Hi everyone,
I have a complex residency and self-employment tax situation for this 2026 tax year and would appreciate some guidance on which forms to use.
My Situation:
Income: $70,200/year as a 1099-NEC Independent Contractor. Paid via ACH, no tax withheld.
Physical Location: I am currently living in Brazil and plan on staying and visiting other countries
Residency: My current "address of record" for my bank and employer is a friend's house in Wisconsin. However, I have no lease, no utility bills, and no property in Wisconsin. I used my U.S. Passport to open my accounts. The only thing I did was the provisionary drivers license.
Goal: I want to legally establish residency in a no-tax state (Florida) to avoid Wisconsin state income tax while I am living abroad. Not sure if its necessary and would like some insight on it.
My Questions:
Breaking Residency: Since I have no financial ties (lease/bills) to Wisconsin, what is the best way to "break" domicile with WI while living abroad? If I change my address with my employer/bank to a Florida mail-forwarding service, is that sufficient for the WI Department of Revenue to consider me a non-resident?
FEIE & Self-Employment Tax: I understand that if I qualify for the FEIE (Form 2555), I can exclude my income from Federal Income Tax. However, since I am a 1099 contractor, do I still owe the full 15.3% Self-Employment tax (Social Security/Medicare)? Are there any deductions available to reduce the SE tax base while living abroad?
State Tax & FEIE: Does Wisconsin (or most states) recognize the Federal FEIE, or would they try to tax the full gross income if I cannot prove I've broken residency?
Quarterly Payments: Since I have no withholding, should I be filing 1040-ES estimated payments based on the SE tax alone, or the full tax amount including income tax (before the FEIE is applied at year-end)?
Thank you for the help!
