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Taking deduction from foreign contractor?

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CALIFORNIA

Hi, besides my full time job, I consult on my spare time. So when I file income I take deductions for costs associated with my consulting work (a percentage of my internet access, % of phone bill, etc..).

As my consulting work expands I want to outsource part of it to a friend abroad. Can I take deductions for his work as I would for a US worker? Do I need to do anything differently? For example, do I issue a 1099? By the way, my consulting work is done as a independent freelancer, I don't have a company.

I would really appreciate any help here.

Thanks
 


LdiJ

Senior Member
CALIFORNIA

Hi, besides my full time job, I consult on my spare time. So when I file income I take deductions for costs associated with my consulting work (a percentage of my internet access, % of phone bill, etc..).

As my consulting work expands I want to outsource part of it to a friend abroad. Can I take deductions for his work as I would for a US worker? Do I need to do anything differently? For example, do I issue a 1099? By the way, my consulting work is done as a independent freelancer, I don't have a company.

I would really appreciate any help here.

Thanks
If your friend properly invoices you for the work that he does for you, then you won't have a problem deducting what you pay him as a business expense. However, depending on the nature of what he does and where he does it, you might have to do backup withholding.
 
It would be web marketing work and he will do it from Brazil.

Another question is, for me to be able to deduct his work as cost to my business do I need to pay him from my bank account in the US, or can I pay him directly in Brazil? Does it make a difference?

Thanks
 

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