February 18th, 2004, 04:13 AM
do freelance coders need to pay income tax?
do freelance coders need to pay income tax? in the US. and outside the US.?
February 19th, 2004, 10:57 AM
Taxes are only due on US income
In general, if the income relates to a transaction in the US, you have to pay taxes on it. There is a rule that exempts income for expatriot Americans up to about $75,000. And, if you're a national of another country and never set foot in the U.S., it is highly debatable as to whether you can be forced to pay income tax. Your best bet is to 1) seek a good accountant if you're making a lot of money and 2) structure your pay as an independent contractor, so that it is not deducted at the source. There are complex rules that determine whther you are an "employee" or "independent contractor," but one sure way to be judged an employee is to get paid like one!
February 26th, 2004, 12:10 AM
First off you need a good CPA because the rules are scetchy at best. One thing we did is form an LLC. Then when we get contracts, its goes to our company so its a Business to Business dealings. Since we are taxed as a General Partnership, we fill out the 1085 showing our profit/loss (it was a loss on paper last year thanks to start up expenses), then pass it through on our personal 1040 forms.
If you do work as a contractor, make sure you have your own equipment. If you are going to need special software, build that into your bid. Also make sure you spend more than 50% of your time off site. That will help with the distinction.
Why? Because Forms just look cooler in OS X...
Dutch, it's like German...but not!