How do you pay SS and Medicare? I know someone in your situation who was trying to and was told you can only do that if you have US income source (which they don’t have)
I'm going to assume they didn't know what they were talking about as my employer is US based. And by legal definition, the income I'm getting from them is foreign sourced income at least 330-365 days of the year. I'm taking the FEIE deduction yearly.
Source doesn't mean what it does to the layman for intl taxes.
I didn't ask "why", I asked "how". That someone wants to pay SS and Medicare in order to accrue rates (planning to come back and perhaps retire in the US at some point, keeping options open), but was advised there is no way to accrue those rights without US income, even if they pay out of pocket.
That's what I'm confused about. It seems you were advised to engage in illegal tax evasion or something? If you do your US taxes, which is required until the day you die, those charges will simply come out of completing the forms properly. It's unavoidable.
The reason I clarified about US income is that the way you described it doesn't exist as a concept in tax law. The money amounts you're going to write down on your taxes don't ask where the person who sent you the money was seated in the world.
You file quarterly tax returns and pay the IRS. If you have a full-time job in the US your employer normally deducts and pays those taxes as part of payroll processing.
Mr X is a US citizen who lives outside the US, files and pays US taxes (with deductions taken for locally paid taxes). Mr X wants to also pay into social security and medicare (and whatever other right accrual systems) so that, if they decide to go back to the US so that -- when they retire -- they are entitled to social security benefits and medicare coverage.
The question is: How does Mr X technically pay into these systems, without having any US based income. He knows how to pay income tax (and does), but can't figure out a way to pay SS/Medicare (and doesn't).
If Mr. X has no US-source income and earns income in a country with no totalization agreement with the US he can save the money he’s not paying for Social Security and Medicare in a savings account, IRA, etc. it’s not like the government-run programs are paying high interest.
Source doesn't mean what it does to the layman for intl taxes.