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#86993 - 04/05/10 08:58 PM Taxes on Internet Income. Use SSN or NIE?
colenot Offline
Full Member

Registered: 06/17/09
Posts: 79
I have been living in Spain as a resident (through marriage) for 1 year now and work from home (income from websites).

At the present time, I still have everything under my social security number in the USA. I have an NIE number in Spain and was wondering if I should switch my tax info.

Should I pay taxes in the US or in Spain?

About half of my income gets deposited to a Spanish bank account and the other half is deposited to a USA bank.

I don't have any employees, physical products, or inventory, just income from advertisements and affiliate programs from a bunch of sites.

I should be living here for a few more years (as a home base at least).

So, where should I pay my taxes? If here, am I supposed to set up as an "Autonomo" even though I just work at home on the internet?


Thanks!

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#87006 - 04/06/10 12:32 PM Re: Taxes on Internet Income. Use SSN or NIE? [Re: colenot]
MadridMan Offline


Executive Member

Registered: 05/06/00
Posts: 10011
Loc: Madrid, Spain (was Columbus, O...
Oh, boy. It may be too late to start, if you don't know how to do it (yet). I have an English-speaking (from Ireland) "gestor" who does all mine for me. I'd be lost without him.

Since you're a US citizen but residing (with legal residency, as you are) abroad, you have to at least file a tax return in the USA and include your income from your Spanish endeavors. Not sure what the figure is now but if you make something like more than $110,000 you have to pay US income tax on the amount in excess of that. If below that amount, you don't have to pay tax but you do have to file a return.

As for Spain, you'll have to file a return here, of course, and pay income tax. I image you've been paying social security and all that too.

A retired US military guy near Madrid does my U.S. taxes for me, which is complicated as I have to include all my Spain-based business stuff too. If you want, I'll give you his number, but can't guarantee he's taking on new clients.

Saludos, MadridMan
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#87008 - 04/06/10 02:44 PM Re: Taxes on Internet Income. Use SSN or NIE? [Re: MadridMan]
colenot Offline
Full Member

Registered: 06/17/09
Posts: 79
Thanks for the info!

Originally Posted By MadridMan
Oh, boy. It may be too late to start, if you don't know how to do it (yet). I have an English-speaking (from Ireland) "gestor" who does all mine for me. I'd be lost without him.


Too late to start? Do you mean for this year? Or do you mean since I first got my residency?


Originally Posted By MadridMan

I image you've been paying social security and all that too.


Paying social security in Spain? I briefly taught english for 2 months when I first moved here (as I was ramping up my internet stuff) and I think my employer had me as autonomo, but they paid me before I even had an NIE number (it was a favor). My internet stuff took off and I hadn't needed to work there since.

So, I don't think that I have paid any social security in Spain.

I just hired a cpa to do some back taxes for me in the states, but haven't gotten around to asking him about my new situation.

I may not need your cpa's info in the USA, but I might be able to use an english speakin gestor.

Can you tell me what a gestor normally costs here? Also, someone told me that autonomo's have to pay a minimum of 250€ a month to the govt for being an autonomo. Is this paying taxes?

Is it necessary to be "autonomo" if I work online with no employees and no spanish clients?


Confuuuuuuuuuuused...


Thanks for your help!





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#89138 - 02/19/11 12:37 PM Re: Taxes on Internet Income. Use SSN or NIE? [Re: colenot]
colenot Offline
Full Member

Registered: 06/17/09
Posts: 79
MM,

Are you also paying taxes in the US as well as Spain for your internent income?

I fear switching my Google account (or starting a new one in Europe to be able to switch currencies and to deposit in my Europe bank account) because my sites are focus in the US.

Did you have any issues or notice a lower ecpm in Adsense after you switched to the Euro account/currency with Adsense?


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#89139 - 02/19/11 02:47 PM Re: Taxes on Internet Income. Use SSN or NIE? [Re: colenot]
MadridMan Offline


Executive Member

Registered: 05/06/00
Posts: 10011
Loc: Madrid, Spain (was Columbus, O...
colenot, every U.S. Citizen MUST file a tax return - no matter where in the world they're living or where they're a resident.

*If you are a U.S. citizen and NOT a legal resident of Spain (or other cofiuntry) then you are required file a tax return and pay income tax on ALL U.S. based income.

*If you are a U.S. citizen and a LEGAL RESIDENT of Spain (or other country) you are required to file a tax return. IMPORTANT: you only pay income tax on the amount in excess of (something like) $95,000 USD.[/b]

So, if you are making less than $95,000K you don't have to worry about paying income tax but you still need to file a tax return. The USA is the ONLY country IN THE FRIGGIN' WORLD which REQUIRES its citizens to pay income tax if they are living abroad (if over $95K).

