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NUMILA
Mar 25, 2008, 09:16 AM
I am a resident of NJ but I accepted a job from a company in New Zealand. I performed all of the work from my home in NJ, but the New Zealand company wired me weekly paychecks directly to my NJ Business checking account. How do I account for that income? Do I fill out form 2555 even if I never stepped foot in the foreign country? They never took out any taxes. How should I account for this income
AtlantaTaxExpert
May 2, 2008, 01:14 PM
Negative. That is income earned within the confines of the U.S. and is therefore fully taxable as earned income.

Because the New Zealand employer is NOT a U.S. employer, YOU must bear the cost of paying BOTH sides of the FICA taxes, which means the income is treated as Form 1099-MISC income.

In other words, you are running a business and must file Schedules C and SE with Form 1040,