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U.S. EXPAT TAX GUIDE – IRELAND

What does self-employment mean for US expats in Ireland?

Self-employment for US citizens in Ireland includes freelancers, contractors, or business owners outside of traditional employment structures. If you earn income independently, you’re responsible for managing your tax affairs with the Irish Revenue Commissioners.

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How does the Irish tax system treat self-employed US citizens?

In Ireland, self-employed individuals must handle their tax obligations, including income tax, the Universal Social Charge (USC), and Pay Related Social Insurance (PRSI). Unlike PAYE employees, where taxes are deducted by employers, self-employed individuals must actively calculate and pay these taxes themselves. This involves submitting an annual Form 11 tax return. 

Let’s not forget that US citizens must still report their global income to the IRS, including any self-employed earnings from Ireland. However, the US-Ireland tax treaty and tools like the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) can help prevent double taxation.

How do I report Irish self-employment income on my US tax return?

Non-US self-employment income is reported on Form 1040 Schedule C and Form 8858. 

It’s important to always file Form 8858 on time because you can be fined $10,000 for late filing. If you can’t file on time, be sure to request an extension.

Do I have to pay US self-employment tax on my Irish self-employment income?

No, if you’ve lived in Ireland for more than two years, you’ll contribute to Irish Social Security (PRSI) instead of US Social Security. The Totalization agreement between Ireland and the United States prevents US citizens and Green Card holders from paying social security to both countries and ensures coverage under Ireland’s social welfare system.

Filing income tax returns as a self-employed US citizen in Ireland

To manage your taxes efficiently in Ireland:

  • Register with the Revenue Online Service (ROS) to manage your tax records and payments digitally.
  • Submit Form 11 annually to declare your income and claim relevant tax reliefs or credits.
  • Maintain detailed records of all business-related income and expenses, which are crucial for accurate tax calculation and potential audits.
  • Meet the October 31 deadline for tax submissions to avoid penalties.

How can tax deductions and credits benefit self-employed individuals?

Tax deductions reduce your taxable income and may include:

  • Work-Related Expenses: Costs directly related to your business, such as equipment and travel.
  • Home Office Expenses: A portion of utility and broadband costs if you work from home.
  • Personal Retirement Contributions: Deductible up to certain limits, providing tax relief while saving for retirement.

These deductions require diligent record-keeping and justifications for expenses as strictly business-related.

What impact does the US-Ireland double taxation treaty have?

The treaty ensures that profits from your self-employment are primarily taxable only in your country of residence—preventing dual taxation. If your business operations extend to the US, you may also owe taxes there, but you can offset Irish taxes paid against your US tax liability through the FTC.

Why partner with a specialist Expat accountant?

Living outside of the US can make your tax filing requirements complicated. To ensure you pay the minimum amount of taxes, it’s critical to work with an accountant who understands every aspect and avenue for reducing your tax liability. We have a dedicated team of tax accountants who work exclusively with US expats earning and investing in Germany. Partnering with a specialist expat accountant can help you navigate complex tax regulations and optimize your tax situation.

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