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I work as an independent contractor and was sent home after refusing a
job request I did not have time to complete. Does this make me an employee or an
independent contractor?
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 The issue of your status is not determined by this one incident
alone, however, if you were working on the premises of the company and did work similar to
others who are considered employees, then you are probably an employee. Use form W-8
(found at www.irs.gov) to determine your status.
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I am in the process of launching my online service and need advice on
how and where to set-up my new company, either as a Corporation or an LLC in either
California or Delaware.
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The choice of entity and its location depends on a variety of
factors. Because of California's gross receipts tax on LLCs, a start-up with high gross
receipts relative to net income should not be a California LLC. A Delaware corporation is
probably the best entity if one is seriously considering going public, but in the short
run, it can be tax disadvantageous, especially if the company is subject to California
taxes because it is based in California. A Delaware LLC is also a good choice, but you'll
have to convert to a corporation if future investors or venture capitalists require stock
instead of membership interests in an LLC.
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I am
retired and plan to move to Switzerland. I have retirement income of $2000 a month, plus
income from rental property in California that I will spend in Switzerland. Where will I
pay taxes?
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As a U.S. citizen, you are taxed on your world-wide income, regardless of
where you live, so you complete your tax returns (Federal and state) accordingly. If you
are a non-California resident, then you file the 540NR to report your rental income and
deductions. If you meet the foreign residency test, then certain income earned in the
foreign country may be exempt from U.S. taxes (you must make a special election for this
treatment on your Form 1040). If you are also subject to Swiss taxes, generally there is a
foreign tax credit for taxes paid to a foreign country (in this case, U.S. taxes paid
should provide for a tax credit against your Swiss tax obligation, if any).
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A foreign
corporation (BVI) with non-resident alien shareholders owns an information technology
patent. The corporation does business with American financial institutions and receives
royalties for the use of the patent. Does the 30% withholding tax apply?
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It depends on
sourcing issues and how the contract and agreements are drafted. If the patent is truly
foreign source, there should not be withholding on the royalty payments. If the company is
considered engaged in a trade or business in the U.S., then U.S. tax laws apply.
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Independent Contractor Status
