Hello, I start work for an overseas firm at the beginning of 2008. I am employed as a private contractor.?

I will be paid directly into my bank account from overseas. What would my best option be with regard to tax. Should I get my own tax id and have my own company. I am clueless on this and so is my accountant as far as I can see. Any advice would be greatly appreciated..Thanks

Public Comments

1. The main thing is about your Social Security payments, if they don't, then you will have to pay both half's. Make sure your compensated accordingly.
2. The day is still young but this is third time I have posted this. I have a canned explanation to apparently clueless independent contractors: Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. The basic issue is the amount of control the employer has over the worker. If you are required to show up for work--personally--at a particular time, punch the clock, use the employer’s equipment and are paid an hourly rate, or another set rate based on time served, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired. When you file your income tax return, you can attach Form 8919 Uncollected Social Security and Medicare Tax on Wages and only pay the employee's half of social security. You will still have to cough up all the income tax. IRS and the states are stepping up enforcement in this abuse area.
3. You don't say just what it is you'll be doing for them. I'd suggest you post that info here and someone can very likely give you a little more info. My big concern for you re this job is that a very high percentage of the "jobs for overseas firms" are scams. If for example you are supposedly receiving payments from their customers, depositing them to your bank account, wiring off 90% and keeping 10% as your fee, that's a well known scam. Or if someone is going to ship you packages and you are to ship them on to someone else, that's either a scam or highly illegal and will get you in trouble. If this job is something you found on the Internet, or by responding to an unsolicited email, you can pretty much bet that its a scam of some kind. But assuming it's really legit, if it's just you, and you don't have employees, you don't need a tax id. By definition if you are a private contractor, as far as the IRS is concerned you have your own business. You will need to keep good records of any income and expenses, and at tax time will show those on a schedule C, and also file a schedule SE to calculate your self-employment tax and a form 1040 to calculate your overall tax liability. If your accountant is clueless on something like this, you need a different accountant.