Confused about taxes. Non taxed foreign income?

Question

Hi,

I work for a company that resides in Hong Kong. They pay me monthly for my work and don't take out any taxes. I'm not required to pay them any taxes.

What I want to know is how I go about filing taxes here. Obviously I want to do it all properly and pay what I owe but I don't really know where to start.

I assume I would be considered self employed, but I do work a regular daily 5 day a week shift for them. I just do all my work from my home office.

Anyone have any ideas on this? How would I file?

Say I make $50K this year. Around what would I be expected to pay in overall taxes ( I live in IN) for the year?

Any help would be greatly appreciated.

Thanks,

Adam

Answer 1

On your U.S. return, you must report your worldwide income. If the total income meets the filing requirement, you must file your tax return.Filing in the U.S. does not necessarily mean that you will be paying taxes in US also. You will get credit for taxes paid in the foreign country. Read: http://taxipay.blogspot.com/2008/03/us-c...

Answer 2

You are taxable (state, local, and social security) on all of your income.  If your employer does not withhold, you are required to pay quarterly estimated taxes (which is basically the equiv of you paying in your own withholding) the fed form for this is a 1040ES, you'll have to look up the Indiana form.  If your employer is not withholding social security, you will have to pay self employment tax which is a little over 15% on top of your federal and state income tax.  Cant tell you your income tax amount without knowing your deductions.  Do you itemize?  Own a house?  When you file your 1040 next April, you will caluclate all of your earnings, minus your deductions, and then "true up" the amount of tax you paid in advance on the estimated tax forms to the amount you actually owe.  If it turns out that you can be considered an "independent contractor" rather than an employee, be sure to keep track of any business expenses like mileage or computers that you are not reimbursed for, as you may be able to deduct these as well.  Good luck!