tax considerations for U.S. residents when working for clients abroad Thread poster: Susana Galilea
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Susana Galilea 
United States
Local time: 22:30
English to Spanish
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Hi all,
My apologies if this topic has appeared before. I am hoping some of you may enlighten me as to the tax implications, if any, for translators who reside in the U.S. when accepting assignments from clients overseas.
Also, which are the payment methods you have found work best when dealing with companies not based in the U.S.
Up to now the bulk of my work has been for the U.S. market, but I am branching out and would appreciate ... See more Hi all,
My apologies if this topic has appeared before. I am hoping some of you may enlighten me as to the tax implications, if any, for translators who reside in the U.S. when accepting assignments from clients overseas.
Also, which are the payment methods you have found work best when dealing with companies not based in the U.S.
Up to now the bulk of my work has been for the U.S. market, but I am branching out and would appreciate any educated info you may be able to share with me.
Many thanks in advance,
Susana ▲ Collapse
| | | | | It's where YOU are that counts for the IRS | Apr 3, 2003 |
Susana,
When you are a U.S. resident, where you are physically when you perform the work determines the source of the income. So if you are in Chicago when you perform the services even if the customer is in Timbuktu and pays you into an account in Ouagadougou, for the IRS the U.S. is the source of that income and it will be subject to Self-Employment Social Security Tax and Income Tax. If you physically perform work outside the U.S. you still have to declare it as foreign income to th... See more Susana,
When you are a U.S. resident, where you are physically when you perform the work determines the source of the income. So if you are in Chicago when you perform the services even if the customer is in Timbuktu and pays you into an account in Ouagadougou, for the IRS the U.S. is the source of that income and it will be subject to Self-Employment Social Security Tax and Income Tax. If you physically perform work outside the U.S. you still have to declare it as foreign income to the IRS, but it is tax exempt up to a certain amount. (But you still may have other tax obligations in the country where you did the work).
I had a similar situation and I got all of this info right from the horse\'s mouth (or the horse\'s e-mail to be precise!).
http://www.irs.gov
...and they actually do write back to you within a few days if you send a question through their site.
Good luck!
Sara ▲ Collapse
| | | | | Excellent explanation | Apr 3, 2003 |
Sara, they should archive that explanation - it\'s one of the most succinct ones I\'ve heard!
As far as payment methods go, I tend to invoice customers in Europe in euros and they transfer the money to my $ account here. So, there\'s some exchange rate risk.
Unfortunately, it\'s also expensive (I have to pay $10 per transfer received) - however, you can take those charges as a tax deduction.
Avoid checks at all costs. One customer wanted to s... See more Sara, they should archive that explanation - it\'s one of the most succinct ones I\'ve heard!
As far as payment methods go, I tend to invoice customers in Europe in euros and they transfer the money to my $ account here. So, there\'s some exchange rate risk.
Unfortunately, it\'s also expensive (I have to pay $10 per transfer received) - however, you can take those charges as a tax deduction.
Avoid checks at all costs. One customer wanted to send me a Euro check, and my bank informed me that that would cost me something like $30 to deposit and take \"at least\" 6 weeks to clear.
I plan to look into getting an online bank account with a European bank so that I can just withdraw the money from an ATM or make a single large transfer once in a while. I think there have been threads about this before if you do a search.
The one thing that is unclear to me is that people seem to say it\'s possible to open an account like this, but a bank in Germany told me that I needed to be resident in Germany to do it. I don\'t have clarification on that yet. ▲ Collapse
| | | | Julie Thompson
United States
Local time: 23:30
Spanish to English
+ ...
| offshore banks for U.S. citizens with foreign clients | Apr 3, 2003 |
According to the search engines I\'ve looked into with online facilities for U.S. clients, the most inexpensive seems to be Paritate bank. If you find one that you like, please let the rest of us know!
Quote:
On 2003-04-03 15:08, Daina wrote:
Sara, they should archive that explanation - it\'s one of the most succinct ones I\'ve heard!
As far as payment methods go, I tend to invoice custome
... See more According to the search engines I\'ve looked into with online facilities for U.S. clients, the most inexpensive seems to be Paritate bank. If you find one that you like, please let the rest of us know!
Quote:
On 2003-04-03 15:08, Daina wrote:
Sara, they should archive that explanation - it\'s one of the most succinct ones I\'ve heard!
As far as payment methods go, I tend to invoice customers in Europe in euros and they transfer the money to my $ account here. So, there\'s some exchange rate risk.
Unfortunately, it\'s also expensive (I have to pay $10 per transfer received) - however, you can take those charges as a tax deduction.
Avoid checks at all costs. One customer wanted to send me a Euro check, and my bank informed me that that would cost me something like $30 to deposit and take \"at least\" 6 weeks to clear.
I plan to look into getting an online bank account with a European bank so that I can just withdraw the money from an ATM or make a single large transfer once in a while. I think there have been threads about this before if you do a search.
The one thing that is unclear to me is that people seem to say it\'s possible to open an account like this, but a bank in Germany told me that I needed to be resident in Germany to do it. I don\'t have clarification on that yet.
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| Varying bank fees for foreign checks | Apr 4, 2003 |
yes, I also ran into the exorbitant fee quoted to deposit a foreign check (something like $25, I think it was) while the estimate given me for it to clear was more like \"up to 3 months\" .... but check out all the banks you can. Because, funny enough, while Wells Fargo in California gave me the above drivel, I\'m lucky enough to live just 3 miles from the Nevada state line and the Wells Fargo branch over there charges me just $1.50 to deposit a foreign check and it\'s credited to my account ove... See more yes, I also ran into the exorbitant fee quoted to deposit a foreign check (something like $25, I think it was) while the estimate given me for it to clear was more like \"up to 3 months\" .... but check out all the banks you can. Because, funny enough, while Wells Fargo in California gave me the above drivel, I\'m lucky enough to live just 3 miles from the Nevada state line and the Wells Fargo branch over there charges me just $1.50 to deposit a foreign check and it\'s credited to my account overnight. It pays to ask around.... alot (I must have gone into a dozen different banks). I also set myself up with a business account at PayPal.com to accept credit cards (they take something like 3% of the amount sent to you), but not too many of my clients (mostly in Germany) actually seem to go for this....
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