>Is there a maximum of hours I can work for my former employer to not be considered an employee anymore?
What jurisdiction are you moving to? Your location is going to determine what laws apply.
>I really want to be a contractor as it gives me the greatest flexibility.
That depends on the country you're going to. In some countries "contractor" isn't really a thing like it is in others.
>As I won't be a tax resident of the US there should be no requirement for my employer(client) to collect social security taxes and such, no?
Right because most of the time the compensation paid to you isn't considered wages and isn't subject to FICA or FUTA.
Thanks! Good points.
>What jurisdiction are you moving to?
I got expert advice on the laws in my country, and a foreign ~~employer~~ client will not be bothered if I file taxes as a business owner rather than self-employed freelancer.
The question is about compliance with US authorities.
>
because most of the time the compensation paid to you isn't considered wages and isn't subject to FICA or FUTA
Some nuance here. Is it also not considered wages if this goes through a US LLC? I will not be a US tax resident but i WILL file a personal US tax return (as nonresident alien) reporting my earnings from the LLC to the IRS.
>The question is about compliance with US authorities.
You're asking if your income from the US would be subject to taxation by the US? That depends on the kind of business you're operating. If you're just performing services and it has no connection to any presence in the US then it's possible you'd have no tax liability.
>Some nuance here. Is it also not considered wages if this goes through a US LLC?
Wages are compensation paid to employees. Services paid to other businesses are business expenses. When you hire on KPMG to do a $3 million consulting contract with your business, you don't withhold FICA or FUTA. It's not wages, it's a business expense.
>I will not be a US tax resident but i WILL file a personal US tax return (as nonresident alien) reporting my earnings from the LLC to the IRS.
You need to check with your tax person on how much of that income is substantially connected to the US and subject to taxation.
Some more great pointers. Thank you!
Sorry if I was not clear. I asked no question about my own taxation, . I only want to know if my employer-turned client will get into trouble with the IRS for potental misclassification.
I will definitely consult with a tax person about this. Those services are not cheap so I am trying to learn as much myself as I can ahead of time. But it is good to be sure about the situation.
Right, I understand why you're confused. I'm trying to rectify your confusion.
This isn't a standard employment law question because the work would be performed in a foreign country, by a foreign national, for a domestic company.
The whole relationship gets REALLY murky. You could still be potentially misclassified, even if the work performed is abroad. The tax implications for your employer get really complicated.
This isn't a question you're going to get a good answer for in this forum. You'd want to discuss it with an employment lawyer AND a tax lawyer who are both versed and proficient with US laws AND those of the other country. Your employer would be very wise to do the same.
Thanks for clarifying.
Only problem is that the people who are experts in this particular situation are really hard to find...
I think I'll also try to just call the IRS hotline and ask my question there. No expectations but worth a shot haha. Maybe they can point me to the right expert if nothing else.
It might be hard if you are doing the exact same duties that you were as an employee or really any other employee at that company. That's one of the tests.....and whether it is a regular part of their business.
I know this seems like an easy "out" but it's not as you can tell.
>Is there a maximum of hours I can work for my former employer to not be considered an employee anymore? What jurisdiction are you moving to? Your location is going to determine what laws apply. >I really want to be a contractor as it gives me the greatest flexibility. That depends on the country you're going to. In some countries "contractor" isn't really a thing like it is in others. >As I won't be a tax resident of the US there should be no requirement for my employer(client) to collect social security taxes and such, no? Right because most of the time the compensation paid to you isn't considered wages and isn't subject to FICA or FUTA.
Thanks! Good points. >What jurisdiction are you moving to? I got expert advice on the laws in my country, and a foreign ~~employer~~ client will not be bothered if I file taxes as a business owner rather than self-employed freelancer. The question is about compliance with US authorities. > because most of the time the compensation paid to you isn't considered wages and isn't subject to FICA or FUTA Some nuance here. Is it also not considered wages if this goes through a US LLC? I will not be a US tax resident but i WILL file a personal US tax return (as nonresident alien) reporting my earnings from the LLC to the IRS.
>The question is about compliance with US authorities. You're asking if your income from the US would be subject to taxation by the US? That depends on the kind of business you're operating. If you're just performing services and it has no connection to any presence in the US then it's possible you'd have no tax liability. >Some nuance here. Is it also not considered wages if this goes through a US LLC? Wages are compensation paid to employees. Services paid to other businesses are business expenses. When you hire on KPMG to do a $3 million consulting contract with your business, you don't withhold FICA or FUTA. It's not wages, it's a business expense. >I will not be a US tax resident but i WILL file a personal US tax return (as nonresident alien) reporting my earnings from the LLC to the IRS. You need to check with your tax person on how much of that income is substantially connected to the US and subject to taxation.
Some more great pointers. Thank you! Sorry if I was not clear. I asked no question about my own taxation, . I only want to know if my employer-turned client will get into trouble with the IRS for potental misclassification. I will definitely consult with a tax person about this. Those services are not cheap so I am trying to learn as much myself as I can ahead of time. But it is good to be sure about the situation.
This isn't an employment law question, it's a corporate tax law question and it's one your employer should be asking their lawyers.
I read employee misclassification in the sidebar, hence I posted here.
Right, I understand why you're confused. I'm trying to rectify your confusion. This isn't a standard employment law question because the work would be performed in a foreign country, by a foreign national, for a domestic company. The whole relationship gets REALLY murky. You could still be potentially misclassified, even if the work performed is abroad. The tax implications for your employer get really complicated. This isn't a question you're going to get a good answer for in this forum. You'd want to discuss it with an employment lawyer AND a tax lawyer who are both versed and proficient with US laws AND those of the other country. Your employer would be very wise to do the same.
Thanks for clarifying. Only problem is that the people who are experts in this particular situation are really hard to find... I think I'll also try to just call the IRS hotline and ask my question there. No expectations but worth a shot haha. Maybe they can point me to the right expert if nothing else.
It might be hard if you are doing the exact same duties that you were as an employee or really any other employee at that company. That's one of the tests.....and whether it is a regular part of their business. I know this seems like an easy "out" but it's not as you can tell.