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nikki_lalalalala
New Member

Does US-China income tax treaty article 20(c) apply to self employment tax?

I got a 1099-Misc from my employer, which means I was considered as a self-employed contractor instead of their employee. I am a international student from China, and in article 20(c) US-China income tax treaty, it looks like I can claim it no matter whether I'm a employee or self-employed. 

So, I followed the instruction online and entered (-5000) under Fedural Taxed/Less Common Income/Miscellaneous Income 1099A, 1099C/Other Reportable Income. However that did not change the amount of tax due at all. It's because my gross receipt didn't change and therefore the self employment tax didn't change either. 

Should I just deduct this $5000 from my gross receipt? Like, if my actual income was $8000, should I just say my gross receipt was $3000? Or should I enter this -$5000 as something else? 

2 Replies
KarenW
New Member

Does US-China income tax treaty article 20(c) apply to self employment tax?

The $5,000 is exempt from tax. It is not clear if it is exempt from self-employment tax.  If you are a student and will return to China you may never qualify for Social Security benefits. You should report the Gross amount on the 1099-Misc as your income and deduct the $5,000 as Misc expenses and use 'Article 20(c) US-China income tax treaty' as the description. 

4theluvofgod
Returning Member

Does US-China income tax treaty article 20(c) apply to self employment tax?

Hello! I'm facing the same issue. How did you solve it? @nikki_lalalalala 

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