I opened an S-Corp in the US, which has US clients. I am working from overseas however. I believe the US would consider my salary as foreign earned income. Would the S-Corp's profit/loss also be considered foreign income or US income? I would like to open a SEP IRA or individual 401k next year if that is allowed. I also have not paid myself a salary this year since I do not expect to be profitable until next year. Am I required to pay myself a salary? This would lower my US taxes since my salary will be foreign earned income and the S-Corp loss might offset US income I had in the US before I lost my job and moved overseas (making me ineligible for unemployment regardless of how much payroll taxes I pay).
Note that the S-Corp is losing a little money right now. Paying myself a salary might actually save me US taxes, because of the foreign earned income exclusion. My US based S-Corp would have a larger loss and the US would not be able to tax my salary. My payroll taxes should be paid to the foreign country based on the tax treaty.
Note that the S-Corp is losing a little money right now. Paying myself a salary might actually save me US taxes, because of the foreign earned income exclusion. My US based S-Corp would have a larger loss and the US would not be able to tax my salary. My payroll taxes should be paid to the foreign country based on the tax treaty.