Tip: Self-Employment Tax (US)

So here’s a quick comment on something that I see often:

As a US citizen, you have to declare 100% of your worldwide income. This includes self-employment earnings. So, you’re a Canadian Tax Resident/US Citizen, and you’re preparing your own US tax return. Watch that the software doesn’t auto-fill US SE tax on your business earnings. Otherwise you’re incorrectly paying both US SE tax and Canadian CPP.

This is bad.

There’s some stuff in the Binational Social Security Agreements that effectively says if you’re paying CPP, you don’t have to pay US self-employment tax. So don’t get caught paying double tax if you don’t have to.

Further reading: https://www.ssa.gov/international/agreements_overview.html