More Tax Foo
This is more for my reference than anything else.
According to the IRS's publication on self-employment tax...
Effect of Exclusion
You must take all of your self-employment income into account in figuring your net earnings from self-employment, even income that is exempt from income tax because of the foreign earned income exclusion.
Example.
You are in business abroad as a consultant and qualify for the foreign earned income exclusion. Your foreign earned income is $95,000, your business deductions total $27,000, and your net profit is $68,000. You must pay self-employment tax on all of your net profit, including the amount you can exclude from income.
This means that, yes, I do have to pay that tax that I figured the other day and was baffled and annoyed about. Ah well.
However... Beth 4 : IRS 0 for me figuring out how to do my foreign taxes four years running without help in spite of the crappy instructions the IRS provides.
Go me.
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Beth Ballingall
food lover : world traveller : gamer : New Yorker : twenty-something : former Londoner : handbag lover : erstwhile soprano : geek