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    toidness's Avatar
    toidness Posts: 4, Reputation: 1
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    #1

    Feb 6, 2012, 11:04 AM
    US Taxes on Foreign Directors Fee earned oversees
    Can anyone let me know how taxes work in the US for Directors' Fees received from an oversees company? It is more than $600 a year and will be monthly and quarterly. Do I just declare it on the 1099-misc? And how heavy are the taxes on misc income.

    Is there a difference if the directors fee is taxed or not taxed where the company resides.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Feb 13, 2012, 09:51 AM
    If the person being paid is a U.S. citizen or U.S. resident, then ALL world-wide income is subject to U.S. income taxes.

    The director's fees IS probably considered non-employee compensation, but the foreign company may NOT generate a Form 1099-MISC. Regardless, it must be reported on Schedule C and is subject to both income and self-employment taxes.

    Most directors would be highly paid individuals, so his/her salary probably exceeds the $106,400 limit for assessment of Social Security taxes. That being the case, the self-employement tax will only be 2.9%.

    The top marginal tax rate is currently 35%, so the most he will pay is about 38%.
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