What are totalization agreements and can they reduce my LLC's payroll tax obligations?
I'm from Germany and I own a U.S. LLC. I'm considering moving to the U.S. temporarily to work in my own business. A friend mentioned totalization agreements could help me avoid paying Social Security taxes in both Germany and the U.S. simultaneously. How do these agreements work? Which countries have them with the U.S.? If I send a German employee to work at my U.S. LLC temporarily, do they pay into the U.S. or German system?
Related Questions
Everyone keeps mentioning totalization agreements when payroll crosses borders. What file should we actually maintain if we think one applies?
Our founder is from Germany and now works partly in the United States for the company. Several advisers have mentioned a possible totalization agreement angle for Social Security coverage, but so far ...
If wages are treaty-exempt for income tax, can payroll still have to withhold FICA?
One of our advisers says a treaty may reduce or eliminate income-tax withholding on a founder's compensation, but our payroll provider is still talking about Social Security and Medicare taxes as thou...
Can a foreign employer really owe U.S. Social Security and Medicare withholding for work performed in the States?
I always thought Social Security and Medicare withholding was mostly a domestic-employer issue, so I was surprised to read that a foreign employer can still have U.S. payroll obligations when services...
LLC formed in Wyoming, employee working from Ohio — which state gets the payroll registrations?
My LLC is registered in Wyoming (I'm based in South Korea, no US office). Our first employee is fully remote and works from her home in Ohio. Wyoming has no income tax, which is partly why I formed th...
Does self-employment tax apply to non-resident alien LLC owners in the U.S.?
I'm a non-resident alien from South Korea who owns a single-member LLC. My accountant mentioned something about self-employment tax being 15.3% on top of income tax. That seems really high. As a non-r...
If we think a totalization agreement may apply, do we need the certificate before the first paycheck?
One adviser says yes because payroll should be built around real documentation, while another says we can just assume the agreement applies and fix the file later if anyone asks. Those are very differ...
My spouse is on J-2 and payroll said J visas are exempt from FICA. Is that actually true for a J-2 spouse?
The payroll team seems to be treating every J visa as though it falls under one tax rule, but the IRS pages I found suggest spouses and dependents can be treated differently from the main J-1 scholar ...
Can I appoint someone in the U.S. to handle my foreign-owned LLC's payroll tax filings using Form 2678?
I'm a foreign owner of a U.S. LLC and I live overseas. Managing payroll tax deposits and filing Form 941 from abroad is difficult. I heard about Form 2678 that lets you appoint a fiscal agent to handl...
My H-1B wages may be treaty-exempt for income tax. Can payroll still have to withhold FICA anyway?
The treaty conversation is making everyone think the wage file is either fully exempt or fully taxable, but payroll seems to be a different system with its own rules. I am on H-1B, and I do not want t...
I'm a foreign LLC owner living in the U.S. — do I owe 'nanny tax' for my household employee?
I'm a non-resident alien who owns a U.S. LLC and I recently moved to the U.S. on a work visa. I hired a housekeeper who comes twice a week and I pay her $500/week in cash. A friend told me I might owe...
Have a similar question?
ForeignLLCTax members get expert answers with IRS citations. One CPA consultation costs $200+. Full access is $9.99/month.
Become a Member — $9.99/moDisclaimer: All content on ForeignLLCTax.com is created by a tax professional and is provided for general educational and informational purposes only. It does not constitute tax, legal, or accounting advice, and should not be relied upon as such. Every tax situation is different — for advice specific to your circumstances, please consult a licensed CPA, Enrolled Agent, or tax attorney. By using this website, purchasing a subscription, or accessing any tools or services, you acknowledge that no client-professional relationship is established between you and ForeignLLCTax.com or its operators. This website is not affiliated with the IRS.


