Avoiding Double Taxation Of Income With Respect To Social Security Taxes With Totalization Agreements
The United States has entered into agreements, called Totalization Agreements, with several nations for the purpose of avoiding double taxation of income with respect to social security taxes. As of this time, the following nations have entered into Totalization Agreements with the United States:
- Czech Republic
- Slovak Republic
- South Korea
- United Kingdom
International Social Security agreements, often called “Totalization agreements,” have two main purposes. First, they eliminate dual Social Security taxation, the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings. Second, the agreements help fill gaps in benefit protection for workers who have divided their careers between the United States and another country. The agreements assign coverage to just one country and exempt the employer and employee from the payment of Social Security taxes in the other country.
Determining Eligibility For The Totalization Agreements
Determining eligibility for the totalization agreements and required reporting is based on proper analysis and the individual facts of the taxpayer. If you need help with filing a U.S. tax return and are a resident of a country that has entered into a “Totalization” agreement with the U.S., request a tax preparation quote today to get started with a tax professional experienced in totalization agreements.
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