pk
Level 15
Level 15

Deductions & credits

@arj1y36 , from looking at the current  post ( and responses by @Critter-3  and @rjs   thereto ) and looking at some of the  referred earlier posts by you, I am not sure  that I understand the situation clearly ( may be it is just my small and inefficient brain ) and so I  list below  what I see here :

(a) You , a US person ( citizen/Green Card ? resident for tax purposes ), have  foreign source income.

(b) you are employee of the foreign source payor .

(b) there is no W-2 or  similar information return shared with the IRS / State.

 

Assuming that you are  residing in a  foreign country, i.e. your tax home is abroad, your income  would be considered as self-employment  and reported as such  for US tax purposes ( reported on Schedule-C ).  Note that this assumes that while there  may be a tax treaty between US and that country  there is no Social Security ( Totalization ) agreement in place.  It also assumes that the employer that you are working  ( foreign) for  has no US presence. i.e.  does not pay any part of your salary in the USA , under US tax laws.

The  reason for the above is because as an US person  you are taxed on your world income  and also subject  to Social Security / Medicare taxes  on that income.

Also note that in such a case ( assuming that the above assumptions are valid ), your foreign income is eligible for  Foreign earned income exclusion  and/or foreign tax credit.  So it is not all bad.

 

On the other hand , if your tax home is in the USA, then while the foreign income is considered  self-employed ( schedule-C reporting ) the source of the income is considered US ( because the work is done in the USA ) and  can only be taxed by the USA.

 

Does this make sense?