Has anyone had experience working for a foreign government in the US, such as an embassy or the UN. I am interested in a position at an office of a foreign government. During preliminary conversations, they explained that as an employee of a foreign government, they would be unable to withhold taxes or social security. Therefore, I would need to manage this as a self employed person and make quarterly payments to the IRS and social security. I have checked the IRS and SS sites and it does confirm that I would need to do that. This is making me think about what else I don’t know. Such as 401K and medical benefits which they do offer. How would that work?. I am sure I will ask them if they do offer the position but I think I would like to know what I don’t know ahead of time. I would hate to get excited about the job and find that the situation would not be ideal.
If you have worked under this situation, please give me some advice.
I can’t answer your question, but I do suggest you thoroughly understand what benefits you will get and how they will need to be taxed before accepting any job. Sometimes benefits make huge differences. If an employer pays for health insurance, for example, or you get a certain percentage of your salary toward retirement, those are important things to know to compare offers or to consider the overall compensation.
I find it very hard to believe that they would be allowed to hire but not be required to withhold taxes. You definitely need this all written out. Also, keep in mind that if they do consider you an independent contractor, they will report your earnings, including benefits on a 1099 and you will have to not only pay Federal and state taxes on it, but social security and medicare including the employer’s portion which would essentially double your social security and medicare costs. Look into this carefully.
I work as a freelancer for a foreign company, and I’m pretty sure I do not receive a 1099 from the company. I just add up all the income at year’s end and report it as part of my self-employment income (and, obviously, pay extra taxes on it).
3bm103, foreign countries don’t have to follow US laws as the consulates and embassies are considered their own countries. Most hire workers from their own countries so do not do withholding for the IRS.
I’m rather surprised they do offer 401k and health insurance, but it may be that they have to have some kind of insurance for their own employees working here so just get a group plan.
It’s true, they do not need to issue a 1099. I am also thinking that there is no unemployment protection if they were to close that office or eliminate the position.