Living in USA, Working Overseas - What advice do I even need?
August 8, 2017 9:12 PM Subscribe
I relocated to the USA this year (Oregon, specifically), and my old employer back in Australia would like me to work for them again remotely. Great! Finding a new job is terrible, and I enjoy working with these guys! But, logistically, how do I actually do this, or more specifically, who do I need to find/pay to give me advice on doing this correctly?
The real question is, how do I avoid getting into trouble with the IRS, and how do I make sure that I don't get hit with something... unexpected.
Pertinent points:
The real question is, how do I avoid getting into trouble with the IRS, and how do I make sure that I don't get hit with something... unexpected.
Pertinent points:
- If it matters, I'm married to a US citizen (which is the reason I relocated here), but currently a conditional permanent resident. She is currently on a break from work.
- We currently pay for marketplace insurance. It'd be nice if we could find a way to spend less money on this as a part of the deal, since we both have health problems(tm)
- The company has no presence in the USA
- In Australia, I was a contractor with the company - paid via a Pty Ltd company (i.e. not sole trader/pure ABN), but there was no requirement for this. What there isn't, is an appetite for them doing withholding at all (that company is closed down now)
- They are willing/able to pay directly into the USA though, most likely via their head office in Hong Kong. However, they're not willing to have a US tax presence of their own at this time.
Definitely you want to talk to a real tax accountant to make sure you set up everything correctly; for all I know their refusal to have a US tax presence could be a dealbreaker - US tax law is arcane. Assuming that's not the case, if they hired you as a 1099 contractor you could probably manage your own "withholding" and pay estimated taxes quarterly using the advice of your tax accountant pretty easily (if you don't pay estimated taxes quarterly, you may be hit with late fees even though you were calculating everything correctly!).
Another option might be to work with a contingent workforce management firm - basically, for a small percentage of the rate you negotiate with the Australian/HK organization, they would hire you via this CWM firm rather than directly. When I was under a similar arrangement, I had been doing work as a 1099 contractor for the organization and had to manage all my own self-employment taxes, but after we converted to using one of these firms, doing the exact same work, for tax purposes I was a W2 employee of that CWM firm, and my tax situation was a lot more straightforward. In practice, that meant I submitted my timesheet to the CWM firm, they billed my organization, and then once they received payment for the bill, they paid me and withheld the appropriate amount (NOTE: that still meant that both employer-side and employee-side taxes were coming out of the rate I'd negotiated with the organization, the CWM firm doesn't contribute any of their own money). So the burden would be on the CWM firm and the organization to make sure the taxes on the international payment were handled correctly.
This was a while ago, but one downside was that while it did give me access to the CWM firm's group plan insurance, it was not very good coverage, and as per the parenthetical note above, even what looked like the employer's contribution was actually coming out of my rate. That did make it pre-tax, at least.
posted by solotoro at 7:26 AM on August 9, 2017
Another option might be to work with a contingent workforce management firm - basically, for a small percentage of the rate you negotiate with the Australian/HK organization, they would hire you via this CWM firm rather than directly. When I was under a similar arrangement, I had been doing work as a 1099 contractor for the organization and had to manage all my own self-employment taxes, but after we converted to using one of these firms, doing the exact same work, for tax purposes I was a W2 employee of that CWM firm, and my tax situation was a lot more straightforward. In practice, that meant I submitted my timesheet to the CWM firm, they billed my organization, and then once they received payment for the bill, they paid me and withheld the appropriate amount (NOTE: that still meant that both employer-side and employee-side taxes were coming out of the rate I'd negotiated with the organization, the CWM firm doesn't contribute any of their own money). So the burden would be on the CWM firm and the organization to make sure the taxes on the international payment were handled correctly.
This was a while ago, but one downside was that while it did give me access to the CWM firm's group plan insurance, it was not very good coverage, and as per the parenthetical note above, even what looked like the employer's contribution was actually coming out of my rate. That did make it pre-tax, at least.
posted by solotoro at 7:26 AM on August 9, 2017
Probably a good idea for your company to get some legal advise from a visa and immigration firm. Without a presence in the USA you might not be able to work for that company in the USA.
posted by lstanley at 7:26 AM on August 9, 2017 [1 favorite]
posted by lstanley at 7:26 AM on August 9, 2017 [1 favorite]
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posted by DrGail at 5:03 AM on August 9, 2017