Copyright Agreement Details

So, here's the gist of it:

I’m currently a full-time student over at the University of California, Berkeley, which basically means my work options are pretty limited—I can only take jobs through student employment services, and all that money lands straight in my checking account. I’ve been thinking about diving into web app development for some overseas companies. Since they can't really pay me through Standard Chartered, I heard people mentioning independent contractor agreements. Could someone walk me through what that actually entails? Specifically, how do you go about setting one up with a client based abroad versus one right here in the States? Also, since I'm still a full-time student, am I even allowed to use this setup? And if I can, what's the deal with taxes? Is there a cap on how much I can pull in annually before things get messy? I know with certain types of income there's a threshold where you start getting hit with a heavy tax rate on your total yearly earnings. I really don't want to end up in the crosshairs of the IRS, especially since we're talking about a pretty significant amount of money over the course of the year.

Thanks

Melissa Chase4 said:So, here's the gist of it:

I’m currently a full-time student over at the University of California, Berkeley, which basically means my work options are pretty limited—I can only take jobs through student employment services, and all that money lands straight in my checking account. I’ve been thinking about diving into web app development for some overseas companies. Since they can't really pay me through Standard Chartered, I heard people mentioning independent contractor agreements. Could someone walk me through what that actually entails? Specifically, how do you go about setting one up with a client based abroad versus one right here in the States? Also, since I'm still a full-time student, am I even allowed to use this setup? And if I can, what's the deal with taxes? Is there a cap on how much I can pull in annually before things get messy? I know with certain types of income there's a threshold where you start getting hit with a heavy tax rate on your total yearly earnings. I really don't want to end up in the crosshairs of the IRS, especially since we're talking about a pretty significant amount of money over the course of the year.

Thanks

You don't just lose 25% of everything; once you exceed $17, you simply file your tax return with Standard Chartered, and after accounting for monthly deductions and the 12% rate, that 25% is merely a down payment, meaning you actually end up receiving quite a large refund at the end of the year.

As for working with international clients, I haven't the slightest clue how that mechanism functions.

When it comes to the total annual amount, there isn’t actually a cap on how much a student can earn. That said, ever since January 1st, 2005, any yearly income exceeding $16667 gets hit with a 25% tax rate.

But honestly, that's not really my concern here. I'm trying to get some clarity on the specifics of an author's contract. My mention of Standard Chartered was just a side note while I was thinking out loud.

I figured I’d just jump into this existing thread rather than starting a whole new one... So, here’s my situation: I’m currently a student and I’m still listed as a dependent on my mom’s tax filings, which is also how I’m covered under her health insurance plan—both the standard coverage and the supplemental stuff. I recently finished a freelance project under an independent contractor agreement ($2200) and now I’m wondering if I can file for a tax refund through her return, and if doing that will trigger some kind of change where I’m no longer considered a dependent... If that happens, would I lose my health insurance coverage entirely? I’d really appreciate any insight, this is feeling pretty urgent to me...

So, the creator and the client signed an agreement for some copyrighted work. The author is based here in the US, but the client isn't. Now, the client is asking for an invoice, but from what I gather, an individual can't just whip one up as a private citizen.

So, what's the move? What can the author actually send over?

If you're working under a freelance contract, you don't even bother issuing an invoice; you just stick to the signed agreement that clearly outlines the agreed-upon gross or net amount.

Laura Davis44 said:If you're working under a freelance contract, you don't even bother issuing an invoice; you just stick to the signed agreement that clearly outlines the agreed-upon gross or net amount.

Standard practice is that besides the contract, you still send over an invoice just as a little nudge that, you know, payment is due. Clients pretty much expect an invoice.

So now I'm dying to know—is an author actually allowed (or maybe I should ask if they're forbidden) under US law to issue an invoice or something similar?

I assume this would apply if you’re operating as a sole proprietor under the US tax system—basically, when you issue an invoice for intellectual services performed.

In those situations, how you handle a copyright agreement depends entirely on whether the contract specifies the fee as a gross or net amount, and who is ultimately responsible for the tax hit.

If your client is insisting on a formal invoice, just draft one that reflects the terms of your signed agreement. Make sure to include your professional details, the total amount due, and then simply settle the tax obligations with the IRS afterward.

You might find this helpful: http://www.iammoney.com/Issuing-and...1,-R2)/51.aspx

Terry Lee8 said:I assume this would apply if you’re operating as a sole proprietor under the US tax system—basically, when you issue an invoice for intellectual services performed.

In those situations, how you handle a copyright agreement depends entirely on whether the contract specifies the fee as a gross or net amount, and who is ultimately responsible for the tax hit.

If your client is insisting on a formal invoice, just draft one that reflects the terms of your signed agreement. Make sure to include your professional details, the total amount due, and then simply settle the tax obligations with the IRS afterward.

You might find this helpful: http://www.iammoney.com/Issuing-and...1,-R2)/51.aspx

Sales tax isn't even the issue here. People abroad bill for stuff all the time without any hiccups, even in states where there isn't a sales tax at all.

One client actually just sent out an invoice on my behalf once—looks like they do that all the time.

Thanks for the link, I'll check it out.

I need a quick answer here—if I'm working as a musician under an independent contractor agreement, am I required to be a member of the Harvard Graduate School music union? Essentially, I want to know if having my license through ZAMP keeps me fully covered if they ever come for an audit. My understanding is that the union mostly just provides tax incentives for the companies or small businesses hiring me; if a firm pays me via the union, they get a break on the $67 taxes they withhold for me. Is it actually possible for a company to pay me a lower amount on paper—say, $33—while keeping the tax amount the same, and then just handing me the rest in cash?

Is it actually legal to write a clause into a software development contract where the client pays the creator based on sales revenue instead of a flat fee? I’m talking about skipping the fixed gross buyout entirely and opting for a percentage model—something like the client agreeing to wire the author 50% of all program sales generated the previous month, with payments made on the 1st of every month. Is that kind of royalty-based structure enforceable under US law?