I’ve been accepted to US university for my 2nd degree and I’m coming to US on a student visa F1 status. In my home country I’m a freelancer with registered small business. Do you think I should close my business in my home country and reopen it in US? Or should I leave my home country business as it is, freelance in US (when I’ll get a permission to work) but get money to my home-land bank account and pay my home-country taxes only without opening US business?
I’ve talked to a few accountants here in my home-country and none of them gave me a certain answer. They claim that they are not familiar with US laws and thats the reason they cannot advise me anything. I guess, if I’ll talk with US accountants they won’t give me an answer either as they are not familiar with the laws of my home country..
Would be glad for any kind of information you have. Thanks!
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In SOME states you don’t need to (that’s one reason US law is hard for international lawyers to know, it’s often different for each of the 50 states). I don’t know the ramifications for someone on a student visa though, so you’ll still need to get some legal advice there,
But from the aspect of a US citizen, if you’re just 1 person as a freelancer you’re considered a “Sole Proprietorship”. Some states require you to just turn in a form first letting them know you’re gonna do that, some states don’t at all and just take their tax money when you turn in your taxes at the end of the year. You do your work, get paid, and at the end of the year turn in a tax form claiming your profits and get taxed on them. Don’t try to get away with not turning in your tax form at the end of the year though, because most of the people you did work for will turn in their forms saying you did work for them, and if they turn in a form saying they paid you and you don’t turn in a form saying you got paid…it’s audit time! And that’s no fun.
That should give you a bit of an idea of how freelancing in the US works…but you still need to get info on your situation because I’m SURE it’s more complicated for you. Try checking out:
A) if you are supposed to get taxed by the US at all, we kind of have this “no taxation without representation” idea from a long time ago and it’s possible some rights group has turned that into people on student visas not having to pay any US taxes since they aren’t citizens with representation. I’m NOT saying that’s the case, just something to look into.
B ) I know as a US citizen if I move somewhere else and want to retain my citizenship of the US I still have to pay US taxes on my earnings, even if I don’t live there (in some places I’d have to pay taxes to BOTH countries and just get taxed twice). Your country may have the same policy…so make sure you aren’t supposed to be paying taxes to them as your old business regardless of if you have to pay US taxes!
ALL this is just me speaking about my personal experiences and things I’ve read about tax stuff for US people. DONT take it as verbatim advice, I’m not a lawyer at all…I’m only trying to give you a vague idea of what you should check out and figure out and ask lawyers about!
For what I know, because the US Immigration Laws, when you apply for a student or tourist visa you MUST declare that you’re not moving to US to find or get a job.
So, you simply can’t work in the states with your visa. To obtain a visa that allows you to work you need to go back to your country and be invited by an american company to go in the states to work, for a minimum period of 2 years.
So, it’s very hard and you can’t do what you’re saying. I guess these are federal laws, so they apply to all the states.
... I guess these are federal laws, so they apply to all the states. Parker
Just to clear one thing up….
The 10th Amendment provides individual States with the power to override Federal Laws. That way, no matter how tyrannical the Federal government becomes, there should always be a state you can move to which doesn’t allow the unconstitutional laws you would like to get away from. Of course, the Federal government might argue the 10th Amendment doesn’t mean what it actually says (kind of like they do with the 2nd Amendment).
Thanks for the info, guys.
I know one guy who came to LA to study, he got a permission to work during his F1 visa status in the field of his studies for 20 hours per week. And he devoted this time to freelancing. I want to do it the same way. Its legal.
The state I’ll be in is Illinois.
I guess what you’re trying to do is to avoid being taxed in both countries. Based on my (somewhat limited) Canada-US experience there is no way around that legally.
If you have income in the US you must file both the state and federal tax return. Furthermore, being a citizen of your country you must pay income tax on all income no matter where it comes from (unless the tax laws of your country are different). If there is a double-tax treaty between the US and your country you can get some slack.
Now, if you’re setting up a corporation then things may be different but then it’s best to talk to an accountant who practice international law.
For the record, I’m not an accountant, so don’t take this as a legal advice. It’s based solely on my experience. Hope that helps.
I can confirm that you can get a limited work permit through your school with F1 if it’s relevant to your studies. I’ve done that when attended university in the US.
I’m in the Chicago Area and I was an S Corp and now a Sole Proprietorship. The main thing is make sure that you can work in the state using your visa. I’d keep your business where it is as it would be recognized due to international treaty law. You will have some limits on how much you can make before paying US taxes so make sure to check that, the visa and just work via your home country business or a sole proprietorship as getting a business set up here involves a ton of paperwork and things I know I preferred to have someone else do for me which decreased what I made. That’s why I switched away from incorporation.
Thanks for the info, guys.
I know one guy who came to LA to study, he got a permission to work during his F1 visa status in the field of his studies for 20 hours per week. And he devoted this time to freelancing. I want to do it the same way. Its legal.The state I’ll be in is Illinois.
MIKSMUSIC , BrianCoyDesign
Thanks for the info! I guess I’ll leave my home-country business as it is, I’ll find accountant in US who works with international cases and maximum I’ll just close my home-country business while being in US if I’ll need to – I can do it via my home-country accountant remotely, from US.