How do I pay Social Security on foreign earned income based on the totalization agreement US Italy

[DaveF1006]

To clarify, what is it that are asking?  $3800 is the correct amount of SE for your Self-Employment income, which is independent from your foreign income. Your self-employment income is calculated at ($26,900)(.9235)(.153)=$3800, which is correct. 

I am not sure what are asking regarding your foreign wages earned through the Italian Employer. I think you may be asking these these wages are subject to SE FICA taxes.  If you are, the IRS states that these wages are not subject to Social Security and Medicare tax withholding, thus no SE taxes are levied on this income.  

Reach out if you have additional questions or if I misinterpreted your question.

@2382680 

[2382680]

@DaveF1006 I appreciate the additional round of input, but as I have heard from @jtax in the earlier posts in this thread there should be a way to contribute Social Security and Medicare taxes on my otherwise exempt Foreign Earned Income, precisely because I am required, through the Totalization Agreement between US-Italy, to pay them in the US as opposed to in Italy. It is an unusual situation, I know, but I am determined to sort it out so that I am not dodging this tax in both countries. I pay income tax at the prescribed rate in Italy, only on my Italy-earned income as a freelance educator (ie, a self-employed US person without a permanent work contract). But I have found a way NOT to pay into the Italian Social Security system, as they are discreet agencies here.

Still confounded.

[DaveF1006 · Accepted solution]

Technically you could be considered a self-employed person and according the the totalization agreement you would pay these FICA taxes in the US.

Now to report FICA taxes that you wish to pay, here is how to report although it may not seem easy.  You will need to report this first as Self-Employed income by going to federal>wages and income>self-employment>self employment income. Once here, you will handle generic questions about your business (which isn't a business). 

1. In the first box, just briefly explain what your work was.
2. When you get to the page where it asks, how this work fits into the main picture, mention it is your main source of income.
3. For the next few screens, answer these questions no and that income is not subject to the Dept of Transportation. Once you are out of the profile page, it will mention Let's enter the income for your ss work. Here check Other self-employed income, includes cash and checks. Once entered, press continue at the bottom of the page. Don't attempt to enter any expenses as these will not apply in this reporting.
4. Under type of income, put in foreign income earned subject to FICA taxes and then the amount of income you earned in italy.

Now since this income is already reported and you paid federal tax from it, you will need to exclude the income already claimed for federal income tax purposes so the FICA taxes will only be assessed.  Here is how to do it.

1. Go to Wages & Income
2. Scroll all the way down to Less Common Income
3. Select Miscellaneous Income, 1099-A, 1099-C from the drop-down
4. Select Other reportable income
5. Any Other Taxable Income? = Yes
6. Description = Excluded income reported elsewhere in my eturn
7. Now enter the amount you reported in the steps above with a minus sign in front of the income amount reported as money earned. This is will exclude this income from being taxed twice. Remember you are reporting this only for FICA purposes.

@2382680