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Iโm an American who has been a sole proprietor (freelancer) for a long time. Iโve occasionally hired American subcontractors, who I send 1099s in January. What do I need to consider tax-wise or in any other way financially if I want to hire a subcontractor from abroad?
Iโm also interested in knowing more about any roadblocks potential clients from other countries would have in contracting to me. I havenโt done business across borders yet. Thanks.
You donโt withhold for US contractors. They are required to report and pay their self-employment tax. You โreportโ it on the 1099 just to let the IRS know that you had paid them, in case they decide NOT to let the IRS know! That is your only obligation. If you paid them less than $400 in a year, you donโt even need to file the 1099 for them. If you pay them via Paypal, you also donโt file the 1099 as all the tax docs go through Paypal now. If you hire a foreign subcontractor, just write it off as an expense and let them deal with their own countryโs tax system. (they might not even have to declare or pay on it if they live somewhere else and are from a country that doesnโt make you pay taxes when you arenโt residing in your home country).
Right - I knew that about US independent contractors, as Iโve hired them before. However, thatโs not totally correct about foreign contractors โ you have to get them to fill out a W8-BEN if you read the link I posted above (you have US contractors fill out a W9). Otherwise, yes, looks like their fees should be handled the same as US contractors.
OK, I just found this: http://intltax.typepad.com/intltax_blog/2012/10/form-1099-for-payments-to-foreign-contractors-for-services.html
What confuses me a little still is that you donโt need to withhold tax anyway for any independent contractor, even inside the U.S. (thatโs only if they are a W2 temp employee, which I donโt hire). So Iโm still not getting this emphasis on withholding, but sounds like itโs fairly simple to subcontract to a foreign vendor. Correct me if Iโm wrong, anyone.
I donโt know what that means?
And wow, this is pretty confusing: https://www.irs.gov/Businesses/International-Businesses/U.S.-Withholding-Agent-Frequently-Asked-Question
@opwagner - would you happen to be reading and generous enough to summarize what I need to worry about in hiring a foreign vendor?
In many countries there is โwitholding taxโ of foreign contractors.
Itโs in most french non-double-taxation agreements (retenue ร la source) but may not be enforced too much.
Apparently Portugal is very efficient at enforcing this taxation.
my 2 cents 
Hi everyone,
I would love to hear what you'd like me to build next on Nomad List, or any other product/feature feedback ideas you have.
It's been 6+ years now but I'm in this for the long term and with the boost remote work got last year it's even more exciting to work on Nomad List than ever.
Current roadmap is here: twitter.com/levelsio/status/1363204985488572417?s=20 and pbs.twimg.com/media/EusS9PKXEAUR8xp?format=jpg&name=4096x4096
The next products/features I have planned:
- ๐ Rebase: visa, residency and immigration services for remote workers
- ๐Courses: learn the steps how to go remote and travel/relocate
- ๐ Gov liaison: diplomacy services to the governments to help us lobby for nomads and for them to attract remote workers
Thanks a lot!
What are the best places right now in the Caribbean/LatAM? (Also cheapest flights/accommodation?) Asking from the US.
As part of signing up for this website I was hoping I would come across a list of Visa and/or Residency requirements by country ideally in a table format to assist with decision making. Does anybody recommend any other websites that might present the information in this format (or Google Spreadsheet)?
I love living in walkable areas of town. I can always find them. But now I'm wondering where in the world are the most walkable places? I'm imagining walk streets (no cars), zoning allowing both business and residential, parks or beaches ,etc.
Hi guys,
After the Netherlands, the Bay Area, Colorado and being on the van life for 8 months, I am now in Sedona, AZ with a few other digital nomads. We are sharing a home here and are wondering if there are more like minded people in the area.
We do a bunch of hikes and campouts in the northern of Arizona. If you would like to connect with us, please do so :)
Val
Has anyone figured out a way to get setup with a virtual number and internet connection anywhere you go?
Hi everybody. I live and work in Germany and want to go to Canary Islands for 6 months to work from there. I'm going to keep my current job, just change the "home" in the home office part of things. Are there any tax issues I have to be aware of? I was reading about becoming a residence after 183 days, thus having to pay taxes there plus my employer having to register there. Does anybody know how it works exactly? Thanks a lot!
Winter is coming and Iโm feeling the ache of travelling after being stuck in the same place since the Pandemic started. Wondering if anyone is travelling right now? If so, where are you currently located and how is the situation where you are?
Heyo folks! The idea to open up an own coworking space in Malaysia has been on my mind for quite a while and I would like to reach out on foreigners being a business owner/co working space owner in Malaysia, there are a lot of questions that would follow up but most importantly is to reach out to someone with experience.
Ideally would be someone who runs a coworking space in Malaysia, second best would be to just come in touch with a foreign business owner in Malaysia.
