Question
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Feb 9, 2006, 04:14 PM
| | Junior Member  | | Join Date: Jun 2005
Posts: 48
| | | Need info about employing someone out of USA
Hi,
I have hired a company in India to do some of our work. I am wondering if I can send them a check for the agreed amount or do I have to pay the taxes and pay them the remaining amount. Would I be able to write off my taxes?
Thanks
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Answers
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Feb 9, 2006, 06:41 PM
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#2
| | | Tax Expert
Join Date: Feb 2005 Location: Atlanta, Georgia
Posts: 10,013
| To which taxes do you refer?? |
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Feb 9, 2006, 11:46 PM
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#3
| | Junior Member
Join Date: Jun 2005
Posts: 48
| I am talking about employment tax. Do I have to send the whole amount so that they pay the tax in India or do I have to with hold the taxes(to pay IRS) and send them the remaining amount?
Thanks | |
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Feb 9, 2006, 11:59 PM
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#4
| | | Tax Expert
Join Date: Feb 2005 Location: Atlanta, Georgia
Posts: 10,013
| Rujan:
In most cases, U.S. employment taxes applies only to work performed within the United States. The exceptions are U.S. military deployed overseas, U.S. government employees located outside of the U.S., and U.S. citizens working for U.S.-based companies in foreign locations.
If you hired an Indian company to work in India, then U.S. employment taxes do NOT apply. | |
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Feb 10, 2006, 12:24 AM
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#5
| | Junior Member
Join Date: Jun 2005
Posts: 48
| Thanks for the response.
Could you please tell me how I can write off the taxes for the amount I pay these people in INdia.
Thanks | |
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Feb 10, 2006, 07:38 AM
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#6
| | | Tax Expert
Join Date: Feb 2005 Location: Atlanta, Georgia
Posts: 10,013
| Foreign taxes you pay are deductible as a miscellaneous deduction on Schedule C (for a sole proprietorship) or on the partnership or corporate return you file. | |
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Feb 12, 2006, 04:53 PM
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#7
| | Junior Member
Join Date: Jun 2005
Posts: 48
| Thanks for your assistance. I will be talking to my accountant for further help.
Sr | |
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Feb 12, 2006, 05:23 PM
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#8
| | Christianity Expert
Join Date: Nov 2005 Location: Atlanta GA
Posts: 26,166
| Are you hiring individual employees, or merley hiring a company to do work for you.
Even in the US if you hire a firm to do work for you, you merley pay them the agreed to price for thier service. The company that is contracted by you would be liable for thier own taxes and expenses.
For example, my son owns a plumbing business, he hires on a regular basis two other plumbing companies to do work for him ( subcontract)
He is not responsible for any of thier taxes, insurance or workers comp.
He merley has a contract with them to do a certian amout of work or do a certain job for a certain amount of money, he pays them merely the contracted price. He will if the amount is over a certain lmit a 1099 form to show that he paid them a certain amount of labor.
You sounded like you merely hired a firm to do work for you, I would advice you seriousllsy if you are doing business and esp overseas business that you take some business and accounting classes that can help you properly know your liabiliy in many areas. | |
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Feb 12, 2006, 06:24 PM
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#9
| | Junior Member
Join Date: Jun 2005
Posts: 48
| Thank You Fr Chuck | |
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Feb 13, 2006, 12:19 AM
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#10
| | Tax Expert
Join Date: Feb 2005 Location: Atlanta, Georgia
Posts: 10,013
| Exceptionally sound advice, Fr Chuck!! | |
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