Can you earn income and pay taxes to the United States government when you are a non-citizen and not living in USA?

Question

I would like to do freelance work and earn income in United States dollars. I would like to pay taxes to the United States government.

I have an SSN from the time that I actually lived, worked and physically resided in the United States on a visa. I do not reside in the United States anymore.

Can I join freelance sites, like Upwork or other freelance sites, and earn money in dollars and pay taxes to the us government? I am worried this will not work, because there is a question on the tax form 1040 which asks for how long have you resided inside the United States. I would not have resided even one day in the United States as all the work I plan to perform will be done from outside the United States. In this case, how do I pay taxes on the money that I will earn from freelance?

If it helps, I am not an US citizen.

Answer 1

Someone who is not a U.S. citizen and does not live in the U.S. might still do business in the U.S. and pay U.S. taxes on their U.S. income. See IRS Publication 519, “U.S. Tax Guide for Aliens”:

Nonresident aliens are taxed only on their income from sources within the United States and on certain income connected with the conduct of a trade or business in the United States

The IRS has a webpage with information about international business and withholding forms, but you really want to ask a tax lawyer. The details are going to depend on your particular circumstances, such as whether your home country has a reciprocal tax treaty with the U.S.

Answer 2

If you want to donate money to the United States government - you don't have to live in the US or earn money in US dollars. Just go to the US Treasury website and donate.

The tax is what you pay based on the Internal Revenue Code and other statutes of the US law, but since they don't apply to you - you don't have to pay any tax.

Answer 3

You already do owe taxes... to some nation.

Presumably when you are doing business, you are the citizen of a country and a resident of a country. That country considers your activities to be taxable income in their country.

Sometimes this jurisdiction can be ambiguous, and countries have tax treaties to resolve that one nation taxes you, so you aren't paying significant taxes in multiple countries. (The US requires their citizens abroad to report foreign income, and in some cases pay tax on it. I suppose you could use this approach with the IRS and incorrectly file the paperwork as if you are a citizen). That will get you no closer to US citizenship.

Anyway, I'd really hate for you to cheerfully pay US taxes and then later, find you owe taxes to another country. As such, if you want to support the US, I say avoid a flat-out donation and simply file your 1040 tax forms incorrectly. That way, if things go horribly wrong, you can reverse it by filing a 1040X "amended tax return" with the corrected information. IRS will then send your money back to you (eventually LOL). Provided you file it within 3 years.

Note also that there are amazing American non-profits (not-for-dividend or NGO) organizations worthy of support. A huge amount of "what would be a government role" is done by nonprofits - from charitable support of the needy, to actual law-making. (Really. NFPA and UL are two public charities that craft almost all electrical and appliance safety laws.)

Denomination in dollars does not create US tax obligation

The US dollar has been laughably referred to as "the world's reserve currency" given the long-term stable status - not generally subject to national upheavals, hyperinflation and other maladies - and of course, accepted everywhere. A Serb doing business in Zimbabwe might use it rather than local currencies.

The mere fact of two foreigners doing such transactions does not create a tax obligation to the United States.

Conversely if myself and a person in Japan did business, and for whatever reason (supplier issues?) I was paid in Euros, I do not owe any tax to Portugal.

Who would I pay taxes to if I was doing business in Bitcoin? Sealand?

In fact, if you use certain freelance websites, you may be required to do business denominated in USD. But they will ask you all required questions to comply with US tax law. I doubt all such sites know how to do tax reporting in every country; they might simply refuse to do business with people in countries they are not prepared to do tax work with. I suppose you could lie to those sites and claim you are domiciled in the United States; that would create a US tax obligation until you showed IRS that you lied to the employer. (however this also means lying on the W-4 and other paperwork they collected, which may create other obligations).

Answer 4

As a freelancer you typically have to set up a business - some type of sole proprietorship - somewhere. This business can then do business with companies that are local or abroad. Typically the law of the country you reside in require (or realistically just make it far simpler) to set this up in the country you reside in. Next the combination of residing in that country + having your business there require you to pay your taxes there[1].

In other words, just because you pay taxes to the US wouldn't in any way make you less liable to pay taxes to the country you reside in.

Practically speaking you just want to be able to do gigs for US companies, and the 'sad' truth of the matter is that it's not something you can just trivially do. You will have to check the local law of the country you reside in, and the laws of the countries you are a citizen in to see what options you have. And even once you figure all that out the companies in the US might not be interested in working with you, as it can sometimes complicate their accounting and rule following, thus not being worth the hassle[2].

Anyway, there should be countless good resources available in your own country to get you started, and the good news is that at least Upwork is happy enough to accept you from basically anywhere (except the usual, like Iran, North Korea, etc.). In the country where I have my sole proprietorship all it currently takes is a single visit to the 'sole proprietorship office' and some monthly paperwork.

[1] The US is actually an interesting exception which requires you to pay taxes based on the fact that you are a citizen of the US, and then also requires you to pay to revoke your citizenship... but luckily for you you aren't a US citizen. [2] E.g. as a european sole proprietorship I need to invoice VAT to customers and next sent that VAT to the government, whilst my customers who pay the VAT subtract the VAT from the taxes they have to pay (basically it's just a complex system to find fraudsters). It's probably easy enough, but my point was just to give an example where systems can get more complex when you cross borders.