# Freelance work and US taxes



## Alltimegreat1 (Feb 25, 2015)

I've been granted permission to do freelance work on the side by my German employer. The freelance work would be completed inside of Germany for German and Swiss companies. Will this create any additional reporting requirements or forms for my US taxes (FTC/FEIE)? Or do I simply add this income to my normal income?


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## BBCWatcher (Dec 28, 2012)

There's a bit of paperwork, but it should only be a bit. Here are a couple items to take care of:

1. If you're making German social insurance contributions from that income (also), then you won't owe the U.S. Self-Employment Tax. However, check the instructions for IRS Form 1040 Schedule SE, page SE-2, to understand how to handle that situation. (You need to attach a statement to your tax return and write a few words on line 57.)

2. You'll likely need to file Schedule C or Schedule C-EZ with your tax return.

3. If you set up a separate bank account for receiving freelance income (or for any other purpose) then that foreign account is reportable (FinCEN Form 114 and/or IRS Form 8938, as applicable).

That's all I can think of.


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## Bevdeforges (Nov 16, 2007)

Basically, if you're taking the FEIE, you'll just indicate that you have foreign earned income from two sources. As BBC mentions, technically speaking, if you're "self employed" you may wind up having to pay the US self-employment tax on the freelance earnings. (US self-employment tax = both sides of US social security).

However, if it's not a huge amount I'd be seriously tempted to lump the freelance work in with your regular salary. (They pretty much have to take your word for your salary income in any event.) Up to you how scrupulously honest you want to be.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

No, there won't be SE Tax -- no "might." It'll be German social insurance contributions only. These two countries have a social security treaty.


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## Alltimegreat1 (Feb 25, 2015)

Ok, so am I correct to assume that the taxes I pay in Germany on the freelance income are equally eligible to be credited under the FTC?


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## BBCWatcher (Dec 28, 2012)

Income taxes, yes. Other taxes, such as social insurance taxes, no. That's provided you're not taking the Foreign Earned Income Exclusion, or that (if you are) that income is above your FEIE/FHE limit.


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