Earning money from overseas

[a111087kawaii]

I am a green card holder that lives in the US and a citizen of Kazakhstan, which has agreement with US for avoidance of double taxation. I live in the US, but my job is remote in Kazakhstan.

I do not see an option in turbo tax to enter foreign income. I saw posts from 2019 that advise to search for 'foreign income', but that seems to be no longer working. How can I report this income without getting double taxed (already paid taxes in Kazakhstan). I am also filing jointly, if that makes any difference.

[DaveF1006 · Accepted solution]

You will enter this income as other income and then claim a foreign tax credit for the tax paid in Kazakhstan. here is the procedure.

1. Log into your account
2. Select Wages and income
3. Less Common income
4. Miscellaneous Income, 1099-A, 1099>start
5. Scroll to the bottom of the page to Other Reportable Income
6. Other taxable income, answer yes
7. Then give a brief description of the income and the amount listed.

To claim the Foreign Tax Credit.

1.  Go to Federal
2. Deductions and credits 
3. Estimate and other taxes paid 
4. Foreign Tax Credit>start or revisit
5.  As you go through the screens, when it asks "Tell Us About Your Foreign Taxes" select none of these apply.
6. When it asks if you wish to take the deduction and credit, take the credit.
7. Continue through until you reach a screen that says "No other income or expenses" Say no
8. Continue through until it asks the income type, say General category income
9. Next add a country pick Kazakhstan
10. Continue until for enter the gross amount of the income and the foreign tax paid.

[OrionSeeker]

If they had a green card and worked from the US that would make them a tax resident of the US right? How can they claim any Foreign Tax Credit if they were physically in the US. My understanding is that they would have to file all taxes in the US and claim a tax credit from the foreign country which has incorrectly withheld taxes, in this case Kazakhstan?

Also they would have to pay Social Security and Medicare taxes unless there is a agreement between the two countries?

[DaveF1006]

Yes, you are correct. You would need to file all taxes in the US and then claim a foreign tax credit from Kazakhstan. They would not be able to claim a foreign-tax credit because this is US-Sourced income. 

Since,  the United States does not have a Totalization Agreement with Kazakhstan, they will need to pay Social Security and Medicare taxes.