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Need overseas income pay selfemployment tax?

HI,

 

I worked for a Chinese company but stayed in the U.S. The company is based in China and paid me a salary and taxes, and provided a full-time employment contract, but did not give me a W-2 form. How do I report my income? If I report it as W-2 income, the software requires a W-2 number, which I don't have. If I report it as self-employment income, I would need to pay taxes again, since the income has already been taxed in China.

 

I also have some earnings from the Chinese Stock Market, How do I report them? Still as Self-employment incoming?

 

thanks

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1 Best answer

Accepted Solutions
DaveF1006
Expert Alumni

Need overseas income pay selfemployment tax?

Yes, you would report this as other income. First question is, are you a US resident alien, citizen and/or a student?  Here is how to report if you are a US Resident Alien or citizen. 

 

  1. Go to federal>income and expenses>all income 
  2. Less Common Income> Start
  3. Miscellaneous Income,>start
  4. Other reportable income>start
  5. Next screen asks Any Other Taxable Income>yes
  6. The next screen will allow you to report the income with a brief explanation. in this case, you would enter the Chinese Income.

If you are a US student and a resident alien, you may exclude up to $5000 of this income under the US/China treaty arrangement.  Also you may claim a foreign tax credit for the taxes paid to the Chinese government. Keep in mind, The foreign tax credit is limited to the amount of China tax that would otherwise be payable on that income. 

 

To claim the Foreign Tax credit:

 

  1. Open (continue) your return in TurboTax
  2. Make sure you've already entered all your foreign income. If you still need to enter it, do that now
  3. Select Search and search for foreign tax credit. Select the Jump to link in the search results
  4. When you reach the screen Do You Want the Deduction or the Credit? select the option you prefer for your situation
  5. If you select Take a Credit:
    • Select Continue on the next screen, then select No to fill out Form 1116
    • When you reach the screen Country Summary, select Add a Country
    • Answer the questions about your foreign income, taxes, and expenses on the following screens
    • When finished, you'll be taken back to the Country Summary screen. If you have income from other countries to enter, select Add a Country. Otherwise, select Done
    • Answer the questions on the following screens until you reach your Foreign Tax Credit Summary. If you’re finished with this section, select Done

To enter your investment stock market income:

 

  1. Go to federal>wages and income>investment income>stocks, bonds, other
  2. Now you will answer some preliminary questions.  Say no if you did not receive a 1099B.
  3.  Next screen is critical because it asks you for the sale price, description, what you originally paid for it, date sold, date acquired etc.
  4. Now you will be asked a question if this was a sale of employee stock, here you will say no.

 

Let me know if this helps.

 

 

 

 

 

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

View solution in original post

4 Replies
DaveF1006
Expert Alumni

Need overseas income pay selfemployment tax?

Yes, you would report this as other income. First question is, are you a US resident alien, citizen and/or a student?  Here is how to report if you are a US Resident Alien or citizen. 

 

  1. Go to federal>income and expenses>all income 
  2. Less Common Income> Start
  3. Miscellaneous Income,>start
  4. Other reportable income>start
  5. Next screen asks Any Other Taxable Income>yes
  6. The next screen will allow you to report the income with a brief explanation. in this case, you would enter the Chinese Income.

If you are a US student and a resident alien, you may exclude up to $5000 of this income under the US/China treaty arrangement.  Also you may claim a foreign tax credit for the taxes paid to the Chinese government. Keep in mind, The foreign tax credit is limited to the amount of China tax that would otherwise be payable on that income. 

 

To claim the Foreign Tax credit:

 

  1. Open (continue) your return in TurboTax
  2. Make sure you've already entered all your foreign income. If you still need to enter it, do that now
  3. Select Search and search for foreign tax credit. Select the Jump to link in the search results
  4. When you reach the screen Do You Want the Deduction or the Credit? select the option you prefer for your situation
  5. If you select Take a Credit:
    • Select Continue on the next screen, then select No to fill out Form 1116
    • When you reach the screen Country Summary, select Add a Country
    • Answer the questions about your foreign income, taxes, and expenses on the following screens
    • When finished, you'll be taken back to the Country Summary screen. If you have income from other countries to enter, select Add a Country. Otherwise, select Done
    • Answer the questions on the following screens until you reach your Foreign Tax Credit Summary. If you’re finished with this section, select Done

To enter your investment stock market income:

 

  1. Go to federal>wages and income>investment income>stocks, bonds, other
  2. Now you will answer some preliminary questions.  Say no if you did not receive a 1099B.
  3.  Next screen is critical because it asks you for the sale price, description, what you originally paid for it, date sold, date acquired etc.
  4. Now you will be asked a question if this was a sale of employee stock, here you will say no.

 

Let me know if this helps.

 

 

 

 

 

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

Need overseas income pay selfemployment tax?

Thank you so much!!

Need overseas income pay selfemployment tax?

I have tried and after that the China salary to the 1099-misc, which is self-employment incoming, and need to pay self-employment tax.  I do not think that is right since it is not self-employment and I do not think I  should pay Self-employment tax. 

MarilynG1
Expert Alumni

Need overseas income pay selfemployment tax?

You are not reporting your Chinese income as 1099-Misc income for self-employment; you are reporting as 'Other Reportable Income' with a description and amount.

 

You may have entered it in the wrong place.  On the Income topics page, scroll all the way down to 'Miscellaneous Income, 1099-A, 1099-C'.

 

On the next screen, scroll all the way down to 'Other Reportable Income'.

 

@houstontian 

 

 

 

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