QUESTION
Can I treat Offshore Employees like independant contractors on taxes?
Asked on May 19th, 2011 on Taxation - California
More details to this question:
I plan to hire a few people from the Philippines to work for my business full time. I've been told that I can treat them as independent contractors, but I know if I hired here in the U.S., I would not meet the IRS's independent contractor criteria. I won't be paying their expenses, but I will provide training, have control over their work product, and expect that they will work only for me. What, if anything, do I need to do in terms of reporting their income? Since they are not U.S. based, can I treat them as independent contractors? Thanks for your help!
1 ANSWER
Bruce Givner
The definition of "wages" for income tax withholding purposes specifically excludes services performed by nonresident alien individuals as the Secretary may designate by regulation. The regulations exempt remuneration paid to a nonresident alien individual other than a resident of Puerto Rico for services performed outside the United States.
Answered on May 24th, 2011 at 11:54 AM