Question

USA consultant with first international client - how to manage taxes?

Forum|Forum|4 years ago
October 27, 2021
1 reply
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I have an LLC in Washington State, doing consulting work. Next year I'll have my first international client, based in the UK. Since I won't have a 1099 with them, what do I need to do for reporting taxes on this income? What else do I need to know?

KochuK

Hi mburwell,

Assume that you have a Single Member LLC, a disregarded entity for Federal income tax purpose. You live and work in the US. And you report your consulting business in Schedule C, Profit or Loss From Business.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

The revenue from your UK international client is to be included on Part I Income line 1 Gross receipts or sales because we need to report worldwide income.

If you received in UK Pounds, you can translate into US$.

https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates

If foreign bank account, you might be subject to Form 8938 and FBAR requirements.

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

Hope this helps. Thank you.

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