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Level 2
February 15, 2025
Question

Employees

  • February 15, 2025
  • 2 replies
  • 11 views

Good afternoon.

I have a client, dual citizen (Italy and US) that works for the Italian Consulate in Miami (Italian Foreign Affairs Ministry) and this is my first time with this kind of payer.

She receives a payroll that shows Social Security coverage under the Italian Office (INPS).

Where do I have to report the income for tax purposes (is she subject? Italy did not apply theirs). Where to report the social security paid in Italy? Is she allowed to deduct expenses? I know that she can't file Schedule C but at the consulate they told her she can deduct all her expense. Is it true? I am dubious.

Thank for your help

 

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2 replies

BobKamman
Level 15
February 15, 2025

Wages, Line 1, foreign employer.  She's a US citizen.  End of story.  What expenses does she have?  Doesn't really matter, employee business expenses are off the table at least through this year.  

BobKamman
Level 15
February 15, 2025

And she probably should be paying self-employment tax on her wages, although there may be an agreement that her coverage in Italy eliminates that requirement. 

https://www.irs.gov/individuals/international-taxpayers/employees-of-a-foreign-government-or-international-organization-how-to-report-compensation