How to Report Freelance Income Obtained from Compa...
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Level 2

How to Report Freelance Income Obtained from Company Outside of the US

I work as a freelance artist in California. This year, I started working as a freelancer/contracted artist for a studio that is based in Canada. They pay me monthly and, in total, have paid me over $600. I know that in the US, freelancers need to get 1099 forms from companies that pay them over $600. I have a few questions about how to report this income.

1. What form do I use to report freelance income obtained from a company outside of the US?

 

2. Does the studio still need to send me a 1099 form? 

3. Do I need to send the studio any tax forms? If so, which ones?

4. If the studio doesn't send me a 1099 form, what do I do?

I asked the studio, and they said they don't think they can/need to send me forms but said I should check with an accountant and let them know what the accountant says. Thanks.

7 Replies
Level 15

How to Report Freelance Income Obtained from Company Outside of the US

You don't need the 1099Misc.  You just enter it as other business income.

https://ttlc.intuit.com/community/self-employed/help/what-if-i-didn-t-get-a-1099-misc-but-made-money... 

Level 2

How to Report Freelance Income Obtained from Company Outside of the US

Ah, so, to clarify, the company doesn't need to send me any forms, I don't need to send them any forms, and I just report the income as business income? 

Level 15

How to Report Freelance Income Obtained from Company Outside of the US

Right.

Level 2

How to Report Freelance Income Obtained from Company Outside of the US

Cool! Thanks for the help. 

Level 11
Level 11

How to Report Freelance Income Obtained from Company Outside of the US

@birdatiel31 , having gone through the above conversation and generally agreeing with @VolvoGirl -->

1. You as a  US citizen/Resident report this foreign income as if it is earned in the USA  ( self-employment / consultant/sole proprietor ) on  Schedule - C.

2. The gross income(s)    and the associated  expenses ( for this stream and any other self-employment  incomes)   are all shown on Schedule-C.  All you have to do is to tell the  TurboTax that you have self-employment income or business income -- it will walk you through the rest.

3.Your contractor/"employer", needs to provide you a statement showing the total amount of remuneration paid to you.  They can use an official statement or tax form used in the local country -- you need this for your back-up ( if the IRS questions the income ).

4. If ( not likely in this case ) the foreign govt. charges  you any taxes on this income, then  that amount may be eligible  for foreign tax credit / deduction.

If you need more on this , please feel welcome to ask ( in comments )

Level 2

How to Report Freelance Income Obtained from Company Outside of the US

Thank you so much for the thorough response! Sorry for the late answer. Didn't log into my account over the holidays...

This clears up a lot, although I do have one last question about number 3: do I just need a "statement" from them that shows how much they paid me? Or does it NEED to be the Canadian equivalent of the 1099? When I asked the company, they said they typically do not send any forms to their foreign contractors. In the end, is having a from from them an absolute REQUIREMENT? Or is it just better to have, but not required by law? 

Thanks.

Level 11
Level 11

How to Report Freelance Income Obtained from Company Outside of the US

@birdatiel31 , it is not essential that you have a tax form from the payor -- all you need is something   from the payor that shows how much they paid you and for what.   For example  in the USA , a contractor/consultant may bill for services  and get paid  -- the invoice  and the corresponding payment ( check  or direct money transfer ) is sufficient to withstand  an IRS audit ( if ).  So whatever official or semi-official document ( showing the payor and payee., the date and amount  )   that you can get to back-up your claim of the amount earned is good enough.    Note that you are  getting this  for the  "if come, may be " case -- generally IRS does not challenge income statements but there is always the odd case.

Good luck 

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