2024-11-17
This past Friday, Phil Hodgen of HodgenLaw PC published an interesting blog post titled "Check-the-Box Election and Self-Employment Tax". His post discusses the U.S. self-employment tax of a U.S. citizen who owns a foreign disregarded entity. Under the facts posited by Phil:
A foreign company is owned by Wife. Husband is an employee of the company.
The company is classified as a corporation for foreign country tax purposes and as a disregarded entity for U.S. tax purposes.
For foreign country tax purposes, both H and W are paid wages. They pay income tax and the foreign country equivalent of Social Security tax on the wages.
Phil's post inspired me to create a chart of the structure he described.
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