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I recently started freelance graphic design in the US. I read that if you are self-employed, earning $400 a year, on etsy, anything you have to report this income to the IRS.

What does this mean when it comes to working with foreign clients, or foreign online websites? I read that you don't necessarily have to report this information to the IRS because the foreign client doesn't report to them.

Is that correct? Do you have any helpful info about this?

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I am not a tax lawyer or an accountant (and they would have the answer), but I believe it depends on where the work is done, not the nationality of the person paying you. So if you perform the work in the US (even for foreign clients), the IRS expects you to report the income.

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  • (Not a tax lawyer either) If you are an american citizen, the IRS requires reporting of all income no matter where in the world it was earnt, regardless of whether the IRS will actually take a cut. EG A US citizen who lives permanently outside the US in a country that has reciprocal tax treaties with the USA still has to file US tax returns. This is different from pretty well every other country in the world.
    – Peter M
    Commented May 28, 2015 at 13:05
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Yes you need to report your revenues to the IRS and just to mention this, usually websites such as Etsy should mail you a report of your annual sales for your tax report.

A lot of websites now require you to prove your identity and fill a W-9 tax form as well.

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