I’ve taken the time to read thru each link and I agree that there are voids in the descriptions as far as having your Social Security contributions withheld. It appears to me that because you are working for a foreign government there really is no facility to force the employer to deduct from your salary and submit Social Security payments to the US Government on your behalf. This means that when it does come time for you to collect Social Security the amount you’ve paid in will be substandard as compared to the earnings level you’ve been accustomed to . I can’t see a way around this, it does appear to be a loophole.

Regarding if you are defined as self employed or not. My conclusion is that you are in fact self employed working for a foreign government. As a result, this ties into the Social Security contribution issue above. Keep in mind I’m not an attorney but I do believe you should set yourself up to contribute to Social Security system just as any other Self Employed person would. I know it is a big jump to go from working for someone and the FICA , Insurance and Social Security payments are done for you, to a FULLY Self employed individual where you need to maintain your future benefits yourself. In addition to factual this may also be an emotional jump for you. As a result you may postpone action. I would suggest you set yourself up that way as I would think the worst case would be that you do not prepare for your retirement and suddenly find yourself older, not capable and at the mercy of living on your SSI benefits that would be based on your payments into the system.

Good Luck Maria, I wish you the best.

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However, this is the conflicting information that confuses me…

If you are not a United States citizen, your work for a foreign government is not covered by Social Security and no Social Security taxes would be due on your earnings http://www.socialsecurity.gov/international/Work%20Covered%20By%20SSA.html

I called the IRS and I was told that a US legal resident is treated as a US citizen as far as Federal taxes are concerned, and they have to pay taxes on their income just like a US citizen, but I want to make sure how that person should report their income for Social Security self-employment taxes.

Moreover, in this particular case the foreign government does not pay for Social Security or Medicare in the United States for this employee and this person wants to be entitled to future retirement benefits.

For U.S. citizens the income paid for services rendered to a foreign government is reportable as self-employment income on their U.S. federal income tax returns, and is subject to self-employment tax to the extent such services are performed within the United States http://www.irs.gov/businesses/small/international/article/0,,id=131633,00.html

But another article reads… U.S. citizens and green card holders pay U.S. taxes on their compensation while working in the U.S. They report their compensation as income from wages on line 7 of their Form 1040, U.S. Individual Income Tax Return http://www.irs.gov/businesses/small/international/article/0,,id=156499,00.html

The IRS told me that they could report the income as self-employment and are entitled to deduction just like any self-employed individual, but their web page says something different However, these employees are not “self-employed” for any other federal tax purposes. They may not claim deductions for expenses on Schedule C http://www.irs.gov/businesses/small/international/article/0,,id=156499,00.html

As you may imagine I am very confused and after speaking with several tax professionals, IRS agents and the SSA I still can’t find the answer to my question. How to report such wages and if this person is required to do so.

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I’ve searched all thru the IRS.gov website and the latest information I found regarding the Stimulus was dated July 16, 2008 and it said nothing about new car deduction. If new car loan interest is acceptable as a new IRS Tax Deduction I’ll make a point of learning about it. I’m sure many American’s would appreciate finding out about that ASAP.

Here is the link regarding the Economic Stimulus Payment Information Center.
http://www.irs.gov/newsroom/article/0,,id=177937,00.html

In the near future I’ll add a page to IRSQuestions.org where I’ll list questions I could not find the answers. In that section, I’ll ask others for help to answer these TAX or IRS type questions. We more help we’ll all benefit.

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I believe it allows a refund on fed and state taxes…

Can this deduction be taken for ’08 (this tax return) or do we have to wait till next year?

Thx,
Robert Feldman

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I’m sorry, I started working on this and it was just more work for an Tax Question than I could research myself. That said, Jack it sounds like you need a good Accountant good in math and that also
knows Tax Law.

To All:

I spend time answering these questions about IRS information and where to get it because I just want to learn more and I’m willing to help others by sharing the questions and answers I find about IRS proceedures on this website. I’ll respond time permitting as best as I can.

IRSQuestions.org will continue to grow as I continue to find answers to questions related to IRS Tax Questions or Forms. Please remember I’m not affiliated with the IRS in any way and I’m not giving legal advice. It is your responsibility to know the IRS Tax Law.

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It is in Rhode Island and did not include the land. In RI, there are no deeds for mobil homes, only a bill of sale.

Do I need to report the proceeds of the sale? If yes, where? If yes, how do I show a loss? Furthermore, I inherited the mobile home with my two siblings, so I only had a third share.

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