Yes, sound advice indeed. None of us here have to worry about this and the International Revenue Service is your friend. So much so they’ll probably just waive years of compounding interest, taxes and penalties because of your ignorance of the law:
[quote]One obligation of self-employed individuals which is not shared by employees is the responsibility of United States FICA taxes, which include Social Security and Medicare. The Social Security tax rate is 6.2% on a taxpayer’s initial $106,800, and the rate for Medicare is 1.45%. These rates are applied to both employers and employees, and international self-employed taxpayers may be required to pay both portions, making them liable for over 15% of taxation on their net self-employment income reported on Schedule C.
Taxpayers responsible for Self Employed Contributions Act (SECA) taxes cannot find relief in FEIE or various housing deductions, as SECA taxes are not subject to their rules. FICA taxes are only assessed, however, on income which is generated within the United States. Meanwhile SECA tax is due on Self-Employment income generated by an American citizen worldwide. [/quote]