Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:
- quote -

Not so rhetorical in actuality, Harlan. I come up against
this quite frequently. In fact, I raised this question with
regard to my own contributions to social security when I
moved to Thailand.

There are too many variables to this equation for me to make
an absolute declaration. However, I believe that, for most
taxpayers, this would not be advisable.

In my specific case, I actually went to the Social Security
people and we worked out the numbers. Had I reported and
paid the tax on my salary here, my benefits would have
increased by a few dollars a month. But, the increased
benefit would have taken 15 years(!) to repay the tax for
just one year!

When I did my analysis, I was within 1 year of being able to
draw benefits without reducing them by working. I suspect,
but admit I have never tried to prove, that the younger a
person is, the longer it would take for any increase in
benefits to recoup the tax paid.

Personally, I believe that anyone who is in such a position
(and there are a large number of expats who are) is better
off just putting money aside for retirement. Once you have
the necessary 40 credits, voluntary contributions to social
security are probably not a good investment.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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L K Williams wrote:
- quote -

Thanks for the replies. I've also understood the FICA issue
as you do. In this case, the employer really is abroad, so
there's no question that employment contract was entered
into outside the US.

Oh well.

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L K Williams wrote:
- quote -

Ah, thanks for that information. I don't get any clientele
like you get. (To an Alabama taxpayer, "foreign" means
casino winnings from over there in Mississippi! (grin)

Anyway, back to OP for a moment. It appears that only a
part of his income must be from a foreign source and that
majority of it in good old US of A, and that withholding is
more than enough to take care of total tax for the year.
Good.

I was however thinking off on a tangent for a moment.
Suppose someone had all income paid from a foreign source;
no withholding, certainly no FICA, and he's filing a US
1040. Why not report everything on a schedule c and
therefore se to continue to build up social security
credits? (rhetorical question of course.)

ChEAr$,
Harlan Lunsford, EA n LA

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Harlan Lunsford

- quote -

He doesn't need a treaty. If someone works for a foreign
employer, in a foreign country, his wages are not subject to
FICA taxes. Technically, the employment contract must be
entered into outside the US for this to be true but I've
never seen that enforced. Frankly, I don't know how it
could be enforced.

There are treaties with some countries, generally European,
that exempt US employees of US companies from FICA -- it
they are covered by the foreign countries equivalent to
social security.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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davidrosenbaum[at]gmail.com wrote:

- quote -

That's always (since I can remember back to 1989 at least)
been the requirement. Wages must be shown on line 7 and
information from the W2 entered. So if company has no FEIN,
no can do. Which of course means they're not taking out
FICA tax, right? Is there some treaty which exempts your
client from FICA?

ChEAr$,
Harlan Lunsford, EA n LA

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avidrosenbaum[at]gmail.com wrote:

- quote -

This why I have not signed up to efile for my clients.
Foreign employers do not file W-2s for empolyees working in
a foreign country. Using an accomodation address is not
uncommon for foreign residents but there is nothing to
attach to a return for foreign salaries and wages.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Similar subjects have been discussed, but not this exact one,
so here goes:

I have a client who wants to e-file (to get his refund
quicker), but he has income from wages from a foreign
corporation, which has no EIN or US address. The program
I'm using says I can't do it because of that. (I also need
to use a US address for his return, though he lives abroad,
but we can do that by using his brother's address).

Any ideas?

David Rosenbaum

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