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

[birdatiel31]

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.

[VolvoGirl]

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... 

[birdatiel31]

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? 

[VolvoGirl]

Right.

[birdatiel31]

Cool! Thanks for the help. 

[pk]

@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 )

[birdatiel31]

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.

[pk]

@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