Originally Posted by
Probe
I think if you deduct business expenses, you are claiming that you are self employed. Not quite sure about that though.
Self-employed means you owe 15% self-employment tax.
The IRS audited a bunch of expat pilots this past two years including me. One of things they said I owed was self-employment tax, plus penalties and interest. There is a description in one of the IRS forms on what is, and is not, a self-employed contractor vs an employee. I printed it out, highlighted the section, and sent it to them with all my credentials from my foreign jobs, and the proof that I met the criteria of an employee.
They accepted it, and I won.
So, as an expat pilot, are you paying US taxes? I work in Japan but am payed by an American company. So I have taxes deducted from my paycheck.
However, business expenses are any expense that you incur while at work. In other words, if you have to pay for a hotel and are not reimbursed, that is a business expense. If you pay for your uniforms or their cleaning, that is a business expense. You don't have to be self employed to claim business expenses.
Again, if you are in doubt, contact a tax professional.