ITIN & SE Tax

[WhiteOleander]

T/P came in with letter from Soc. Sec. (not IRS) stating that they need clarification on the SE tax paid under the ITIN.

T/P filed a Sch C and paid Se tax. So, if we amend and take off SE tax, will IRS holler and say that T/P must pay SE tax even though they do not have a Soc Sec number?

The only thing I can find about this is in the instructions to the W-7. It states that the ITIN # does not entitle the T/P to "receive" Soc Sec. Can I infer that it means they are exempt from paying the SE tax?

[George Boutwell]

Just out of curiosity . .

What does the letter from Social Security say?

[Jiggers]

ITIN & SE Tax

Does an ITIN grant an alien the right to work legally in the US? If not, he should not be self-employed with a Schedule C.

If he is working here illegally, can he be deported?

[WhiteOleander]

What does the letter from Social Security say?

Well, I don't have it in front of me right now. But, it says that there has been SE tax paid in on # 999-99-9999 and there is no SS number such as this.

What I gather from the letter, they are saying there is no SS number to "post" the money to.

So, I guess they don't want it. LOL

[erchess]

Does an ITIN grant an alien the right to work legally in the US? If not, he should not be self-employed with a Schedule C.

If he is working here illegally, can he be deported?

My understanding is that the whole point of an ITIN is to let the person file taxes as if he were a US Citizen and leave the IRS out of his relations with the rest of our Government. ITIN holders routinely receive employee and self employment income.

[Bees Knees]

There is nothing in code section 1402 that exempts a taxpayer from paying self employment tax simply because the taxpayer does not have a Social Security Number. The letter from Social Security simply means the taxpayer is not receiving credit from the Social Security Administration for SE tax paid because the taxpayer does not have a SSN. If the taxpayer wants credit, the taxpayer needs to qualify for and apply for a SSN.

[bertrans]

ITINs & SET

You'll have to clarify this with the Social Security Administration. The IRS , under Code Section 1402, as noted by another poster, requires the payment of SET on self-employment income; in fact, the IRS computer system is programmed to report such income and tax to SSA systemically, under the ITIN. As I said, check with SSA>