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About SteveHarris

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  • Location Berlin
  • Nationality US
  1. Is U.S. Self-Employment Tax Prorated in a Split Year?

    Thanks so much!  I will give this a try and update with results.  My wife and I work together, so the LLC/GbR makes sense for us. The steuerberater I was working with in DE said his fees would be cheaper if we conducted biz 100% as a GbR, instead of separate freelancer businesses for myself and my wife; we also have ongoing royalty and licensing agreements that are set up through the partnership, so that would be yet a third element he would have to deal with.     That said, the total steuerberater bill this year was almost 2000 euros. For our first year in Germany, we really wanted the professional support; he has provided some of that, but overall I have found the experience to be less than great. (For example, I caught him making a mistake accounting for our investment income, which he acknowledged. Also he had a problem with his email server and didn't answer my emails for 3 months.)  He said it would be cheaper for 2020 since the template has been created.  I actually am strongly considering doing the 2020 return myself using wundertax with the 2019 return as a reference.  Our business this year took a huge hit because of covid, so taxes will be minimal in any case.  
  2. Is U.S. Self-Employment Tax Prorated in a Split Year?

    Thanks so much for the detailed and expert response, Straightpoop!  I really appreciate you taking the time. There is a wrinkle: instead of being a sole proprietor (Schedule C), I conduct all business through an LLC partnership. It's registered in New York; all the clients are American, both before and after the move. The business is registered under the same name, as a GbR, in Berlin.  My wife and I are 50/50 partners; we file a 1065 and issue K-1s.  There is a box in the K-1 for "foreign transactions."  So sorry, I should have explained all this before; I was trying to keep my question simple, but of course taxes aren't simple!  The Schedule C workflow is really good info for other freelancers who find this thread.  If I could bother you again ...  - How should I fill out the K-1s and the Schedule SE to reflect the treaty exempt income?   - When writing to Deutsche Rentenversicherung for the 101-As for my wife and myself, do we need to include proof of when we moved to Germany in May (i.e. copy of Anmeldung)?  Otherwise how will they know when we moved? Search Results Web result with site links
  3. I moved from USA to Germany in May 2019. I joined KSK and starting paying German social security in August 2019. We plan to live here long-term. I have a 5-year renewable residency permit through my EU spouse; my business is registered as a GbR. I'm self-employed. Now I'm doing my 2019 tax return in USA.   If I get a German certificate of social security coverage (D/USA 101-A) that only covers the second part of the year, do I pay a prorated self-employment tax in the USA to cover the first part of the year?  How do I indicate all this on my 1040?  If I was covered the entire year in Germany, I understand I could simply write "exempt" and attach the 101-A.  My concern is the effect of the split year. I moved in May 2019, but my social security payments/coverage did not start until August. Will the 101-A only show coverage starting in August? How would this effect prorating of US self-employment tax?