Beginner freelance question - my first contract <3!

actionjackson

I'm seeking to know what other freelancers do in my current situation and any insights people have would mean the world. 
I hail from the UK and have signed my first freelance contract as a 3D artist to a company in the US. I'm struggling to understand how taxes work for us freelancers and if I owe Federal or State taxes in the US because that is where the income is sourced. I was born and bred in the UK and wont be in the US during my 6 month long contract.
To all non-US freelancers out there - did you pay taxes to the US or your home country? 
For how common freelance has become it's surprisingly hard to find a solid answer out there...  Any personal experience stories would be helpful

carvuliero

There are few different forms so you have to check which one apply to your current situation 

Below are instruction on top of one of the form : [best to ask company legal to guide you or your lead ]

"Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
▶ For use by individuals. Entities must use Form W-8BEN-E.

▶ Go to www.irs.gov/FormW8BEN for instructions and the latest information.

▶ Give this form to the withholding agent or payer. Do not send to the IRS."

poopipe

this stuff is a minefield - paying for a bit of time with an accountant who knows about this sort of thing is a very good investment (whether you're working for a foreign employer or not) 

actionjackson

carvuliero said:

There are few different forms so you have to check which one apply to your current situation 

Below are instruction on top of one of the form : [best to ask company legal to guide you or your lead ]

"Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
▶ For use by individuals. Entities must use Form W-8BEN-E.

▶ Go to www.irs.gov/FormW8BEN for instructions and the latest information.

▶ Give this form to the withholding agent or payer. Do not send to the IRS."

It turns out I have to supply a W8BEN
I'm still not sure if that exempts me from paying tax in the US or if it only means they don't withold tax

poopipe said:

this stuff is a minefield - paying for a bit of time with an accountant who knows about this sort of thing is a very good investment (whether you're working for a foreign employer or not) 

I am able to get an accountant who can help me with the UK side of things but finding someone who can advise on USA taxes is proving difficult </3 I didn't think it would be so hard as I am sure many UK accountants would deal with freelancers and know if their clients were paying USA taxes or not 

carvuliero

As you probably saw already form is rather basic you have to fill only few lines As you are not usa citizen and wont be on usa soil non of their laws apply , and the way I understand it this piece of paper is for them to justify tax exempt for the money they will going to pay you . If there is anything else form contain your name and address  + foreign tax identification number [if you have such a thing] so they will write you a letter or take money directly from UK government based on what ever agreements are signed .In few words don't worry about it

actionjackson

carvuliero said:

There are few different forms so you have to check which one apply to your current situation 

Below are instruction on top of one of the form : [best to ask company legal to guide you or your lead ]

"Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
▶ For use by individuals. Entities must use Form W-8BEN-E.

▶ Go to www.irs.gov/FormW8BEN for instructions and the latest information.

▶ Give this form to the withholding agent or payer. Do not send to the IRS."

It turns out I have to supply a W8BEN
I'm still not sure if that exempts me from paying tax in the US or if it only means they don't withold tax

poopipe said:

this stuff is a minefield - paying for a bit of time with an accountant who knows about this sort of thing is a very good investment (whether you're working for a foreign employer or not) 

I am able to get an accountant who can help me with the UK side of things but finding someone who can advise on USA taxes is proving difficult </3 I didn't think it would be so hard as I am sure many UK accountants would deal with freelancers and know if their clients were paying USA taxes or not 

Krom

You don't pay taxes if you're not a US person. You pay taxes in your tax residence. You gain tax residence in most countries by living there 183+ days in 12 months period.