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Thinking of moving my business to US
Thread poster: Raffaella Palmisano
Raffaella Palmisano
Raffaella Palmisano  Identity Verified
United States
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English to Italian
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Sep 11, 2018

Hello,

I am planning on moving to the US and establish my freelance business in Utah as I am becoming a resident pretty soon for family reasons. I know every state has different requirements, but right now I am just trying to figure out from you, the experts, what the cheapest option would be in terms of type of business and tax requirements to get a basic idea of the costs of running a business there. Thank you for your suggestions!


 
Octavio Armendariz
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United States
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French to English
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Options for setting up business Sep 11, 2018

You can set up your business as a sole proprietor or as a limited liability corporation. You don't have to register your business anywhere, but you do need a social security number or tax ID to report your translation income to the Internal Revenue Service. There are two type of taxes that you will be subject to: income tax and self-employment tax, the latter being the most onerous. You can look up the tax rates at the IRS website. There are no licensing requirements to work as a translator. You... See more
You can set up your business as a sole proprietor or as a limited liability corporation. You don't have to register your business anywhere, but you do need a social security number or tax ID to report your translation income to the Internal Revenue Service. There are two type of taxes that you will be subject to: income tax and self-employment tax, the latter being the most onerous. You can look up the tax rates at the IRS website. There are no licensing requirements to work as a translator. You can however, choose to take the certification exam with the ATA that can serve as additional leverage to find work. Does this answer begin to answer your question?Collapse


Raffaella Palmisano
Liviu-Lee Roth
 
Raffaella Palmisano
Raffaella Palmisano  Identity Verified
United States
Local time: 06:21
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English to Italian
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TOPIC STARTER
contributions Sep 11, 2018

Thanks for your answer. I have an established business. I am just trying to transfer it without being over-charged with taxes.
So, do you only have taxes to pay and no state pension contributions?


 
Raffaella Palmisano
Raffaella Palmisano  Identity Verified
United States
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English to Italian
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TOPIC STARTER
taxes Sep 11, 2018

I found the answer to my question above, however from some websites it looks like there is a 28% of income tax and a 15.3% of self-employed tax. Does that sound right to you?

 
Thomas T. Frost
Thomas T. Frost  Identity Verified
Portugal
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Medical insurance Sep 11, 2018

Don't forget the cost of health care and anything else you may take for granted in the UK. As far as I know, medical insurance is extremely expensive, and medical costs extremely high in the US, and even with insurance, you may still have to pay a considerable excess (deductible over there) yourself.

Raffaella Palmisano
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Emma Page
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Riccardo Schiaffino
Riccardo Schiaffino  Identity Verified
United States
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English to Italian
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Ask for advice from professionals Sep 12, 2018

Once you are in the States, hire an accountant to advise you about tax requirements and what's the best legal structure for your business in the USA: in addition to federal taxes you may have to pay local taxes and/or business taxes.

Also, make sure you are legally entitled to work in the States: if you become a permanent resident ("green card" holder), you should be able to work with few or no restrictions. If, on the other hand, you are a resident as a spouse of a US person or a
... See more
Once you are in the States, hire an accountant to advise you about tax requirements and what's the best legal structure for your business in the USA: in addition to federal taxes you may have to pay local taxes and/or business taxes.

Also, make sure you are legally entitled to work in the States: if you become a permanent resident ("green card" holder), you should be able to work with few or no restrictions. If, on the other hand, you are a resident as a spouse of a US person or a visa holder, you might not be entitled to work in the States at all, or you might be subject to other limitations. Ask a competent immigration attorney.
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Kevin Fulton
Raffaella Palmisano
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Raffaella Palmisano
Raffaella Palmisano  Identity Verified
United States
Local time: 06:21
Member (2018)
English to Italian
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TOPIC STARTER
insurance Sep 12, 2018

Grazie Riccardo. About the insurance, since the UK NHS is so bad, a lot of us have medical insurance here. What I was looking for in this post was more numbers than ideas. Those rates I found (see previous comment) are more or less what you pay? Besides the income tax and a self-employed tax, is federal tax applicable to our category? and how much is it in terms of rate?

 
Emma Page
Emma Page
United Kingdom
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re: insurance Sep 12, 2018

I know this isn't the point of your post, but if you think you can compare having private insurance in the UK to the cost of covering your own healthcare in the US, you've got another thing coming! Try 10x the cost for starters.

Katalin Horváth McClure
P.L.F. Persio
 
Raffaella Palmisano
Raffaella Palmisano  Identity Verified
United States
Local time: 06:21
Member (2018)
English to Italian
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TOPIC STARTER
wrong info Sep 12, 2018

Emma Page wrote:

I know this isn't the point of your post, but if you think you can compare having private insurance in the UK to the cost of covering your own healthcare in the US, you've got another thing coming! Try 10x the cost for starters.


