artmaknev Posted November 14, 2012 Share Posted November 14, 2012 Hello, This question is for US companies and freelancers. I outsourced some 3d modeling work abroad and was wondering how will this affect my income tax, do I have to file any forms to to show that I paid somebody abroad? Do I have to get information from the person I hired (address, ID numbers?), and do I have to send them any IRS forms to sign like we do here with W9? Thanks, Art Link to comment Share on other sites More sharing options...
Jason Matthews Posted November 28, 2012 Share Posted November 28, 2012 I am by no way an authority on the matter and I have not done this myself, but It seems like it would be a real pain to try to tax someone outside of the US, especially since the person does not follow our tax laws nor would he legally be responsible for paying taxes to a country that he is not a citizen of. Instead, write it off as a business expense and make sure you save the documentation from it. Link to comment Share on other sites More sharing options...
artmaknev Posted November 29, 2012 Author Share Posted November 29, 2012 I actually figured out with my accountant, the form is called W-8BEN, it is only for record keeping to prove that you paid a foreign individual, and should not be filed with your taxes. But you are right, I will just write off this amount as expense, since the individual doesn't have to pay any US taxes on this amount, it is my responsibility to either deduct tax upfront or to write off as expense. Link to comment Share on other sites More sharing options...
heni30 Posted November 30, 2012 Share Posted November 30, 2012 Yeah, I had to use overseas work last year and the IRS told me to put it in box 11 of the Expenses part of schedule C. As long as you get an official looking invoice from them or say, a paypal payment receipt everything should be ok. Link to comment Share on other sites More sharing options...
Wil Vaughn Posted November 30, 2012 Share Posted November 30, 2012 Next time you guys need to outsource something please feel free to contact me as I would love to help. No need in sending business across the sea. I usually will do the first project at a discounted rate to gain trust & confidence. Good luck to you guys! Wil Link to comment Share on other sites More sharing options...
Jason Matthews Posted November 30, 2012 Share Posted November 30, 2012 Good to know, Art. Link to comment Share on other sites More sharing options...
artmaknev Posted November 30, 2012 Author Share Posted November 30, 2012 Next time you guys need to outsource something please feel free to contact me as I would love to help. No need in sending business across the sea. I usually will do the first project at a discounted rate to gain trust & confidence. Good luck to you guys! Wil Hi Wil, can you share your portfolio? I was looking for specifically furniture modeler, who can make highly detailed classical style furniture on a very quick deadline, like 10 pieces in 2-3 days, it was extremely difficult to find anyone here, so I had to resort to evermotion forums. Link to comment Share on other sites More sharing options...
dougjohnston1 Posted November 30, 2012 Share Posted November 30, 2012 Hi Wil, can you share your portfolio with me? I have a project coming up with alot of detailed modeling. Link to comment Share on other sites More sharing options...
Wil Vaughn Posted December 3, 2012 Share Posted December 3, 2012 hi wil, can you share your portfolio? I was looking for specifically furniture modeler, who can make highly detailed classical style furniture on a very quick deadline, like 10 pieces in 2-3 days, it was extremely difficult to find anyone here, so i had to resort to evermotion forums. just shoot me your e-mail art. Link to comment Share on other sites More sharing options...
Jeff Mottle Posted December 3, 2012 Share Posted December 3, 2012 As a Canadian I've had to complete dozens of these W-8BEN forms when doing consulting work with US companies so the US government does not try to tax my fee. Has to be the only government in the world who tries to tax your money at full rates in advance of actually filing taxes. It can be a real PITA when dealing with US companies who don't know about this form and try to pre-tax you. Link to comment Share on other sites More sharing options...
Wil Vaughn Posted December 4, 2012 Share Posted December 4, 2012 Our ancestors fled England to start a new world over here only to end up taxing the people to death. All the while massing an uncontrollable debt. I do not uderstand it. Link to comment Share on other sites More sharing options...
Jeff Mottle Posted December 4, 2012 Share Posted December 4, 2012 Our ancestors fled England to start a new world over here only to end up taxing the people to death. All the while massing an uncontrollable debt. I do not uderstand it. Not to take this thread massively off topic, but I'm sure taxes would be a lot less if the US were not spending a Trillion dollars a year on the military. That is certainly one way of understanding it. Back on topic, for those that are outside the US and doing business there, you can avoid any US taxes or tax filing requirements by ensuring you A) complete the aforementioned form b) Ensure you don't have any presence in the US (which includes equipment, hardware, servers, staff etc). If for example you owned servers for your website and co-located them in a US you'd be subject to filing and likely paying US taxes on any money you earn in the US. Leasing/Renting is not considered owning property as you don't own the property. It can also be really helpful when doing business in the US to have a US tax ID number. It only takes a phone call. Just make doubly sure they put on file that you have no filing requirement otherwise the IRS will send you tax forms. Having this number has made doing business in the US as a lot easier at times for me. Link to comment Share on other sites More sharing options...
artmaknev Posted December 4, 2012 Author Share Posted December 4, 2012 As far as I remember, ever since I came to US back in 1997, they always had high taxes even without wars, but from what I experienced is that taxes are higher for middle class than for any other class in US. Poor don't pay tax, while rich pay 3 times less than middle class, so seems like all the burden falls down on middle class, and makes it really hard for this class to climb up the pursuit of happiness ladder... Anyway, Jeff, thanks for clarifying that you also have used that form before, now I am sure that this form is all I need for foreign freelancers. Link to comment Share on other sites More sharing options...
Wil Vaughn Posted December 4, 2012 Share Posted December 4, 2012 Agree, Don't get me started. Link to comment Share on other sites More sharing options...
Nic H Posted December 4, 2012 Share Posted December 4, 2012 I thought the US had relatively low income tax? Compared to Australia anyway. Link to comment Share on other sites More sharing options...
Wil Vaughn Posted December 4, 2012 Share Posted December 4, 2012 On adverage US income tax is around 23% depending on marital status and # children which Obama wants to remove those tax breaks as well. That is not so bad if that was all,,, it's the tax on fuel, energy, sales tax, cell phone usage, internet usage, extra tax on booz & smokes, (I don't smoke) but still there is a tax on every thing. If my Mom wants to leave me money when she dies I have to pay tax on the money she already paid tax on and when I want to spend that money, I have to pay tax on what ever I buy. As for outsourcing business to another country,,, I wouldn't mind if who ever lands the contract isn't under cutting the rest of the world, I think it's great if the abilities are there & price is always a factor, but when a person or company is pulling business away from everyone else just because they are under cutting the market, I have a problem with it. My wife has to deal with it in our own country in the photography industry when you have every house wife in the area getting a low end Canon rebel and wants to start taking pictures for a fraction of the price of a real professional or for free in some cases. It just destroys the market and removes value in any situation. Just my 2 cents. Link to comment Share on other sites More sharing options...
Umesh Raut Posted December 4, 2012 Share Posted December 4, 2012 Lest this not be treated as off topic as well, but we all from around the world gather here not only to learn from the veterans but to showcase our work for c&c and expectations of overseas work opportunities also. I am in Mumbai, India and am looking forward to just that, freelance and relocation, both options open, from anywhere in the world. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now