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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 111638
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I have c-type corporation in US (MA), bank business account

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I have c-type corporation in US (MA), bank business account and paypal business account at which payments from our clients comes. I spend money both ditrectly from paypal and from business bank account after withdrawal. The only official staff is me - director. But I have employee (not executed anyhow to our corporation) and I want to pay them from business account or directly from paypal to reduce taxable income. The employe is located in Europe, Czech (non-US citizenship). How to do that properly to write such payments to this person as business expenses?
If they are an employee then you would write them checks and log them in your corporate books as wages which would come off of your taxable income. You can send them money through paypal or checks it does not matter as long as in your corporate books the payments are listed as wages and at the end of the year you send them proper tax forms for the country where they are residing.


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Customer: replied 5 years ago.
Thanks Paul! I appreciate you quick reply. So the only record of this person is our employee is the record about payment to him via paypal in corporate book?
How will I mention this moment to my CPA during tax preparing - just send them info that some paypal funds were sent to somebody ABROAD USA (!) and that we have a record thet it's a wage to employee, correct?

Do I need any other actions to make such wage payment and TAX DEDUCTION legal? Are there any limits or special requiremnt for me?
Right, you need to have it logged in your company ledgers as an expense for your CPA to use. You will need the information on the foreign employee and as I said you will need to deal with giving them whatever forms are needed in their country for taxes (you need to consult someone in that country to make the determination).
Customer: replied 5 years ago.
OK I will press accept, but I need the final clarity: is the tax payment of this person (in his country) anyhow dealt with our US company taxes? do we need to control this process not to be penalized in US anyhow, or its ABSOLUTELY problem of that person, Paul?
You would need to consult a payroll tax expert from that country or a professional payroll tax firm regarding that issue as we are merely legal experts and that is something outside of our scope.
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