U.S. TAX GUIDE IN IRELAND
What should US expats know about being self-employed in Ireland? 
If you’re an American living in Ireland and working for yourself, whether freelancing, consulting, or running a small business, you’ll be experiencing the hardships of tax responsibilities in both Ireland and the US.
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How does Ireland tax your self-employment income?
In Ireland, being self-employed means you’re responsible for paying your own income tax, the Universal Social Charge (USC), and Pay Related Social Insurance (PRSI).
Unlike regular employees, who have taxes deducted from their paychecks, you’ll need to handle this through an annual tax return using Form 11.
On top of that, as a US citizen, you also have to report your income to the IRS, but don’t worry—the US-Ireland tax treaty and provisions like the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) help you avoid paying taxes twice on the same income.
What’s the process for reporting Irish earnings to the IRS?
If you’re self-employed in Ireland, you must report your earnings to the IRS by including them on Schedule C of your Form 1040.
If your business is a foreign branch, you’ll also need to file Form 8858. Make sure to file on time because late submissions can lead to penalties of up to $10,000.
Do US self-employment taxes apply to what you earn in Ireland?
Usually, no.
After living in Ireland for two years, your social security contributions go toward Ireland’s system (PRSI) rather than US Social Security.
Thanks to the Totalization Agreement between the US and Ireland, you avoid paying social security taxes in both countries, and your contributions count toward benefits under Ireland’s social welfare system.
How can you stay on top of your tax obligations as a self-employed American in Ireland?
- Sign up with Revenue Online Service (ROS): Use this system to file and pay your taxes online.
- Fill out and submit Form 11: This form helps you report your income and claim any deductions or credits.
- Keep detailed records: Document all income and expenses related to your business.
- Meet the October 31 deadline: Make sure your taxes are filed on time to avoid penalties.
What deductions and credits can you claim to reduce your taxes?
Self-employed individuals in Ireland can lower their taxable income with deductions like:
- Business Expenses: Deduct costs related to your business, such as equipment and travel.
- Home Office: If you work from home, you might be able to deduct a portion of your utility and internet costs.
- Retirement Savings: Contributions to a retirement plan can also reduce your taxable income, giving you tax relief while planning for the future.
How does the US-Ireland tax treaty protect your income?
The tax treaty between the US and Ireland typically means that your self-employment income is taxed in Ireland, not the US, helping you avoid double taxation.
If your business also operates in the US, you might owe taxes there, but the Foreign Tax Credit (FTC) can usually offset this amount.