Unfortunately, without data it is impossible to claim anything. So I have done my homework and found a good insurance package for around $110 per month with $1K excess. Compared to my Bupa UK monthly payment of £250 with £200 excess, I still think it is a good deal. Moreover, I did live in US for 7 years, so I am very well acquainted with living cost across the nation. From now on, colleagues, please answer the question I posed in my previous comment with the tax rates instead of giving me vague advice. Thanks!


 
Thomas T. Frost
Thomas T. Frost  Identity Verified
Portugal
Local time: 12:21
Danish to English
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Insurance Sep 12, 2018

If you want figures, then have a look at the cost of private medical insurance from the international expat insurer https://www.asfe-expat.com/index.php?a=en&b=Home. You can get a quote online. The cost of this insurance increases with age, and getting an insurance is subject to a medical declaration.

You have other choices in and outside the US, but you should expect the co
... See more
If you want figures, then have a look at the cost of private medical insurance from the international expat insurer https://www.asfe-expat.com/index.php?a=en&b=Home. You can get a quote online. The cost of this insurance increases with age, and getting an insurance is subject to a medical declaration.

You have other choices in and outside the US, but you should expect the cost of insurance not to be below $1,000 a month, and that's probably in the low end. And you need to budget for all their deductibles, which could run into thousands of dollars a year.

I know this is not the subject, but it is still a very important subject, which could wreck the budget of the unprepared.
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Raffaella Palmisano
Raffaella Palmisano  Identity Verified
United States
Local time: 06:21
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English to Italian
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TOPIC STARTER
off-topic Sep 12, 2018

Thomas T. Frost wrote:

If you want figures, then have a look at the cost of private medical insurance from the international expat insurer https://www.asfe-expat.com/index.php?a=en&b=Home. You can get a quote online. The cost of this insurance increases with age, and getting an insurance is subject to a medical declaration.

You have other choices in and outside the US, but you should expect the cost of insurance not to be below $1,000 a month, and that's probably in the low end. And you need to budget for all their deductibles, which could run into thousands of dollars a year.

I know this is not the subject, but it is still a very important subject, which could wreck the budget of the unprepared.


Thank you but I am not interested in medical insurance and I have already had medical insurance in US, like every insurance package, there are differences, you can add anything you want in it. I would like to have confirmations about the tax rates I placed above ONLY from US-based freelance translators. Thank you everyone else!


 
Katalin Horváth McClure
Katalin Horváth McClure  Identity Verified
United States
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You can find lots of info by a simple search Sep 12, 2018

I think this is a pretty good and detailed explanation of the self-employment tax, including a handy calculator:
https://finance.yahoo.com/news/self-employment-tax-2018-apos-233300451.html

As to income tax, you cannot expect anyone to be able to give you a single figure, because it depends on your income level and a whole range of other parame
... See more
I think this is a pretty good and detailed explanation of the self-employment tax, including a handy calculator:
https://finance.yahoo.com/news/self-employment-tax-2018-apos-233300451.html

As to income tax, you cannot expect anyone to be able to give you a single figure, because it depends on your income level and a whole range of other parameters, for example where you live. Some states do not have state income tax, but most do, and you also have to file and pay federal taxes. Deductions depend on whether you are filing as an individual, or jointly as a married couple, whether you have dependents, etc. This is why it was suggested before to discuss your particular situation with a qualified tax professional. A good tax accountant can save you not only time and headaches, but also money, as there are situations where you are eligible for all kinds of deductions (for example deducting part of your rental or mortgage if you work from home, but you need to know the rules and play by them, otherwise you may be flagged for audit and get into trouble). A good tax professional can also advise you on whether it is best for you to just work as a sole proprietor, or set up an LLC or an S or C corporation, or find some other arrangement. Again, it depends on your particular situation, expected income level and types of income. What works for me, may not work for you, and v.v.
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Kevin Fulton
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Katalin Horváth McClure
Katalin Horváth McClure  Identity Verified
United States
Local time: 08:21
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Health insurance Sep 12, 2018

Raffaella Palmisano wrote:

Unfortunately, without data it is impossible to claim anything. So I have done my homework and found a good insurance package for around $110 per month with $1K excess.


Would you mind telling us where you found this fantastic deal, because it is literally a fraction of what I am used to see for health insurance for individuals.
It is very hard to believe, to be honest.

