Thanks, I appreciate the reply. So to clarify:
1) My wife is a Spanish teacher. She used to do 100% in-person classes but with COVID she had to move her business online. She now has students throughout the world, hence the need to accept payments via PayPal.
2) 100% of the work was done outside of the US. As far as I understand, that means that all of the money would be considered non-US source (also, many of the payments come from people outside of the US).
3) Personally, I don't see why this money would be considered taxable. So my goal is to avoid paying taxes on it in the simplest way possible.
Seems like what I outlined above (expense the income as contractor expense and have my wife fill out a W-8BEN would work) but I'm not 100% sure.
