NateTheGrEAt
Employee Tax Expert

Get your taxes done using TurboTax

To add to the other excellent answer you received, as a freelancer / self-employed individual, you need to pay self-employment tax based on the net profit on your Schedule C.  Self-employment tax is like the self-employed person's version of Social Security and Medicare tax that is paid by employees. This tax cannot be avoided using the Foreign Earned Income Exclusion or the foreign tax credit. That means, for example, that even if all of your earned income is excluded under the FEIE and you have no income tax liability, you could still owe a tax bill because of the self-employment tax. Many freelancers overseas are not aware of this and are surprised to find their tax return doesn't show a $0 balance due. 

 

The only way to potentially not be liable for self-employment tax while self-employed overseas is to be working in a country with a totalization agreement with Social Security and to participate in that country's social security system. In essence, that means you would be able to opt in to paying into the resident country's social insurance in lieu of paying into US Social Security. However, Argentina is not one of the countries where the US has a totalization agreement. You can find the entire list here:

https://www.ssa.gov/international/agreements_overview.html

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"