Here is the full context from the IRS web site and why O asked the question: "U.S. citizens working in the U.S. must pay self-employment tax because the foreign government or organization is not liable for the employer’s portion of the contribution to the U.S. system. However, you are not “self-employed” for any other federal tax purposes. You may not claim deductions for expenses on Schedule C and are not qualified to establish a Simplified Employee Pension (SEP) Plan and there is no allowable deduction on line 28 of Form 1040 for contributions to any such plan. Rules of contributing to SEP/IRA plans are explained in IRS Publication 60. and Revenue Ruling 73-384 for additional information.
You may also claim deductions for unreimbursed employee business expenses arising from your employment on Form 2106, Employee Business Expenses. The deduction is claimed on line 21 of Schedule A, Itemized Deductions, on the Form 1040. These expenses are miscellaneous itemized deductions subject to the 2 percent of adjusted gross income limitation."
