How do I pay my taxes if I’m working from inside the US and being paid by a foreign company?
I’m technical writing by the hour. I under bid my rate since I didn't consider how much tax I’d have to pay.
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1In general, if you are a permanent resident of the US, and you do your work in the US, you are taxable in the US only, not in another country. It is not relevant where your employer works, what is relevant is only (a) where you live; and (b) where you work.– Grade 'Eh' BaconCommented Jan 24, 2018 at 2:18
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You just pay it in the completely normal way, in the US, like any other person in the US. 1099 forms are only a "convenience". If you make $100,000, and do not get one 1099 form, you simply pay tax on the $100,000 exactly the same. 1099 forms means nothing.– FattieCommented Jan 24, 2018 at 23:28
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1 Answer
If the foreign company is not withholding taxes and does not file a 1099 form, then you just need to track the amount you make and report it.
Each quarter, you will have to file estimated taxes so that you don't end up owing more than a $1000 in tax. If you owe more than that, then you may be subject to penalties and interest.
Be careful, the deadlines for paying estimated tax are April, June, September, and January. They are the fifteenth of the month unless that falls on a weekend or holiday, in which case it is the next business day. Publication 505.
Remember that you are responsible for income taxes, payroll taxes (Social Security and Medicare), and the employer's share of those payroll taxes. Be especially sure that you are caught up in the January payment such that you've paid almost all of the taxes for the year. If you overpay, you lose a bit of interest but get the money back as a tax refund when you file. But if you underpay by too much, you owe not just the taxes but potentially penalties and interest.
More info at Self Employment Taxes. Note that the company being foreign or domestic doesn't matter to you in terms of what you owe. It may make some difference to the paperwork that the company files.
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Thanks for the useful information, it’s very helpful. I’ll try to find a tool that can help me calculate my future filings. I haven’t been paid yet but it’s coming down the road. Commented Jan 25, 2018 at 0:39
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What is the difference between: income taxes, payroll taxes, and “employer's share of those payroll taxes” - concerning paying quarterly. What about unemployment insurance? Commented Jan 25, 2018 at 0:56
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Self employed people do not owe unemployment insurance but cannot collect unemployment later (at least not based on their self-employment income; they can if they also have a regular job). Income taxes are what you file on a 1040 normally. Payroll taxes are normally withheld by the employer, but if you are self-employed, you have to pay them as self-employment taxes.– BrythanCommented Jan 25, 2018 at 1:29
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