Hi guys, I have recently started my own business and have brought 25 freelancers onto my team. I haven't hired them as employees but rather I'm using their services under the freelance title meaning that prices vary per project, each project can be accepted or denied and they can work with other clients at the same time as long it doesn't breach our contracts.
My question is at the end of the year do these vendors need 1099-misc forms?
How are taxes handled for international vendors, such as a programmer in India or a VA in the UK?
1099s are for US Based subcontractors. I would research each country's tax regulations to be sure you are correctly completing/issuing any necessary income tax documents.
My tax advisor said I should start a German business to handle all international clients and vendors as the European Union tax number can be used to claim income and deductions world wide but to leave my American base there to handle all American clients and vendors with it to simplify things, but I can't pay a VA in the UK with my German business when she did work for the American business so I'm completely confused if I can claim the outgoing monetary funds for international business as tax deductions or how I should handle it.
I am starting a German business, I have an appointment next Tuesday to get all of the legalities and licensing setup so we can 'open' April 1. I think having international offices is a good idea anyway, especially since I live here.
I don't know if anyone from SCORE (www.score.org) can help w/international but it may be worth contacting them. IRS regs are REALLY confusing and, in my experience, they aren't much help as you can get conflicting answers from 2 different people at the same IRS 'help' line number...
1099-misc and international vendors.
Lily Chambers, The Virtual Office Goddess, LLC
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