How do taxes work if I'm a US citizen doing remote contract/freelance work for a company in Singapore? (I'll be in the US.)
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@Stacey, except I am a US citizen working outside the US and that was a non US citizen working inside the US? That doesn't seem like the same thing to me.– eatonphilJan 6, 2015 at 13:30
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Its not feasible to handle every single possible country combination. The example was for the USA but the vast majority of the countries in the world operate based on residency based taxation all in a very similar way.– user152Jan 6, 2015 at 13:47
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2 Answers
Taxes work like they would if the contracting company were located in the US. Your taxes are based on where YOU perform the work, not the hiring company.
http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following: A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
Do you get paid on a 1099 or a W-2 basis? If they cut you a straight check it is 1099. If on a W-2 basis are they taking out taxes or expecting you to do it for yourself? a Foriegn corporation may be taking out taxes for that foriegn country and you will have to take out taxes for the US yourself.
I would sugget a conversation with an accountant, set aside 25% percent of your income if you are not sure until the accountant tells you otherwise. You may need to hire a Singaporean Accountant as well for yourself. Ouch!
And remember the US is the only country in the world where they double-tax their citizens for income recieved overseas. You get taxed by the country your work is located in and by the United States. Most other countries do not tax overseas income.
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-1 "you may need to hire a Singaporian accountant for yourself" Why would they be paying taxes to Singapore if they're not physically present in Singapore? Withholding taxes is only a legal obligation when paying workers actually present in the country.– user152Jan 6, 2015 at 4:47
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How would the Singapore government even allow the registration of this person as an employee? They wouldn't even have any kind of local identity number. The government doesn't even know/care if they exist.– user152Jan 6, 2015 at 5:01
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This is why you would talk to the HR department and/or an account to find out what Singapores laws require.... Do you know that Singapore requires employees of Singapore companies to be present to be taxed? I don't and so I suggest he contact a professional. Why you would decide to down count that concpet is way beyond my understanding. you should always contact a professional when your concern involves the law.– Brian HJan 6, 2015 at 5:21
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see iras.gov.sg/irasHome/page.aspx?id=11538. Under "Non-resident (Less than 183 days)" it says that "You will only be taxed on all income earned in Singapore." Since they will not physically be present in Singapore, they won't need to pay tax to the Singapore government. See my answer here: freelancing.stackexchange.com/questions/2742/… for how the freelance/contract work relationship is viewed internationally. The contractor is offering a service and it is not an employee-employer relationship.– user152Jan 6, 2015 at 6:53
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