Saturday, April 28, 2012

ACCOUNTANT HELP: if working outside the US, how is the taxes thing?

ACCOUNTANT HELP: if working outside the US, how is the taxes thing?
ACCOUNTANT HELP: if working outside the US, how is the taxes thing? Hello: My aunt lives in the US and I she runs a store online for Argentina. Sells clothes and shoes that she buys from US stores and then send them to that country. 100% of her clients are in Argentina and they pay in the local currency in bank accounts in that country. Then she withdraws the money from any ATM machine in the US using an Argentinian debit card and make deposits in dollars into her US bank account. She says, she pays taxes accordingly in Argentina. QUESTION IS: DOES SHE NEED TO DO TAXES IN THE US? HOW CAN ISHE EXPLAIN THE NATURE OF THE BUSINESS? SHE WANT TO KNOW IF EVERYTHING IS BEING DONE LEGALLY AND WHAT ARE THE US TAXES PROCEDURES IF ANY. SHE HAS TO PAY TAXES IN BOTH COUNTRIES? UNDER WHAT LAW? ANY RESPONSE IS WELCOME!!
United States - 2 Answers
Random Answers, Critics, Comments, Opinions :
1 :
if she is a US citizen she is taxed on world wide income if she lives in the US but is not a citizen she will file as a resident alien and pay US Taxes, as well as her Argentina taxes
2 :
She's not working outside of the US. The fact that she's targeting Argentine customers is irrelevant. She files her tax return exactly the same as she would if she sold to US customers or ran a brick-and-mortar store. She files Form 1040 and attaches Schedule C to calculate her self-employment income. If the net profit is over $400, she attaches Schedule SE to calculate the self-employment tax. It's unlikely that she has to pay income taxes in Argentina unless she is an Argentine citizen and Argentina taxes their citizens world-wide income regardless of where they live. (The US does the same thing though most countries do not.) If she does pay Argentine income taxes, she would claim a credit for those using Form 1116. The credit would be the lesser of the Argentine income taxes paid or the tax that the US would have collected on that income. As a result she'll pay income taxes at the higher of the two countries' rates; she is not double-taxed on the income.