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Business Expenses Deduction
Can I deduct business expenses if my foreign employer does not issue a W2?
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Sure, why not. Self-employed people do it. Of course, if any doubt, contact a tax professional.
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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. |
Originally Posted by Probe
(Post 1572359)
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. 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. |
Originally Posted by jrmyl
(Post 1572442)
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. If you claim that you are a salaried employee, even then you can claim the all the expense/bills that were NOT paid for by the employer while on the road. Expenses such as hotel, uniform cleaning, meals, phone, Internet, roaming charges etc can de deducted as un-reimbursed employee business expenses by using Form 2106 on the tax return. http://www.irs.gov/pub/irs-pdf/i2106.pdf But tread carefully in what you choose to write off, specially if get a per diem... |
Originally Posted by bcpilot
(Post 1572508)
If you claim that you are a salaried employee, even then you can claim the all the expense/bills that were NOT paid for by the employer while on the road. Expenses such as hotel, uniform cleaning, meals, phone, Internet, roaming charges etc can de deducted as un-reimbursed employee business expenses by using Form 2106 on the tax return.
http://www.irs.gov/pub/irs-pdf/i2106.pdf But tread carefully in what you choose to write off, specially if get a per diem... You are exactly correct. Not sure how anyone else does per diem, but the way I have done it is to deduct the difference between the published rates and what I have actually received. I use the M&IE rates published by the US State Department for OCONUS locations. |
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