Local Seo: Outsourcing and Taxes Question

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Makavelimob

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Aug 20, 2008
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I have recently formed an LLC to perform local seo, web dev, ppc mgmt and more for businesses in my area. The majority of my work is outsourced to US and non US based workers/companies. I spend a good amount on these services but it is worth it in terms of saving time, efficiency you know the deal.

As far as taxes go, im not sure on how to classify these outsourced services. Do I treat the US services differently than I would the non us based? Should I send a 1099 to the US based services? Can the non US based be considered a business expense?

Someone please hit me up with some knowledge
 


You're required to issue a 1099-MISC to any US based service provider that you pay a total of $600 or greater in a year. As for services that are performed outside of the US, I'm only familiar with Canada, and there's a 1099 equivalent that gets submitted for sub-contracting services there too.
 
Makavelimob said:
hmm any idea about services from india? europe?
Click to expand...

Sorry dude, can't help you there.

But I did want to clarify that 1099's are only required to be issued to non-incorporated service providers. I realized too late that I'd left that out of my first reply.
 
Okay, just did some quick research because, even though I've not encountered it, I was curious myself.

If the service provider has no physical connection to (or presence in) the US, then, per SEC 861 of the IRC, it would not be considered US source income, therefore you would not be required to file any paper on the transaction.

FYI, this has been upheld in audit.

(You'll want to verify this with your own tax preparer.)
 
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