (FBAR) is a form that must be filed with the Financial Crimes Enforcement Network (FinCEN) In order to report foreign financial accounts.
If you have made energy saving alterations to your home during 2017, you are able to claim costs of the alterations on a Form 5695.
As an American living abroad it is essential that you stay in like with your US tax obligations in order to avoid unnecessary penalties and stress. This article offers a guide on what documents American Expats need in order to file their US expat tax returns. These documents are not only necessary to finalize your US expat tax return, but also to protect yourself in the event of an Audit from the IRS.
As a American living in the UK it is normal and expected to become homesick from time-to-time. While the Americans and English have many similarities in terms of lifestyle and interests, there are always going to be some differences that are likely to make any American feel slightly homesick.
Britain may well have one of the best tea selections in the work, however many Americans wake up craving nothing but an an omelet and a hot cup of filtered coffee.
Below we have put together a guide on London’s top spots for any homesick American living in the London:
Under the Tax Relief and Job Creation Act of 2010, the energy efficient appliance credit was modified and extended. This means that tax credit can be claimed for each type of qualified energy efficient appliance produced by the taxpayer during the 2011 calendar year ending with or within the taxpayer’s taxable year.
As an SME in the Creative Industry in the United States, they are eligible to certain tax reliefs. Like all SME’s in the US, an enterprise is eligible to a tax deduction for qualifying charitable donations.
As a US accountant to creative industry professionals, we understand that travel and varying bases is a huge factor of many creative industry jobs. Whether you’re an actor who has had to move to the other end of the country for a production contract, or a musician that is touring the US, we are expert in your tax matters.
On May 25th 2018, the IRS announced several changes in the Tax Cuts and Jobs act that affect moving, mileage and travel expenses.