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Question for the Money Doctors

Question submitted on Aug 27, 2012.

Question

Greetings:

I am currently living overseas but I am doing 1099 contract work for a company in the USA and the company does NOT have operations in the foreign country that I reside in.

The company in the USA has issued a 1099 for monies paid to me. Am I obligated to pay taxes as if I were residing in the USA under these circumstances?

Thanks in advance...

Answer

Assuming that you are not a US citizen, please note that you will be treated as a resident alien for US income tax purposes, which means that your income will generally be subject to tax in the same manner as a U.S. citizen. Barring specific treaty exemptions between the US and your country of ciizenship, you will report all income on a US tax return whether from sources within or outside the US, including interest, dividends, wages, housing/car allowances, income from rental property or royalties, etc. 

Please visit www.findacpa;pfs.org to find a CPA/PFS in your area, who will be able to help you interpret the treaty provisions as well as advise you on both Federal and State tax treatment of resident aliens. 


For additional information visit http://www.360financialliteracy.org/