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Taxable Income For Employee Of A Foreign Country In The US

I work for a foreign consulate in the USA. I do not receive a W2 and no taxes are withheld and no income is reported. In addition to my monthly base pay, the consulate includes a monthly payment equal to one half of the normal FICA taxes. When I file my taxes I pay self employment taxes as if I were an independent contractor. For my taxable income I have been claiming both my normal monthly base pay plus the monthly payment equal to one half of the FICA taxes. 
 
Should my taxable income be considered only my base monthly pay, or should I also include the monthly 1/2 FICA payment from my employer? Maybe I am overstating my taxable income?
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Taxable Income For Employee Of A Foreign Country In The US

The payment the consulate makes to you for 1/2 of your self-employment tax is income and needs to be reported as such.

 

According to the IRS:

If you are a U.S. citizen working in the United States for a foreign government or international organization, you must report this compensation as wages on Form 1040 and pay self-employment tax on the compensation under the Self-Employment Contributions Act (SECA). Self-employment tax is computed on Schedule SE, Self-Employment Tax, and is also reported on Form 1040. Although you are subject to self-employment tax on this employee compensation, you are not "self-employed" for any other federal tax purposes. You may not claim deductions for expenses on Schedule C and are not qualified to establish a Simplified Employee Pension (SEP) Plan and there is no allowable deduction for contributions to any such plan.

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Expert Alumni

Taxable Income For Employee Of A Foreign Country In The US

The payment the consulate makes to you for 1/2 of your self-employment tax is income and needs to be reported as such.

 

According to the IRS:

If you are a U.S. citizen working in the United States for a foreign government or international organization, you must report this compensation as wages on Form 1040 and pay self-employment tax on the compensation under the Self-Employment Contributions Act (SECA). Self-employment tax is computed on Schedule SE, Self-Employment Tax, and is also reported on Form 1040. Although you are subject to self-employment tax on this employee compensation, you are not "self-employed" for any other federal tax purposes. You may not claim deductions for expenses on Schedule C and are not qualified to establish a Simplified Employee Pension (SEP) Plan and there is no allowable deduction for contributions to any such plan.

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

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Level 2

Taxable Income For Employee Of A Foreign Country In The US

Thanks. I have been reporting it as income as you have confirmed. Thank you for the advice. 

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