How Small US Companies Report Payments to Filipino Contractors on Their Schedule C
To report payments to a Filipino contractor on their Schedule C, a US company must follow these steps:
- Determine the total amount paid to the Filipino contractor during the tax year.
- Report the total amount paid to the Filipino contractor on Line 11 of Schedule C (Form 1040), which is titled "Contract Labor."
- Keep accurate records of all payments made to the Filipino contractor, including the date and amount of each payment.
- Issue a Form 1099-MISC to the Filipino contractor if the Filipino was in the US for 90+ days and the total amount paid during the tax year is $600 or more1.
- Ensure that the Filipino contractor has provided a W-8BEN tax form to classify their status as a non-US citizen and determine proper tax reporting and withholdings2.
- Be diligent about worker classification, especially if they are hiring in the Philippines1.
- Keep track of all the required documents and deadlines for filing taxes in the Philippines3.
- All You Need to Know About Schedule C Independent ...
- Hiring From the Philippines: Contractors vs Employees
- A Guide to Freelance Tax in the Philippines
Clients and businesses use the form 1099s to report payments to an independent contractor or freelancer that are over $600.
Step 1: Review Philippine Labor Laws · Step 2: Consider Withholding Taxes & Collect W-8BEN Forms · Step 3: Use an Independent Contractor Agreement.
Freelance Tax Filing and Payment · BIR Form 1701 (Annual Income Tax Return) and BIR Form 0605 · Deadline Date — April 15th of the following year.
