nhu6086, I had a similar situation with my permanent resident spouse who worked in a consulate for many years, and I share your concern over losing the green card. When you read the IRS rules about working for foreign embassies/consulates, be aware of the context - is the section you're reading dealing with DIPLOMATS (or other workers assigned by their government/foreign service) or is it dealing with LOCAL STAFF? Diplomats and assigned workers usually have special diplomatic visas. On the other hand, my spouse obtained her green card after petitioning as my spouse, and some years later applied for the consulate job as LOCAL STAFF. Also note that the consulate never deducted any foreign tax or foreign social security from my spouse's pay, which is another indicator that she did not have DIPLOMAT status.
Note that LOCAL STAFF can be US citizens or green card holders.
US citizen LOCAL STAFF pay estimated taxes every quarter, including Income tax and Self Employment tax.
Green card holder LOCAL STAFF pay estimated taxes, but only on the income tax.
Both US citizen and green card holder LOCAL STAFF have to file Form 4852 Substitute W-2.
Based on my experience, it can be tricky for the green card holder to convince TurboTax software to calculate only Income tax without adding the Self Employment tax.
I'm not an expert, and I don't know the details of your spouse's situation (I think some green card holders may have different rules, depending on the country), so don't take my word for it. I'm just offering another point of view from personal experience, and I fear the threat to maintaining Immigration status over the chance to save paying some taxes due to possibly mis-interpreting the applicability of a tax treaty to my spouse's circumstances.
Good luck with filing your taxes 🙂 !
