# Self-Employment Tax -Help!



## Drewm (Jun 6, 2016)

I have lived and worked in Italy for over 15 years and I am now finally trying to get compliant with filing my US taxes. I am resident in Italy and am self-employed as a translator. As such I pay 27% of my income to Italian social security.
Now the accountants I'm working with in the US to file the last 3 years of tax returns in the US are telling me that under the agreement with Italy, as I'm self-employed, I have to pay US social security (self-employment tax) and not pay Italian social security. That I should get a certificate from the US and I will get refunded the payments I have made to Italy. 
I plan on staying in Italy permanently. This is kind of ridiculous. The payments I made to Italian INPS also cover healthcare here. I would seriously prefer to keep paying in Italy, not the US. Are there any ways of choosing to pay Italy instead of the US? Or will I have to take Italian citizenship in order to do that?
Has anyone had a similar experience or could recommend any advisors on this? I would greatly appreciate any advice or help. Thanks.:confused2:


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## BBCWatcher (Dec 28, 2012)

Drewm said:


> Now the accountants I'm working with in the US to file the last 3 years of tax returns in the US are telling me that under the agreement with Italy, as I'm self-employed, I have to pay US social security (self-employment tax) and not pay Italian social security.


The U.S. Social Security Administration summarizes the treaty with Italy here. Refer to the "Summary of Agreement Rules."



> The payments I made to Italian INPS also cover healthcare here.


That's not correct, or at least it's not correct for the "mandatory registration" category of ASL enrollees. Working and non-working people alike are enrolled in ASL.



> I would seriously prefer to keep paying in Italy, not the US. Are there any ways of choosing to pay Italy instead of the US?


No and yes. No, you cannot choose your system. The treaty decides that based on your individual facts and circumstances. However, sometimes you can choose your facts and circumstances.

All that said, you're probably much better off with the U.S. system. It's quite simply the better system, with more favorable demographics and thus more generous retirement benefits for you and for your spouse. The contribution tax rates are also much lower. This is a happy problem to have if you have it, really.


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## Drewm (Jun 6, 2016)

Thanks so much for your advice. I have done some research, and yes, the US system seems much better. 
I'm confused about the Certificates of Coverage. Do you know anything about them? The accountant I'm working with said I will need one every year. But the problem is that for Italian INPS I am supposed to pay a large advance each year (for example, this year in November I have to pay a large advance on my 2016 INPS). Can I get a certificate for the current year to avoid having to pay this advance to INPS? I can't imagine how long it will take INPS to refund the contributions I've paid in...


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## BBCWatcher (Dec 28, 2012)

Drewm said:


> Can I get a certificate for the current year to avoid having to pay this advance to INPS?


Not sure, but what happens if you don't pay the advance when you're INPS exempt?


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