Our valued sponsor

EOR to Avoid US Self-Employment Tax...?

VanderbiltyMoney

New member
Oct 12, 2023
9
0
1
38
USA
Visit site
US Citizen, commission-only remote sales person
Suppose residency in territorial tax country (Panama, Paraguay etc)

Use Employer of Record service > invoice companies I sell on behalf of, for the monthly commission amounts > companies pay invoices to EOR > EOR pays me as their "employee"

Foreign entity employed, so no 15.3% SE tax. Outside US 11+ months, so FEIE on commissions. Zero US tax

Doable? Thoughts?
 
IIRC, you can claim up to around 120,000 USD in FEIE. So whether you end up with 0% tax or not depends on your income.

If you income goes beyond 120,000 USD, you might want to look into ways to turn excess income into capital gains and see if that yields a lower net tax cost.

Best to run this setup by a CPA/tax adviser who has international tax experience.
 
  • Like
Reactions: jafo
IIRC, you can claim up to around 120,000 USD in FEIE. So whether you end up with 0% tax or not depends on your income.

If you income goes beyond 120,000 USD, you might want to look into ways to turn excess income into capital gains and see if that yields a lower net tax cost.

Best to run this setup by a CPA/tax adviser who has international tax experience.
thanks but question is regarding EOR and SE tax
 
thanks but question is regarding EOR and SE tax
Thanks but my answer addresses that. If you don't see how — it's definitely time to speak with a CPA.

But I'll add that by and large, EOR is a new thing that's untested (unquestioned). It usually works fine to avoid self employment taxes and such. But you should definitely clear it with a CPA or similar as there are quirks of local law that can put EOR arrangement into question.
 
Thanks but my answer addresses that. If you don't see how — it's definitely time to speak with a CPA.

But I'll add that by and large, EOR is a new thing that's untested (unquestioned). It usually works fine to avoid self employment taxes and such. But you should definitely clear it with a CPA or similar as there are quirks of local law that can put EOR arrangement into question.
"clear it with a CPA" can used for ANY answer on this form

Looking for Americans with any insight or experience with using EOR to avoid specifically SE tax

appreciate the attempt
 

Latest Threads