What is self-employment income?

Self-employment income is earned by US individuals in the UAE working as independent contractors. This income comes from various services provided and typically involves expenses like home office costs, advertising, and license fees.

Are there additional tax filing requirements for self-employed individuals?

Yes, self-employed individuals must file an additional form with their 1040 tax return, detailing gross revenue and expenses. This helps calculate net income, which may qualify for the foreign-earned income exclusion if criteria are met. However, the net income is still subject to a 15.3% self-employment tax for Social Security and Medicare.

What are the key points to remember if I’m self-employed in the UAE?

  • Report Income and Expenses: Accurately report all income and eligible expenses.
  • Understand Tax Obligations: Net income might be excluded federally but still incurs self-employment tax.
  • Seek Professional Advice: A tax professional can help ensure compliance and optimize your tax situation.

More about the UAE guide