TAXES - Foreign Contractor
 

Open question where I assume you are NOT liable for any information you give as an answer (for those here who just love to sue or not answer because of a fear of being sued).

If you contract with a designer who lives in Romania, how do you handle the payments you paid such a person on your taxes? Say if you paid them $3500 for work here and there... How do you remove it from your profits?

It's an expense, hopefully you have some sort of a receipt to prove the expense.
WG

The same way you write off the phone bill.

Whichever way you paid them, document it what it was for etc.

Most people here that you make Epassporte or Paypal payments to don't usually give you a receipt...

Anyone got a for instance of how they would handle sample situations?

Like say you see someone on here post:

Banners and Buttons Sale!

Today and today only you get banners and buttons done at 1/2 price, see my sig for current full pricing!

Say you take him up on that offer and pay him via Epassporte $100 total.

How do you personally prove the expense?

Doesn't Epass have a record of it? Print it, I'd say. :2 cents:

Print out your epass transactions as they happen... but make sure that you have also been declaring your epass income, otherwise you are opening the door to being investigated!

As for the payment, it isn't hiring someone, it is work for hire contract, which is a direct expense (I have a particular accounting code for website design, another for content, etc). You didn't hire an employee, you just bought a finished product.

Ask for an invoice

Print out the transactions, and that is what you use. You may get audited, but it can be won.

Ask for a receipt. Or make sure the paypal / epassporte purchase shows what was bought.
WG

I always ask for an invoice.
I also print out paypal and epass information.
I also include notations in the paypal or epass information box when sending money.

In my opinion I believe you should get an invoice, print your epass transactions, and attach them to a 1099 form. At least that should cover you.

I did that a lot lately but not a lot in the beginning of the year...

So I am wondering about generating that data before tax time...

Perhaps I need to go back now and ask for certain people to generate an invoice for me...?

You may also want to look into getting a bookkeeper. There's some online bookkeepers that can compile your books for you so everything is documented and ready for your tax preparer.

why pay him via epass? keep epass secret :1orglaugh

why not pay him direct from your bank then at least you have an additional record on your statements no?

Print the Epass reciept and write any info you need on it and put the date of the transaction like you did the day it happened.

Example - Paid Joe Smith for banners 2/21/2006.

Perfectly legal.

Piece of cake, simply ask for invoice.
You may want to also enter into a contract between you two. One part of the contract could say something like:

Acknowledgment. DESIGNER understands and agrees that: (a) DESIGNER will not be treated as COMPANY’s employee for federal tax purposes; (b) COMPANY will not withhold on DESIGNER’s behalf any sums for income tax, unemployment insurance, Medicare, Social Security or any other withholding pursuant to any law or requirement of any governmental body, or make available any of the benefits afforded to COMPANY’s employees; (c) All of such payments, withholdings or benefits, if any, are DESIGNER’s sole responsibility; and (d) DESIGNER will indemnify COMPANY and hold COMPANY harmless from any and all loss or liability arising from COMPANY’s failure to make such payments, withholdings and benefits, if any.

Is There any better there???

Really??

Really??

Really.. thats fantastic work

TopListBlog_Com, great input buddy

Our rule is no invoice, no payment. plain and simple.