• Yes. In that case you are a business owner earning money from a business (as a contract laborer, in effect). You in fact have to pay FULL social security and medicare. (In an employer-employee situation, the employer pays half). The payer should send you a 1099 at the beginning of next year giving you a total of all that the payer paid you, and the payer also sends a copy to the IRS, so you DO need to file taxes and you DO need to report that income as business income.
    • emma132465798
      Half of the question seems to be cut off. Thanks for your answer! I dont even know the person (they dont even know my real name), and they're in Bangladesh (or so they say) so how can they send a 1099. I guarantee they wont know what it is, or care what it is. In fact theres a high chance that by the end of the year I wont even be working with him and i wont even know how to contact him to get one. This is what is confusing. Im not his employee, hes just a random guy overseas who pays me to write blog posts ..
      Ahh...that's a different kettle of fish. A U.S. "employer" would pretty much have to send out a 1099, and it would be to their advantage to do so. I THINK foreign employers are SUPPOSED to do so...but if they do not, you can cheat on your taxes and not report the income. There are additional tax regs regarding foreign employment. Note that you MIGHT end up owing taxes to the Bangladesh government! I don't know what Bangladesh might do in an attempt to collect them, or if you're being paid enough to make it worth their while to attempt to collect.
  • You need to report all income.
  • Yes as a self employed contractor you are required to pay "self employment tax" which currently is 12.4% of your net income for social security & 2.9% of your income for medicare . This is exactly equal to the 15.3% FICA tax that is paid 1/2 by employees 1/2 by employers with conventional jobs.. This 15.3% tax is in addition to any actual income tax you are required to pay.

Copyright 2020, Wired Ivy, LLC

Answerbag | Terms of Service | Privacy Policy