When I got my residency I switched over my Google account to my Spain address - it wasn't so hard 5 years ago, not sure now - and I had to digitally fill out and sign a U.S. tax form on Google.com that I was a U.S. citizen living abroad, had to include my Spanish mailing address and my Spanish bank account to which the funds are transferred directly.

Hope all that helps.

I didn't notice any difference in the account/amount once I moved to Spain and switched currencies, no. The only minor issue is that during the transition there is a few days wait for which you may not be paid through Adsense. They may be better about that now and keep track of everything during the transition.

To address your questions in your previous posting to which I didn't reply - sorry about that:
Cost for "Gestores" vary. Mine costs me about 200 Euros per month but with that I get 1 hour of consultation and he also does not only processes my quarterly invoices but also takes care of & files my company's income tax as well as my own personal income tax. I think 200 Euros is the minimum amount you can go. I never use my 1 hour of consultation time per month. Never, but it's good to have out there in case I need him. My "gestor" is Ireland and bilingual, a young-ish guy of nearly 40 years old. Let me know if you'd like me to put you in touch with him. His office is on the Gran Vía.

Paying the 250 Euros per month to become "Autonomo" - "self employed" - is not considered a tax, really. It pays into your (minimum, in this case) pension as well as your health care.

Now my biggest pain in the rear is having all my Spanish income - both personal and Spain-based company - filed for the annual U.S. income tax return. It's a pain because it's kind of complication with corporate taxes paid, etcetera, etcetera and so I pay someone about 250 EUROS(!!!) to prepare it for me. This year I'm going to find someone in the USA to do it but at first look-around it could be just as expensive. Luckily, we have until June to file our US tax returns.

Hope this helps. Saludos, MadridMan
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#89142 - 02/20/11 12:43 AM Re: Taxes on Internet Income. Use SSN or NIE? [Re: MadridMan]
colenot Offline
Full Member

Registered: 06/17/09
Posts: 79
I am a US citizen and a legal resident. I have not started the "autonomo process" and I so I do not pay social security in Spain. I am not worried about paying into social security, really (maybe I should be), I just focus on building my own nest egg to be able to afford anything that I want or need in the future.

Perhaps I'll do it at some point, but it's not my priority now.

I am currently working on 7 years of back taxes in the US, 3 yrs completed, working on the remaining 4 yrs left (well, my CPA, that I found on Yelp, is). I pay him $500 a year for each year.

The problem is, I don't know how much longer I want to live in Spain. I am only here because of my son now and I only see him less than 8hrs a week.

I have lived here close to 2 yrs now, and have once lived here for 14 months in 2002. About 3 yrs total.

I'll just say that miss the entrepreneur spirit in the US and being around ambitious people. Spain is fun, but that's it. I need fun and a proactive environment. Many of my friends here are broke english teachers that party all the time. It's cool and I have fun, but I need more.
I would probably think differently if I worked at a Spanish company or something, but my mentality is way too big to settle for what I would be paid.

So, I work at home. Well, to be honest, I don't really work anymore as all my websites run on autopilot. I have all day to do whatever and aside from hitting the gym for a couple of hours a day and an intercambio from time to time, I am bored as hell.

I will do some traveling this coming month to shake some things up.

My long term plan may be to live here 3-6 months a year and back in the states for the other part of the year, each year. We'll see how it goes.

This is why I have not taken any steps to become an autonomo since I may just live in the states for most of each year and only a few months out of the year in Madrid (to be close to my son as he grows).

So, I may just hold off on switching Google accounts. I just hate having to withdraw money from my US bank account and deposit it here.

We'll see how it goes. For now, its a work in progress...


Edited by colenot (02/20/11 01:21 AM)

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#89144 - 02/20/11 05:50 AM Re: Taxes on Internet Income. Use SSN or NIE? [Re: colenot]
pedmar Offline
Executive Member

Registered: 02/26/06
Posts: 2336
Loc: Morbihan, France
Europe is different of course. I am a US Citizen too, and do file my US taxes but only pay to France. If you want more help, see those trying to help us Americans Abroad, I am a member for many years and do participate actively in the community here, see
www.aaro.org

And we get together in Paris, have done meeting in Brussels and other French cities, maybe they need to do one in Madrid ::)
http://www.meetup.com/american-197/

Hope it helps


Edited by pedmar (02/20/11 05:52 AM)
Edit Reason: new webpage
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http://paris1972-versailles2003.com/

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#89149 - 02/20/11 12:26 PM Re: Taxes on Internet Income. Use SSN or NIE? [Re: pedmar]
colenot Offline
Full Member

Registered: 06/17/09
Posts: 79
I appreciate the help, bro!

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#89153 - 02/21/11 08:20 AM Re: Taxes on Internet Income. Use SSN or NIE? [Re: colenot]
pedmar Offline
Executive Member

Registered: 02/26/06
Posts: 2336
Loc: Morbihan, France
No problem, hope it helps you.
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http://paris1972-versailles2003.com/

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