Legal Question in Tax Law in California

Proof of income for consultation services

Hi,

I will be doing some consulting work for a company in England. I was wondering if I need to have records to prove the income I am receiving for tax purposes. If the state/federal government requires this, what are the minimum requirements?

Thanks

John


Asked on 11/02/04, 2:25 pm

1 Answer from Attorneys

Donald Field Donald L. Field, Jr., Attorney at Law

Re: Proof of income for consultation services

It is not clear from your question whether you will be working in England or receiving income from England for work performed in the United States. If you will be working in England, you may be subject to taxation there, as well as by the United States as a US citizen working abroad. There are special rules for such a situation and there is a tax treaty with England which could affect how the income is taxed.

In any case you should maintain records of the income which you receive. I normally recommend making photocopies of all checks received, making photocopies of deposit slips and the checks attached, and keeping copies of your bank statements. You should also keep copies of any statements of the amounts paid to you which are sent to you by the company for which you are performing services, as well as copies of any invoices which you submit to receive payment.

If you are a sole proprietor and perform the services in the US, the income and expenses from this business would normally be reported on Schedule C of your Form 1040 and California Form 540.

Read more
Answered on 11/03/04, 2:08 pm


Related Questions & Answers

More Tax and Taxation Law questions and answers in California