Page 253 - Individual Forms & Instructions Guide

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
If you were a U.S. citizen or resident U.S. social security taxes. For further in- Nonresident Alien
alien serving outside the United States formation about these agreements, see If you are a self-employed nonresident
as a minister or member of a religious the exception shown in the next section. alien living in the United States, you
order and you must pay SE tax, you must pay SE tax if an international so-
can’t reduce your net earnings by the U.S. Citizens or Resident Aliens cial security agreement in effect deter-
foreign earned income exclusion or the Living Outside the United States mines that you are covered under the
foreign housing exclusion or deduction. If you are a self-employed U.S. citizen U.S. social security system. See Excep-
See Pub. 517 for additional details re- or resident alien living outside the Uni- tion under U.S. Citizens or Resident Ali-
garding social security for members of ted States, in most cases you must pay ens Living Outside the United States,
the clergy and religious workers. SE tax. Foreign earnings from self-em- earlier, for information about interna-
ployment can’t be reduced by your for- tional social security agreements. If your
Members of Certain Religious eign earned income exclusion when self-employment income is subject to
Sects computing SE tax. SE tax, complete Schedule SE and file it
with your Form 1040-NR.
If you have conscientious objections to Exception. The United States has social
social security insurance because of security agreements with many countries
your membership in and belief in the to eliminate dual taxes under two social Chapter 11 Bankruptcy Cases
teachings of a religious sect recognized security systems. Under these agree- While you are a debtor in a chapter 11
as being in existence at all times since ments, you must generally pay social se- bankruptcy case, your net profit or loss
December 31, 1950, and which has pro- curity and Medicare taxes to only the from self-employment (for example,
vided a reasonable level of living for its country in which you live. from Schedule C or Schedule F) won't
dependent members, you are exempt The United States now has social se- be included in your Form 1040 or Form
from SE tax if you received IRS appro- curity agreements with the following 1040-SR income. Instead, it will be in-
val by filing Form 4029. In this case, countries: Australia, Austria, Belgium, cluded on the income tax return (Form
don’t file Schedule SE. Instead, enter Brazil, Canada, Chile, the Czech Repub- 1041) of the bankruptcy estate. Howev-
“Exempt—Form 4029” on Schedule 2 lic, Denmark, Finland, France, Germa- er, you (not the bankruptcy estate) are
(Form 1040), line 4. See Pub. 517 for ny, Greece, Hungary, Iceland, Ireland, responsible for paying SE tax on your
details. Italy, Japan, Luxembourg, the Nether- net earnings from self-employment.
lands, Norway, Poland, Portugal, the Enter on the dotted line to the left of
U.S. Citizens Employed by Slovak Republic, Slovenia, South Ko- Schedule SE, line 3, “Chap. 11 bank-
Foreign Governments or rea, Spain, Sweden, Switzerland, the ruptcy income” and the amount of your
International Organizations United Kingdom, and Uruguay. net profit or (loss). Combine that

You must pay SE tax on income you If you have questions about interna- amount with the total of lines 1a, 1b, and
earned as a U.S. citizen employed by a tional social security agreements, or to 2 (if any) and enter the result on line 3.
foreign government (or, in certain cases, see if any additional agreements have For other reporting requirements, see
by a wholly owned instrumentality of a been entered into, you can visit the So- Chapter 11 Bankruptcy Cases in the In-
foreign government or an international cial Security Administration's (SSA's) structions for Form 1040.
organization under the International Or- International Programs website at More Than One Business
ganizations Immunities Act) for services SSA.gov/international. The website also
performed in the United States, Puerto provides contact information for ques- If you had two or more businesses sub-
Rico, Guam, American Samoa, the tions about benefits and the agreements. ject to SE tax, your net earnings from
Commonwealth of the Northern Mariana If your self-employment income is self-employment are the combined net
Islands, or the U.S. Virgin Islands. Re- exempt from SE tax, you should get a earnings from all of your businesses. If
port income from this employment on statement from the appropriate agency you had a loss in one business, it re-
Schedule SE, line 2. If you performed of the foreign country verifying that duces the income from another. Figure
services elsewhere as an employee of a your self-employment income is subject the combined SE tax on one Sched-
foreign government or an international to social security coverage in that coun- ule SE.
organization, those earnings are exempt try. If the foreign country won’t issue Joint Returns
from SE tax. the statement, visit the SSA Office of
Exception—Dual citizens. A person Earnings and International Operations at Show the name of the spouse with
self-employment income on Sched-
with dual U.S.-foreign citizenship is SSA International Programs Online ule SE. If both spouses have SE income,
generally considered to be a U.S. citizen Certificate of Coverage Service. Don’t each must file a separate Schedule SE.
for social security purposes. However, if complete Schedule SE. Instead, attach a
you are a U.S. citizen and also a citizen copy of the statement to Form 1040 or Include the total profits or losses
of a country with which the United Form 1040-SR and enter “Exempt, see from all businesses on Form 1040 or
States has a bilateral social security attached statement” on Schedule 2 Form 1040-SR. Enter the combined SE
agreement, other than Canada or Italy, (Form 1040), line 4. tax on Schedule 2 (Form 1040), line 4.
your work for the government of that
foreign country is always exempt from

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