# US Expat UK Employed and "Self-Employed" Tax Return Query



## Harrison Bergeron (9 mo ago)

Hi there,

I was wondering if the kind folks would be able to offer some assistance to someone who is employed and has now earnt a bit extra on the side.

I am US Expat and have been in the UK for approximately 8 years now. I am employed earning a salary from an employer/PAYE. During 2021 I had additional income on the side on top of my full time Employed/PAYE income.

In the UK for the additional self employed income part, this requires is a simple self assessment form and as my turnover is less than £85,000 I do not have separate all my expenses out. Only total income and expenses required. Then I pay any additional income tax and NI on top of all which is already deducted directly through my salary/PAYE. Nice and simple.

My figures converted to USD are salary circa $70k. Additional income circa $20k. These are professional services, which do incur a small amount of expenses.

My usual US tax return for my employed income is on the simpler side.
1040
1040s1
1040sb
F2555
Fbar

I note on Form 2555 Part IV 2020 Foreign Earned Income where I usually list my total wages on box 19 there is box 20a "In a business (including farming) or profession".

Can I add my additional income (gross or nett) here and be done with it? If I did this are there any additional forms required?

Or alternatively Is there another easy way to do this correctly?

Having taking a quick look at at Schedule C and 1040SE I would like to avoid these forms if possible. Or am I going to have to complete them? Are there any additional forms to fill out on top?

In advance thank you for anyone taking the time to read and respond. Very much appreciated.


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## MyExpatTaxes (10 mo ago)

Harrison Bergeron said:


> Hi there,
> 
> I was wondering if the kind folks would be able to offer some assistance to someone who is employed and has now earnt a bit extra on the side.
> 
> ...


You will need to add your self-employment income on Schedule C, the US will ask you to separate out gross receipts vs. expenses. You can try to model your return in our software first with just gross receipts to see if expenses are needed as you are using Form 2555.

You will want to avoid Schedule SE or else you can expect a 15.3% self-employment tax. Again our software will help you claim the totalization treaty, otherwise make sure you claim it when doing your return yourself. Sorry it isn't more simple!


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## Moulard (Feb 3, 2017)

MyExpatTaxes said:


> You will want to avoid Schedule SE or else you can expect a 15.3% self-employment tax.


You do that by getting a certificate of coverage from Inland Revenue

Given you have both dependent and independent personal services income, your UK employer can request a certificate for you, or you can do it yourself (under the guise of being self employed)

Details here...



https://www.ssa.gov/pubs/EN-05-10199.pdf


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## Harrison Bergeron (9 mo ago)

MyExpatTaxes said:


> You will need to add your self-employment income on Schedule C, the US will ask you to separate out gross receipts vs. expenses. You can try to model your return in our software first with just gross receipts to see if expenses are needed as you are using Form 2555.
> 
> You will want to avoid Schedule SE or else you can expect a 15.3% self-employment tax. Again our software will help you claim the totalization treaty, otherwise make sure you claim it when doing your return yourself. Sorry it isn't more simple!


Can you expand on how modelling my gross receipts will impact my return if I am using Form 2555? What are the possible outcomes? What is the purpose of box 20a?


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## Harrison Bergeron (9 mo ago)

Moulard said:


> You do that by getting a certificate of coverage from Inland Revenue
> 
> Given you have both dependent and independent personal services income, your UK employer can request a certificate for you, or you can do it yourself (under the guise of being self employed)
> 
> ...


Thank you for this. If I obtain this certificate do I just include it with the return and not include the 1040SE at all? I do not see anywhere on the 1040SE/C to say I have the certificate.


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## Moulard (Feb 3, 2017)

Harrison Bergeron said:


> Thank you for this. If I obtain this certificate do I just include it with the return and not include the 1040SE at all? I do not see anywhere on the 1040SE/C to say I have the certificate.


Per the instructions for Schedule SE

Don’t complete Schedule SE. Instead, attach a copy of the statement to Form 1040 or Form 1040-SR and enter “Exempt, see attached statement” on Schedule 2 (Form 1040), line 4.


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## Harrison Bergeron (9 mo ago)

Has anyone requested a certificate recently and what was the turnaround time you experienced?


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