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Dodge222
Returning Member

Self-employment tax confusion (QBI and other question)

I have contracting income from a company register outside of the USA.  I do work for them in US and I receive monthly income via bank wiring. Essentially, I am no difference from employee, and I do not involve in company operation. I know the income is self-employment but I am not sure how to answer these tax questions:

 

1. Actively participated in this work

Should I answer Yes? The example in the description seems to assume I have employee, but I am just working for someone else.

2.How much of your X work took place within the United States? (QBI)

I do all my job in USA. The description seems to assume I own the business, but again I only work for the company not owning them. How should I answer this? This is the serious one since it effect  how much I have to pay.

 

Here is the description:

"If your business sells products or provides services in the United States, the profits (or losses) from this business are generally US-based. This includes goods or services you provided in another country as long as you didn’t have a base of operations there"

 

EDIT: My work involve helping designing the product, but not actually providing service in US 

 

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2 Replies
ThomasM125
Expert Alumni

Self-employment tax confusion (QBI and other question)

You do actively participate since you are doing work. All of your work would take place in the United States since that is where you work. The work you do has nothing to do with the company's business location or activities, it has to do with what you are doing and where you are doing it. You are performing services in the United States so you are actively involved in your business in the United States.

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rjs
Level 15
Level 15

Self-employment tax confusion (QBI and other question)

When you are self-employed, you are your own business. You are not working for someone else, you are working for yourself. You are the business. The foreign company that is paying you is not your employer or your business, it's your customer. It's a customer of your own self-employment business.


Your business operates in the United States, and since you do all the work, you are actively participating in your business.

 

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