Tax Law (Questions About Taxes)/Sole proprietor

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Question
Can a US CITIZEN who is SOLE PROPRIETOR of a FOREIGN COMPANY be an  employee of his own company.....thus pay no SE tax?

Answer
Dear Pat,

You are mixing two contradicting concepts: Sole proprietor and foreign company. Sole proprietor is unrelated to any company.

If you are a shareholder (perhaps a single shareholder) in a foreign company you can avoid paying SECA taxes if company is incorporated in the country that has Social Security Totalization Agreement  with USA. See http://www.taxesforexpats.com/expat-tax-advice/us-social-security-agreements.htm for details.

Please be aware that shareholders of the foreign company have additional complex tax compliance requirements. Please see  http://www.taxesforexpats.com/services/form-5471-preparation.html.

Hope this helps
I.J.Zemelman

Tax Law (Questions About Taxes)

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IJ Zemelman, EA MBA

Expertise

I am an IRS-authorized EA and principal of a Tax Preparation firm focusing on U.S. Expatriates. We specialize in all tax issues faced by American citizens living abroad - such as foreign earned income, tax treaties, foreign spouse, etc. Visit our website - www.TaxesForExpats.com - for more information.

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18 years professional tax experience, 12 with expatriate taxes.

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Expatriate tax information on www.TaxesForExpats.com

Education/Credentials
MBA from Zicklin School Of Business, IRS Enrolled Agent

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