US Tax Filing for Freelancers and Consultants Abroad
US freelancers and consultants living abroad benefit from FEIE on income tax, but face a key complication: self-employment tax (15.3%) is not eliminated by FEIE. This surprises many expat freelancers. Combined with Schedule C deductions, multi-currency income, and FBAR requirements, a well-prepared return can make a significant difference to your total tax bill.
Get started with your filingWho this is for
- ✓ US citizens or green card holders working as independent freelancers or consultants abroad
- ✓ Self-employed professionals — developers, designers, marketers, writers, coaches
- ✓ Consultants with contracts in multiple countries paying in multiple currencies
- ✓ Freelancers on platforms like Upwork, Toptal, Fiverr, or direct client contracts
- ✓ Those who run a sole proprietorship or single-member LLC while living abroad
What this filing may involve
Every situation is different. The forms below commonly apply — your specific filing may vary.
- 1 Form 1040 with Schedule C — self-employment profit and loss
- 2 Schedule SE — self-employment tax (15.3% on net profit, not eliminated by FEIE)
- 3 Form 2555 — FEIE to reduce income tax on foreign-earned income
- 4 FinCEN Form 114 (FBAR) — for foreign accounts used for business or personal banking
- 5 Form 8938 — FATCA if foreign financial assets exceed applicable thresholds
Documents usually needed
- 📄 All invoices issued and income received (by client, currency, and date)
- 📄 Business expense records — software, equipment, coworking, travel, subcontractors
- 📄 Foreign and domestic bank account statements
- 📄 Records of days spent in each country during the year
- 📄 Prior year Schedule C and tax return
How Nomadic.Tax works
AI-assisted preparation with licensed professional review — every time.
We prepare Schedule C with all qualifying business deductions to minimise net self-employment income
FEIE is applied to reduce income tax on foreign-earned profits
Self-employment tax is calculated on net profit — we model deductions to reduce this where possible
A licensed CPA reviews your return for both income tax and SE tax optimisation before filing
When human review matters
- ⓘ SE tax applies to 92.35% of net self-employment profit regardless of FEIE — it's a significant cost many overlook
- ⓘ Multi-currency income must be converted to USD at IRS-approved exchange rates
- ⓘ Home office and travel deductions can reduce both income tax and SE tax exposure
Relevant plans
Choose the package that best fits your situation, or view all plans.
- ✓ Everything in Standard
- ✓ Schedule C & SE for self-employment
- ✓ Multiple income sources and currencies
- ✓ Everything in Premier
- ✓ Foreign Earned Income Exclusion (Form 2555)
- ✓ Foreign Tax Credit (Form 1116)
- ✓ FBAR filing (FinCEN 114) included
Frequently asked questions about US Tax Filing for Freelancers and Consultants Abroad
Can I deduct business expenses against my SE tax?
Yes. Deducting legitimate business expenses on Schedule C reduces net self-employment income, which in turn reduces both income tax and self-employment tax. Maximising allowable deductions — software, equipment, coworking, home office, professional development — directly reduces your SE tax bill.
Should I form an LLC or S-Corp to reduce SE tax?
An S-Corp election can reduce SE tax by allowing you to split income between a salary (subject to SE tax) and distributions (not subject to SE tax). However, it adds compliance costs and is only worthwhile above a certain income threshold. We can model the breakeven for your situation.
What if clients pay me in foreign currency?
All income must be reported in USD. We convert using IRS-approved annual average exchange rates (or spot rates for specific transactions where required). Multi-currency income is a standard part of our expat freelancer filing process.
Who is this for?
Browse by your situation for tailored guidance and the right package.
