And also, is there a threshold for foreigners too?
I will ask our VP of Finance about if there is a threshold for submitting W-8BEN. However, to be on the safe side, I would recommend Foreign Contractors to submit this form in any case, as their earnings may vary from year to year.
I have confirmation now that it is optional to submit the W-8BEN for foreign contractors if their earnings are below $600. However, it doesn´t hurt to submit it cause your earnings may exceed the treshold in the future
Alright thanks for the feedback.
Well… All that paperwork is never a breeze to fill-in, especially for non-natives. I’m far from earning $600/year with my nodes anyway. But I get your point.
So my understanding is that above $600 of Storj income, some is kept by Storj to pay a U.S. tax?
And on top of that, my country taxes any crypto to euro conversion at 30% rate.
And SNOs are soon gonna get paid less because of SNO's please don't buy anything
Not blaming anyone here
Just thinking out loud and really wondering if all that is worth it, in the end.
US Tax law is complicated, to say the least. If a company pays a contractor more than $600, they have to send them a 1099, and that is filed with the Internal Revenue Service. It used to be a 1099-MISC but I think they changed it to 1099-NEC for contractors. NEC stands for something like Non Employed Contractor. Anyway… If you are in the United States, the IRS is then aware that you were paid this amount, so you have to file it as income when you file your taxes.
The tax you pay on that is dependent on a lot of factors. You might pay nothing. You might pay a good percentage of it t the IRS. Tax brackets, deductions, total earnings, it is all a factor and everyone’s situation is different.
As long as a foreign contractor is not a U.S. person and the services are wholly performed outside the US, then no Form 1099 is required to be sent to them and no withholding is required. The W-8BEN is just a way for Storj Labs to be able to show the IRS in case of audit why we did not send a 1099 to this particular SNO.
Ah, okay. Thanks for this clarification