I am a US citizen who has been a foreign resident for years. I have recently gotten a job as a consultant for a US company. I will be doing the work in Japan, but will be paid to a US account that I have from prior to leaving the country.
I read this article about 'US Self-Employment Tax' saying:
If you are self-employed, however, acting as an independent contractor, then you must file a Schedule C with your U.S. Tax return and pay the appropriate U.S. payroll taxes on your net earnings. The self-employment tax rate is 15.3% and the foreign income exclusion mentioned before does not reduce this liability.
In Japan as someone who is self-employed I have to pay for pension and other expenses individually. Japan and the US have a tax treaty that is supposed to prevent double taxation for this sort of thing. If I intend to pay the social security in Japan, do I still need to pay this payroll tax, and if not, how do I inform the IRS not to hassle me about this? Not expecting a tax consultation, but would like to at least be pointed in the right direction.