# Salary to be in a schedule c



## salrasheid (Dec 8, 2014)

I am a new member in your forum and hope some body help. I am us citizen working as a teacher in a gulf country and there is no w2 and fica . It is not allowed for us as a foreigner to be a part of the social security of the country.
I need to pay fica so retired in us.some body told me i can fill the salary as business income in schedule c and pay the self employment tax by filling the form , other told i can fill as it salary and fill the self employement form , other told can,t fill self employment tax and pay fica
I need some one help me for this situation or have past experience


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## BBCWatcher (Dec 28, 2012)

U.S. Social Security does not permit voluntary contributions if you don't qualify. You either are or are not self-employed according to the facts of your employment arrangement.

If you are self-employed, yes, you'd pay the U.S. self-employment tax (unless a treaty says otherwise). If you are working for an employer, no, you would not.

If you are not eligible to make contributions to U.S. Social Security (and Medicare) then you'll have to make alternate, most likely private sector arrangements for your retirement, disability, survivors, and medical security needs. Or consider making adjustments to your employment situation, e.g. working in the U.S. for 10+ years, to qualify for Social Security and Medicare.


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## salrasheid (Dec 8, 2014)

Thank you BBCWATCHER , but what is wrong to consider as self employed since my contract renewed every year and the salary is given for any more work without in/ out checking. If i pay self employment tax , what bother them?
I heard from accountant that it can be done without taking expenses .


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## BBCWatcher (Dec 28, 2012)

The U.S. Internal Revenue Service defines "self-employment." If you fit their definition, OK, and if you don't you don't. It's a question of following the law, either way. I do not recommend breaking the law.

Here's a summary of the definition (official IRS Web site). I would draw your attention to this paragraph: "If an employer-employee relationship exists (regardless of what the relationship is called), you are not an independent contractor and your earnings are generally not subject to Self-Employment Tax."

You are also welcome to contact the IRS, preferably in writing, to ask them for their assessment of your situation.

Note that the self-employment tax, if it applies to your situation, is 15.3% on your first $117,000 of earned income for tax year 2014, then (if you earn more) only the Medicare tax applies above that amount. For example, if you have 2014 earned income totaling $50,000 then your total hypothetical self-employment tax (not counting personal income tax, if any) would be $7650. If you are not eligible to contribute to U.S. Social Security/Medicare then you can take that $7650 -- or more or less as you prefer -- and boost your retirement savings, disability insurance, and/or life insurance coverages through reputable, reliable private financial companies.

For example, one excellent way to boost your retirement savings is to consider opening (or adding to) a U.S. tax-advantaged retirement savings account such as a Roth IRA. Please note you are not able to contribute to a Roth IRA unless you have earned income that you have not excluded from U.S. income taxation using the Foreign Earned Income Exclusion (FEIE). Also, if you plan to retire (or could retire) outside the United States I recommend checking to see whether your chosen country will respect the tax advantages of a Roth IRA.


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## salrasheid (Dec 8, 2014)

Are there any other opinians other than BBBWATCHER ?. If BBCWATCHER is right , do i need to amend the past ?


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## Nononymous (Jul 12, 2011)

salrasheid said:


> If BBCWATCHER is right , do i need to amend the past ?


That sounds so very Orwellian.


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## Bevdeforges (Nov 16, 2007)

salrasheid said:


> Are there any other opinians other than BBBWATCHER ?. If BBCWATCHER is right , do i need to amend the past ?


When it comes to US taxes, there generally is always some sort of responsible alternative opinion floating around. When I worked for one of the big public accounting firms, we called it "taking an aggressive tax stance."

You could try just reporting your salary income as "self-employed" and paying your "self-employment tax" based on your gross salary. I wouldn't bother filing a Schedule C as you probably don't have any business expenses to take against your pay anyhow.

If you pay the self-employment tax, chances are they won't refuse it and you will get your additional quarters applied to your Social Security record. 

It's not strictly by the book, but given that teachers are normally not in the upper salary brackets and, if anything, you'd be overpaying rather than underpaying, you could try it and see what happens.
Cheers,
Bev


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## salrasheid (Dec 8, 2014)

Thank you Bevedforge for your comment ,but as i undestand from your suggestion to fill income in salary and compensation field and fill the self employment schedule for that income without schedule C.Do you think i can do it by the tax software to efile.
I think there may be unlogical issue regarding this matter if you can't pay for your social security while working in a country that not allowed you to enter their system. What is difference between sel employed and employee for this case ?
I do' t know if there is any way to repair such loophole


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## salrasheid (Dec 8, 2014)

I would like Bevedforge or any one have experience in accounting field to comment for which is better field to include my salary income, in line 7 for wages or in line 12 for business income . Thank's for all


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## Bevdeforges (Nov 16, 2007)

If you use line 12, you'll have to file a Schedule C (at least on most tax softwares). Put it on line 7 and then on the 2555 and/or the line on the 1040 that asks for your occupation, put "self-employed teacher." Fill in the lines that relate to "self-employment tax" (which is, after all, nothing but social security tax - only both the employer and employee portions).
Cheers,
Bev


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## salrasheid (Dec 8, 2014)

Thank you guys .you do a great work


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