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jepure
New Member

I am living in the U.S. and will soon work as an independent contractor for a Chinese company. Will China tax my income that's sent to me via wire transfer each month?

The Chinese company is solely located in China. As I stated, I'm an independent contractor/ US citizen, living in the US where I'll do all of my work. If I am subject to Chinese tax, will I be able to regain that to avoid the "double tax" law.

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1 Reply
JohnH2
New Member

I am living in the U.S. and will soon work as an independent contractor for a Chinese company. Will China tax my income that's sent to me via wire transfer each month?

No.  If you are an independent contractor,  you are not an employee.  Your Chinese principal will not give you a W-2.  You should keep your own records of your income and expenses and make estimated Federal tax payments during the year.  You will file your business income and expenses, if you are a sole proprietorship, on your Schedule C.  This form is part of your Federal 1040 form.  If you have a large number of expenses, we suggest the Home & Business level of TurboTax for your Form 1040 and your Schedule C.  The Deluxe and Premier levels of the program will produce a simpler Schedule C-EZ.

Article 22 of the U. S. China Tax Treaty discusses the elimination of double taxation.  This document is available at the following link:  https://www.irs.gov/pub/irs-trty/china.pdf.  

Under Article 22, the U. S. will allow a credit against U. S. tax for income taxes paid to China on the same income.  This will eliminate the double taxation.

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