We hired an independent contractor from the Philippines through Upwork, but they withhold her payment for weeks and take a hefty percentage of her fee. We want to work around this by paying her directly, but I'm worried that the tax picture would become more complicated without a withholding company (which is what I'm assuming Upwork is). Has anyone hired out of the country? I want her to work more hours, but I also don't want the IRS to consider her an employee. Any thoughts? Thank you!!
Accountant · Atlanta, GA · Member since 2015 · 1k+ posts · 1k+ votes
7y
@Dallas Waldon Generally you would request one of the W-8 series of forms from her along with her signature on your contract.
The facts & circumstances of the arrangement, as well as the current tax treaty in place between the US and the Philippines will determine what withholding needs to take place on payments to her.
I would consult your tax CPA/EA, or onboard one if you don't have one. This is complex territory -- definitely not DIY.
On her side, she may have a 1040NR obligation with schedule C, again, depending on the tax treaty currently in place.