I am a US citizen living in a foreign country.I am a Sole Proprietor.I rent an office and have locals working in the office helping clients through the Internet. By local law they have a " Sole Proprietor" registration and are not employees. This is similar to contractors in the US. My clients pay for service through credit cards and I want to record this as US income. I am filing a schedule C.1) On what line to I enter their expense?2) What do I name their expense?Do I need to file 1099s for the workers? If so how is it possible. They are not US citizens and are working outside the US. They do not have Social Security numbers
State/Country relating to question: Georgia
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Hi and welcome to Just Answer!You are correct that your self-employment income is reported on schedule C.If you are hiring contract labor - the compensation is reported on schedule C line 11.
Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.
For the person to qualify for the foreign earned income exclusion - he/she should: -- Work and reside outside the United States for at least 330 days during the year(Physical Presence test), or -- Meet either the Bona Fide test.If the person qualifies, he/she may exclude up to $92,900 (2011) in foreign wages. The amount of foreign earned income exclusion fro 2012 is $95,100.
Exclusion is not granted - to receive that exclusion - the Taxpayer should file the tax return and attach the form 2555.
Taxes, Immigration, Labor Relations