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A site writes,

If you conduct your business through a foreign LLC, your salary paid by the foreign LLC would not be subject to US Social Security and Medicare Tax. And, it would be eligible for the FEIE.

I'm an independent contractor working from abroad for a US-based company as a software engineer. I'm a US citizen who lived abroad for 2+ years and is the country's tax resident.

Is the source accurate, and if so, does it imply zero US tax (within FEIE limits)? I was unable to find any other source that says the same, including IRS.

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What they're saying is that if you're an employee of a foreign (to the US) company then you won't pay the US SE tax. The IRS agrees:

Individuals employed outside the United States by a foreign employer are not generally subject to Social Security and Medicare tax withholding

You'll need to set up a foreign company where you live and pay yourself a salary and comply with the labor laws there. There are also specific tax consequences of owning a foreign company for US taxpayers.

Talk to a tax professional(s) who're familiar with both issues. It's not trivial and may end up more expensive to you.

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  • Thanks! Could you reference a relevant article on "tax consequences of owning a foreign company for US taxpayers"?
    – user5656
    Commented Dec 2, 2022 at 0:00
  • @user5656 investopedia.com/terms/c/cfc.asp
    – littleadv
    Commented Dec 2, 2022 at 0:06

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