I am a US Citizen now living in Australia. My US LLC has been getting checks and I need to start paying myself a salary. Do I have to file myself as a foriegn employee? Do I pay taxes as the LLC before I do payroll? Is there a easy book that anwsers these questions?
United States - 5 Answers
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1 :
Ted - your answers are best answered by the IRS @ www.irs.gov - if the answer is not on their website, you can phone them
2 :
If all you did was set up an LLC and you did not incorporate, you file a 1040 with a schedule C. (And you don't pay yourself a wage because you aren't an employee.) As far as the foreign earned income test (which does not apply to SE tax by the way), where was the work performed? There is a totalization agreement with Australia. but if you didn't get a certificate, you must still pay the SE tax.
3 :
You probably need an accountant or tax attorney in the U.S. who can keep up with all the changes in tax law, answer your questions, and possibly prepare your taxes for you. A good accountant can often save you more than it costs for his services.
4 :
Yes, your LLC will pay all the taxes as before you moved to Australia. Your income is also subject to SE tax at 15.3% or if you are a W2 employee then you must pay SS tax and Medicare tax. On your return, you must report your world wide income. If you paid taxes in the foreign country, you will claim credit for taxes paid in the foreign country by filing Form 1116 or can file form 2555 Foreign Earned Income Exclusion.. Another filing requirement is Form TD F 90-22.1.
5 :
where is the nexus of your LLC?
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