Cheers
Yamin
Iโve done a lot of research on foreign currencies and which are good to holdโฆ its pretty complicated. it seems obvious, swiss franc, hong kong dollarโฆ but when you look at if you want to open a swiss bank account they require a very high minimum balance, can charge you just to hold swiss francs, etcโฆ anyone have a deep understanding of this stuff?
Have any of you nomads been approved for a mortgage in a foreign country?
I am a UK citizen, and now that I work online Iโm interested in maybe buying a property somewhere else in Europe. I donโt particularly want to live in the UK, and house prices are ridiculous here anyway. I would much rather buy a little apartment in one of any number of European cities; just somewhere to have as a base in between travelling.
Has anyone ever done such a thing? How did the process work? Which country did you buy property in and how straight-forward was the process?
Whatโs the latest on how to avoid ATM/bank/foreign transaction fees? How do you keep track of money spent when youโre never quite sure of the exact exchange rate? I normally use YNAB to keep on top of my budget here at home, but Iโm dreading keeping tabs on all the minute foreign transaction adjustments abroadโฆ
Iโm looking at this to check out some of the banking options: http://thepointsguy.com/2014/02/the-top-11-checking-accounts-for-avoiding-foreign-atm-fees/
Have you used any of these?
So I had a client go silent on me recently as soon as I brought up the topic of delinquent invoice payment. We typically speak daily, and otherwise have an excellent relationship. They love the work I do (at least, their praise seems authentic and on target). I love the work I do for them. We had a verbal agreement that I would be paid within 2 weeks of invoice. My contract allowed for 30 days / 4 weeks. At the second invoice, they went into 6 weeks without paying me.
I asked about it, and got no information in return. I kept sending emails twice a week to politely ask for information about what the issue was, and when I could expect payment. I received an extremely brief non-answer once, and more silence. I began to explore what other measures I could take, I honestly believed I had been scammed. They owed me a 5-figure sum (USD).
I work on about 8 different websites/codebases for this client. Each has a git repository, with a full history of all the other contractors, and naturally, their emails. I have paired up with a few of them on some projects (front end / back end dev relationships), so I know some of them on as personal a level a remote dev coworker can have.
I considered extracting all the emails from each project from the last yearโs worth of commits, and then emailing each one individually to ask if theyโve ever had payment problems with this client. This would also obviously share information that I had not been paid for a time that violated the terms of our contract. We have a policy of being able to freely contact each other, via slack, or email, so its not like emailing them alone is violating some kind of privacy term on their end (or mine).
Would it be illegal for me to discuss this information with the other contractors? This concerns businesses incorporated in the USA. They are an LLC, if that matters. Could my client have grounds to seek some kind of legal retribution if they found out I did that? I think its only fair that they all know if I had been ripped off, and also may want to band together to fight the client if they too had also been ripped off. There is nothing explicitly stated in my contract that says I cant share information about my experience with them with other contractors (or anyone, really, outside of technology-NDA sort of things).
Note: I was certainly going to report them to Glassdoor, Freelancerโs Union, BBB, and any other institution that I could, if this went on much longer. They finally caved after the 5th email or so, and paid me (again, without speaking to me about it, which is what bothers me the most). I also was going to start resorting to phone calls AND email bombardments (always polite :-P) first, before taking these next steps. This happened with the 2nd invoice in our relationship, which concerned me greatly, since I was told when hired that they had funds to pay me for even more hours than I was putting in. I am aware of the frequency with which freelancers get ripped off by clients (FU reports ~40%). I refuse to tolerate it, especially if we have been told otherwise, and am a strong advocate (re: activist) for workersโ rights in general. Just an aside, Id have been far more tolerant, had they chosen to discuss things with me, and let me know what was happening - the silence drove me towards this aim.
Tricky or really dumb question ahah.
So โฆ I know that you can create a company in order to get the nationality but you need to invest a lot (depending the country 20K$ +).
I also know that you can get a visa if a company hires you.
So can you go in a country (picking Colombia as an exemple), pay 100$ to create a company and hire yourself after?
Or can you ask somebody (a friend) to create a company and hire you in order to give you a visa.
Does this visa last until you quit your job or is it just temporary (6 months)?
If you already have a company (letโs say you paid 20ยฃ for a UK company), can you just create a branch in a foreign country and give yourself a job there?
Hi DN community! Iโm going to spend 4 month in US and wondering if somebody can recommend me cheap, but reliable=), mobile operator. Requirements:
Cheers!
Hello everyone,
Iโm looking to obtain a couple of credit cards with no foreign transaction fees and keep seeing Capital One as highly recommended by DNs. However, when reading the reviewed for their Venture One card I see that people say the company declines most foreign transactions and that you cannot call they ahead of time to let them know youโre traveling in order to not have the card declined. Has anyone run into this problem?
Thanks!
I am a US citizen working for a US company living abroad. I plan to qualify for the foreign income exclusion this year and Iโm wondering if it would be ok to adjust my taxes now so I have less withheld and get paid more now. I could use an extra $1200 cash a month instead of paying it to taxes and having to wait to get it back next year. Does anyone else do this? Thanks!
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