6 ms·

Ask HN: How do remote workers deal with taxes?

• kypro 8y ago
  Where are you based? In the UK you can register for self assessment and file your own. You can complete self assessment yourself quite easily. If you want to contract through an LLC you'll probably want an accountant.
• gambiting 8y ago
  If you're doing work for a foreign company it's best to pay an accountant to sort out the tax for you. I know people who work in UK for foreign companies usually set up and LTD company and then pay themselves through that, through dividends etc, effectively only paying about 20% tax on everything.
  • kypro 8y ago
    As someone who contracts in the UK, I'd say it really depends on how much you're making and for what duration. If you're going to make £10,000 on a three month contract you're probably better off just registering for self assessment. I did this for a while when I was making around £28,000/annum because it was the most tax effective and easiest solution in my case. Also accountants are expensive. If you're making £60,000+ you're probably going to want to set up an LTD company, but at that point you're really best off talking to an accountant and discussing your options.
    • gregjwild 8y ago
      I'm on about £28k per annum as a remote contractor -- I'd second this advice.
    • stealthmodeclan 8y ago
      If you are a contractor, LTD saves you from unlimited liabilities.
  • deleted 8y ago
    [deleted]
  • whatsstolat 8y ago
    What they are doing is probably tax evasion, unless they are only resident for a very short time or are running a business which is not a thin shell around an employment arrangement.
• kalleboo 8y ago
  a) Own country. Generally most countries use residence-based taxation (where you live most of the year is where you pay your taxes), with a few very specific exceptions (the USA, ship crew, diplomats, deployed military, etc). b) Freelancer because I'm too cheap to set up a company/hire an accountant, and it's really simple to just do my own taxes. Those extra taxes are thinks your employer now doesn't have to pay (healthcare, unemployment insurance, etc) so ask for a raise to match.
• danieka 8y ago
  a) I pay taxes in the country I reside in. b) I have set up a LLC. Of course I have to pay a lot of tax. If I want to have 100 dollars deposited to my account I have to charge my client 250 dollars. Still there are several benefits to having an LLC. It enables me to optimise how much I pay in tax, usually I can go from 60% tax to somewhere around 50%. I buy everything related to my business via the business. Conference trips, computers, headsets, screens, books. That way I can spend money "pre-tax", before I lose the 50% by paying it from the LLC as salary. Essentially I get those items for 50% off compared to if I had bought them with my own money. I can also get the VAT back. When you have an LLC the contract between you and the client will actually be between the LLC and the client. That means you are not personally liable for any damages, for example if you get sick and can't deliver the client can't go after you personally. Also should you for some reason go bankrupt you are (typically) not personally liable. Note that this is how it works in Sweden, but some of it might be applicable in Portugal.
  • nodesocket 8y ago
    60% tax, how absurd. I cringe at my US based 24% (+ 10% self employment) bracket. By the way, love Sweden (summers) though. Been to Stockholm a few times, the first for nearly 3 months.
    • fifnir 8y ago
      Ask him how much he pays for health/car/home insurance as well :D
      • danieka 8y ago
        Don’t own a car, and obviously I don’t need health insurance ;). I do spend 15$ per month on home insurance. Joking aside, I’ve heard several opinions that Sweden is a good country to start a startup in. Since there is a safety net to catch you in case things go sideways you can focus a lot more on the startup without worrying.
    • galfarragem 8y ago
      Scandinavia is known for high benefits supported by high taxes. The real problem is when you have low benefits and high taxes. In my country, an high income freelancer (paying ~50% taxes) will hardly ever get unemployment, sick leave or child care benefits.
• nodesocket 8y ago
  I don't do any international, all US based. I keep track of all my expenses (credit cards and banks accounts) and tag them using Quickbooks Self Employed. It even estimates federal quarterly taxes and allows me to make quarterly online payments using EFTPS.gov. At tax time it exports everything into TurboTax which saves a ton of time on deducations and reporting my quarterly federal tax payments.
• gamblor956 8y ago
  a) Generally, you pay the taxes in the country where you reside or the country where you perform the work (if not the same country). Despite popular belief, most major countries tax individuals on their worldwide income (US, China, France, Germany, off the top of my head)...however, most of these countries exempt the first $xxx thousands of income from tax (or from certain types of taxes, like payroll taxes) or certain types of income from tax. b) Depends on your legal risk profile. If you are a contractor, an entity may shield you legally but will incur greater tax and compliance costs. If you are a dependent worker (i.e., an "employee"), you shouldn't need to ask these questions because your employer will take care of the tax withholding for you as generally most countries require foreign companies to register for payroll withholding once they hire employees locally.
• ilammy 8y ago
  a) Paying in my country of residence. b) Paying as an 'independent' contractor. We have reeeeeally lax rate of 5% (not including VAT) if you earn less than $190k/year (with average salary around the country being around $4k/year).
  • galfarragem 8y ago
    Can I ask you which country is it? :)
    • ilammy 8y ago
      Ukraine.