Need Advice for Filing Taxes

[rochelleclaire 0]

Hi everyone. I'm looking for some advice on filing taxes keeping in mind my future i-134 that I will have to fill out. I am hired as an independent contractor for an online teaching company. I have a contract with that company and get paid through them, but am technically self-employed. I was looking at taxes and saw that I would have to pay in around $3,000. I talked to a tax lawyer who said I could start an LLC which would make is so I wouldn't have to pay the self-employment taxes. He also said I can claim this as foreign income as I lived the entire year in the Philippines with my fiance. With his plan, I'd have to pay next to nothing. However, I'm slightly worried about them not liking this when looking at my tax returns for the i-134. Does anyone have thoughts on this, previous experience, or suggestions? TIA!

[payxibka 10,045]

There are flaws to the advice you received.  If you create a LLC then you become an employee of the LLC.  You will should or need to draw paychecks from the LLC .  Paychecks are subject to FICA.  You can try to draw all the funds out as distributions or dividends (passive income) but since it is a company that you are an active participant, you would be hard pressed to prove that it is not payment for services rendered to the LLC versus simply an investment.

[rochelleclaire 0]

10 hours ago, payxibka said:

There are flaws to the advice you received.  If you create a LLC then you become an employee of the LLC.  You will should or need to draw paychecks from the LLC .  Paychecks are subject to FICA.  You can try to draw all the funds out as distributions or dividends (passive income) but since it is a company that you are an active participant, you would be hard pressed to prove that it is not payment for services rendered to the LLC versus simply an investment.

This is all very confusing for me. From what I understand, as I was not in the US at all for the entire year, I can claim that as foreign earned income and therefore not have to pay income taxes. I'm not sure if that will raise red flags for my visa, though. 

Edited February 18, 2018 by rochelleclaire

[payxibka 10,045]

Possible.  There are limits and if the foreign tax is less than the US tax on the same income you may not get away with zero