Are you sure it was for individuals, and not employees of a company where the company pays a huge portion of the actual premiums? Was this an insurance offered through the Utah Health Exchange (which I believe you will be required to use if you live in Utah)? Are you sure you will be eligible to buy that insurance? Also, don’t forget to check enrollment periods, there is usually only a few weeks for open enrollment near the end of the year.

I know you said you don’t want to hear anymore about health insurance, but the system has changed a lot over the past years and it doesn’t seem to have options available as cheap as you mentioned. For most married freelancers the best way is to get coverage through their spouse’s employer’s health insurance. Unless you are below the poverty line, in which case you are eligible for state-sponsored healthcare for free (in most states, if not all).


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IrinaN
IrinaN
United States
Local time: 07:21
English to Russian
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To Kathalin - it's easy:-) Sep 12, 2018

Katalin Horváth McClure wrote:

Raffaella Palmisano wrote:

Unfortunately, without data it is impossible to claim anything. So I have done my homework and found a good insurance package for around $110 per month with $1K excess.


Would you mind telling us where you found this fantastic deal, because it is literally a fraction of what I am used to see for health insurance for individuals.
It is very hard to believe, to be honest.



Raffaella, sorry for high-jacking the topic but the issue is obviously hot.

At least one place: a short-time indemnity to be found here, quote for my age group, https://www.ehealthinsurance.com/ehi/st/plan-details?planKey=73149900:39&productLine=ST and even there it's $10K deductibles + coinsurance. Next thing would be to find a half-decent doctor or hospital who will accept it. Mostly available for 3 months only, renewal for up to 12 is not guaranteed. Worthless unless the bill comes to hundreds of thousands of dollars, then it can be considered a blessing. If that insurance company will approve the procedure at all, that is, and they may not do so regardless of what the policy says. It's more of a way to escape tax penalty but that penalty is no longer there starting 2019.

Real insurance in my age group (post 54) for freelancers in the marketplace - 1300/month, 5000 deductibles and 20% coinsurance. Plus PPO had left Texas after Obamacare kicked in and nearly no one would take HMO, I was to lose all my doctors anyway while living next door to one of the best medical centers in the world, so I keep them in Saint Petersburg's private clinics:-) It's cheaper to fly business (I am lucky to earn enough miles for that every year) over there and be checked and treated like a queen by wonderful specialists for ridiculously low prices, for me. Of course, not for many locals but still not nearly as exorbitant in comparison. Brain and vessel MRI - $250 vs $4-5K in the US.

Back to the topic. Check out Chapter S incorporation. You can pay yourself a very low salary and take the rest as corporate distributions free of self-employed tax. Cons - very low limits for credits/mortgage, and small SS retirement check in future. If the retirement is far away, or you are a good investor yourself and count on your own retirement plans and cash at hand is preferred - it may be for you. Income and federal tax is one and the same - federal income tax.

Good luck!

[Edited at 2018-09-12 21:02 GMT]


 
Riccardo Schiaffino
Riccardo Schiaffino  Identity Verified
United States
Local time: 06:21
Member (2003)
English to Italian
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Health Insurance Sep 12, 2018

Raffaella Palmisano wrote:

Emma Page wrote:

I know this isn't the point of your post, but if you think you can compare having private insurance in the UK to the cost of covering your own healthcare in the US, you've got another thing coming! Try 10x the cost for starters.


Unfortunately, without data it is impossible to claim anything. So I have done my homework and found a good insurance package for around $110 per month with $1K excess. Compared to my Bupa UK monthly payment of £250 with £200 excess, I still think it is a good deal. Moreover, I did live in US for 7 years, so I am very well acquainted with living cost across the nation. From now on, colleagues, please answer the question I posed in my previous comment with the tax rates instead of giving me vague advice. Thanks!


An health insurance for which you pay $ 110 / month will probably not cover anything serious... It may be a supplementary insurance, but not a full coverage one. Or it may have severe limitations about the doctors who are covered (in-network). Or it might be a scam.

Just to give you an idea: I'm 60, and my wife is 59. We are both non smokers and in good health. Our deductible is $5000 / year per person, and the total out of pocket is $ 6,500 per year per person... and we pay some $ 700 per month per person for that coverage.

If you are younger than us you are going to pay less... but the rates will keep on increasing every year.

The NHS is light years better than what you can find here.

BTW... going without health insurance is not a good idea: even if you have to pay for something yourself (because of the deductible) procedures might cost ten times as much for people who don't have an insurance at all.

The best way to think of the health services in the USA is to think of the US as a rich third-world country: fair to excellent health services for the 1%, very costly mid-quality service for the employed middle classes, and prohibitive for the rest (the major cause of individual bankrupcies in the States is related to health costs).

[Edited at 2018-09-12 22:30 GMT]


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