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Background

I'm not a US citizen but I've been living and working as a computer engineer in US on a work visa (OPT) for the past ~3 years and previously went to a university in the US as well. Based on the duration of my stay, I am a tax resident and have been paying taxes accordingly for the past few years (I live in Florida so there's no state income tax).

In my full-time job in Florida I make $60k/year. My employer withholds taxes including Social Security, Medicare and Federal Income Tax and provides me with a W2.

In late April 2017, I started a remote contracting job (on top of my current job) for a company from London. This job will pay me $2500/month ($25/hr for 100hrs/month) for 5 months (May, Jun, Jul, Aug, Sep), which is an additional $12,500.

This puts my total gross income for 2017 at $72,500, which still leaves me in the 25% tax bracket (I'm single).

Problem

My UK contracting job doesn't withhold any taxes. I've never held a contracting job before and I've had little luck figuring out how this affects my tax situation, considering I also have a full-time job.

How do I pay taxes on this extra income from the UK job?

  • Which forms are needed?
  • How do I know how much I should pay? Currently I'm just not spending any of this extra income until I figure out what to do.
  • Through my research I found that I should probably pay quarterly installments, is this true? If so, when should I pay them and with which forms?
  • Do I not need to pay Social Security and Medicare again?
  • Any advice on how do I figure out what deductions I can have?

Any help is much appreciated!

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I don't know the specifics of UK taxes, but have similar experience as a US resident with contract income from abroad.

You will need to file estimated taxes on the contracting income. You use form 1040-ES to do this. It has a fairly complicated estimating scheme. (Which I've never been able to use since it seems to require foreknowledge of how much you'll earn in later quarters.) There's a safe harbor provision which IIRC lets you pay a minimum of 90% of last year's tax.

The form is filed sort of quarterly, usually the 15th of April, June, September, and January of the following year.

You will need to pay SS and FICA. You compute this on form 1040SSE, which you file with your annual return.

Business expense deductions are filed on Schedule C (which you probably should file to report your contracting income anyway). Just what is deductible can be quite complicated - e.g. if you have a home office you might be able to deduct part of your rent/mortgage, utilities &c. Start by reading the instructions for Schedule C.

This all applies to US only. I don't know if the UK will tax you, but if so, you can take a credit for those taxes so you aren't taxed twice.

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