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Per IRS Instructions for Schedule SE (Form 1040) Self-Employment Tax, on page SE-2:

U.S. Citizens or Resident Aliens Living Outside the United States

If you are a self-employed U.S. citizen or resident alien living outside the United States, in most cases you must pay SE tax. You can’t reduce your foreign earnings from self-employment by your foreign earned income exclusion.

Exception. The United States has social security agreements with many countries to eliminate dual taxes under two social security systems. Under these agreements, you generally must pay social security and Medicare taxes to only the country in which you live.

The United States now has social security agreements with the following countries: Australia, Austria, Belgium, Brazil, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, Norway, Poland, Portugal, Slovak Republic, Slovenia, South Korea, Spain, Sweden, Switzerland, the United Kingdom, and Uruguay.

If you have questions about international social security agreements, or to see if any additional agreements have been entered into, you can visit the Social Security Administration's (SSA's) International Programs website at SSA.gov/international. The website also provides contact information for questions about benefits and the agreements.

If your self-employment income is exempt from SE tax, you should get a statement from the appropriate agency of the foreign country verifying that your self-employment income is subject to social security coverage in that country. If the foreign country won’t issue the statement, contact the SSA Office of International Programs. 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.

To remove Schedule SE from your TaxAct® return, if necessary:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Taxes in the Federal Quick Q&A Topics menu to expand, then click Self-employment tax adjustments.
  3. Continue with the interview process to enter all of the appropriate information.
  4. On the screen titled Self-Employment Tax - Social Security Agreement with Another Country, mark the applicable checkbox to indicate that the self-employment income is not subject to U.S. self-employment tax, then click Continue. Schedule SE will no longer be a part of your return.
  5. Print the return and manually write "Exempt, see attached statement" on Line 4 of Schedule 2 (Form 1040) Additional Taxes and attach a copy of the statement from the appropriate agency of the foreign country to Form 1040 U.S. Individual Income Tax Return.

Please refer to IRS Publication 54 Tax Guide for U.S. Citizens and Resident Aliens Abroad for additional information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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