Tax Question, self employed

Success10

Sun, Aug 25 2013, 1:04 pm

So, I have to pay both income tax and SS tax (self-employed tax) as a self-employed (1099) worker? That comes out to 30%, right? If I earn under a certain amount, will I get money back? Also, I have 2 kids, but I never got them SS numbers, (I live in Israel) if I do that, how much could I get back? Just trying to figure out if something is worth my while. Thanks!

notshanarishona

Sun, Aug 25 2013, 1:45 pm

It should come out to like 15% depending on how much you make.. It stinks as there are much less deductions available than with a regular worker.
Definitely register your kids to get social security numbers.
There is a tax credit for each dependent which can significantly lower the amount of taxes that you owe.
The laws are complicated and I would recommend using an accountant.

shalhevet

Sun, Aug 25 2013, 2:00 pm

If you live in Israel, I think you have to pay Israeli income tax and Bituach Leumi, even if your employer is abroad. You should probably contact an accountant expert in both Israeli and US tax laws.

notshanarishona

Sun, Aug 25 2013, 2:12 pm

There are reciprocity laws so you don't pay double taxes. Bituach Leumi everyone pays even unemployed but you for sure should not be paying income tax to both countries.

Tova

Sun, Aug 25 2013, 2:15 pm

notshanarishona wrote:

There are reciprocity laws so you don't pay double taxes. Bituach Leumi everyone pays even unemployed but you for sure should not be paying income tax to both countries.

You still have to pay employment taxes (ie - social security / Medicare). The tax reciprocity is only for income tax.

busydev

Sun, Aug 25 2013, 4:23 pm

im not an expert but if you dont have to pay income tax only ss and medicare then theres no point in getting ss# for your kids since you dont need them and dont get anything back from ss and medicare usually.
if you have to pay income tax then def you want to gett ss# for them

Tova

Sun, Aug 25 2013, 4:55 pm

busydev wrote:

I would strongly advise getting SS numbers because of the refundable child tax credit - you can get $ back even if you don't owe US taxes. There is not a US residency requirement.

e1234

Mon, Aug 26 2013, 2:02 am

I am self employed us citizen in israel

I pay bituach leumi (and then mas hachnasah depending on the year and how much I made) and mam for my business.

To the US I file each year and it's 15% Social security (no income tax if you paid mas hachnasah)
many years I was about even in the Social security for child tax credits. one year I got money , last year I ended up paying a few hundred dollars after deducting my child tax credits.

I hope this means in my old age I will get whatever israeli's get plus social security

myname1

Wed, Jan 14 2015, 10:52 am

e1234 wrote:

I'm in the exact same situation. Anyone know if it's true? How does "retiring" work? If I'm getting SS money from the US, is Israel going to say I don't get anything because that's like a salary (I.e. not "retired")?