Move Germany --> USA: Getting started
Thread poster: PLang
PLang
Local time: 06:54
English to German
+ ...
Jul 6, 2009

Hi!

Having worked as a freelance translator (with outsourcing to worldwide colleagues if required) in Germany I have just moved to Minnesota.

Do you happen to know how to set up the business properly over here? E.g. tax, social security, retirement pension etc.

Is there a different setup in case I will also work as a freelance photographer?

Any information is appreciated!

Thank you very much in advance!

Cheers,
Petra

[Edited at 2009-07-06 17:44 GMT]


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Kerstin Roland  Identity Verified
United States
Local time: 07:54
Member (2003)
German to English
Some tips Jul 6, 2009

Welcome to the U.S., Petra!

If you don't have a SSN already, this will be your first step and your hands will be tied until you get your number.

After freelancing without any business structure for a short time, I formed an S-Corporation, which to me seemed the most cost-effective form because all the expenses are pre-tax, thereby reducing the taxable income. In 1998, my lawyer charged about $200 for this, which I'm sure is more expensive now, but they also handle the annual report filing etc. for a fee, so it means fewer headaches for me.

Basically all my translation income goes into the "Inc" pot, and from that I pay my telephone, Internet, supplies, books, membership fees etc. and the monthly salary I pay myself. Any money that is left at the end of the year, I distribute to myself as a bonus (owner's capital withdrawal).
If you do it this way, of course you also have to pay the employer portion for your salary, but again, in my circumstances it worked out best. The employer portion is paid to a bank every month, which then forwards it to the government (IRS). You will receive instructions as to whether you need to do this monthly, or maybe quarterly, along with the appropriate deposit slips.

My city also required me to have a business license, so I applied for that.

As far as retirement is concerned, I set up a SEP-IRA with Fidelity, which is fully directed by me, meaning I can trade stocks etc. as I see fit within the boundaries that Fidelity set for me based on my experience. With a SEP-IRA, I can pay myself between 0 and 25% of the annual salary and it's tax deductible. There are plenty of other options though, such as ROTH IRAs (which you fund with after-tax income, but it won't be taxed when you take it out at retirement age) or other IRAs, so you may need to do some research. I found most the large brokerage websites very useful, e.g. Fidelity, Schwab, E-Trade tec.

I wouldn't think that the photography part would need to be handled any differently, although to keep costs down you may consider combining them somehow in one business (no need for separate checking accounts, separate filings etc.).

I'm sure other translators have different structures (e.g. LLC) and it all depends on your circumstances what will work best. I found the Internet very helpful in researching what I wanted, and my lawyer also gave me good advice in which structure to choose.

I hope this answered some of your questions. All the best,
Kerstin


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Tomasz Poplawski  Identity Verified
Local time: 06:54
English to Polish
+ ...
A few additional points Jul 7, 2009

1. You don't need an attorney to establish an S-Corporation. A CPA can do it, usually for much less.
2. The common wisdom is that the corporation only makes sense if you a making $60-70k a year or more, otherwise tax advantages (your CPA can explain it in details) will vanish because of the additional accounting expenses. I don't know too many people doing their own corporate taxes. No fun, and mistakes can be costly.
There is nothing wrong with being a sole proprietor of your business until you reach that limit.
3. I hope you are already used to checks, as oppose to wire transfers. That's how practically all clients pay here.


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Alex Boladeras  Identity Verified
Indonesia
Local time: 19:54
English to Spanish
+ ...
How did you do it? Jul 18, 2009

Dear Petra,

I don't mean to be nosey but how did you do it? I mean, moving from Germany to the US as a freelance translator. I'm also interested in making the move to the US either to work there on my own or, perhaps more realistically, as part of a company (see my post above). Any insights would be much appreciated.

Thanks,

Alex


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PLang
Local time: 06:54
English to German
+ ...
TOPIC STARTER
THANK YOU! Jul 18, 2009

Dear Kerstin,

thank you so much for the detailed information! Very helpful! And an excellent starting point for doing further research in the web.

Another option I am currently taking into consideration is working for a local company. Would eliminate resp. make many administrative tasks much easier and would allow me to learn the local business...

That's also the reason for answering a bit late - brainstorming and brainstorming...


Dear Tomasz,

Re your information: The key is estimating the possible turnover also taking into consideration the photography part. Yep - the brainstorming...


Dear Alex,

oh, actually, I did not do a lot. My husband was transferred by the company he is working for to the US. Sorry, that I can not supply a helpful "How to...".


This really is a tricky situation!

I wish you a wonderful weekend!

Cheers,
Petra


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