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tranfree issue 6 - 19 September 1999 "Taxation & Dealing with Busy Customers" This tranfree contains...
As always, I would like to strongly encourage people to ask questions. Your anonymity is assured, unless you specifically want to be named. Keep the questions coming - if you don't know the answer to something, the chances are someone else doesn't either. I hope you find tranfree valuable and enjoy reading it. Please tell all your friends about it. Alex Eames
translatortips.com Announcementstranslatortips.com has recently become involved in a new joint venture project. This involves our licensing a brand new product, which is going to be RED HOT in popularity and of particular interest to translators. Unfortunately there's not much more I can tell you at this time because some of the details of the deal are still to be finalised. I expect to make a further announcement in the next issue.
This tranfree's Feature Articles...
translatortips.com Linkers FREE Prize DrawI am keen to get as many of you as possible who have your own websites to link to the translatortips.com website. To encourage you all to put a link to translatortips® on your own site, I am holding a monthly prize draw for everyone who does this. Each month all those people who have put a link on their own website to the translatortips site (and let me know about it) will go into a ballot and the winner gets a FREE translatortips product of their choice from the following:
this winner is Anatoly Zolotkov - please contact me within the next 3 months to claim your prize from the above selection. If you wish to put a link to the translatortips.com site on your site you can find instructions at the bottom of this edition.
tranfree Readers' QuestionsTypesettingI am a fairly new freelance translator. Would you be kind enough to tell me what software you use to send your translations to the publisher such as Word or PageMaker? I use Microsoft Word. My present publisher seems to think that I should put it in PageMaker for the printer. If I put Word on disk, I thought that the rest was up to the printer. Answer Most translators use MS Word in its various forms. If they want you to put it in Pagemaker that is a different service - typesetting - and most printers should be capable of doing this. The confusion is caused by some people who do both translation and typesetting. There is no reason why you should not do both if you want to, but a licensed copy of Pagemaker is quite expensive. If someone is expecting you to present your work in Pagemaker I think you should charge them more for this service. TaxationI am a freelance translator from Louisiana, and I would like to know a little information regarding taxes. I would like to know if US freelance translators report income earned from European agencies or if they just report income earned from US agencies? It seems that European agencies do not report to the US government what they pay out to US-based translators? I have never had to fill out any type of W-9 form or the like when working for European agencies. Even a lot of US agencies do not require their freelance translators to fill out a W-9 form. When this is the case, does that mean that they do not report what they pay out to freelancers as well? Perhaps there are translators out there that just report income earned from US agencies or only from those that require freelance translators to fill out a W-9 form, i.e., they report only what they know is reported. I know that this can be a complicated issue for most freelancers. Any feedback or information regarding this matter is greatly appreciated. Answer All taxation advice should be confirmed with your local tax professional. Having said that, as far as I know, the rules are similar for US and UK in this regard. As a US citizen it is your duty to report your worldwide income to the IRS and pay tax on it. However, if the income is not repatriated into the US - ie you leave it off-shore in another country - I don't think it is taxable until you bring it into the US. This means that if you plan to holiday abroad in the same country a lot, or plan to retire to another country, you can build up savings in that other country without paying US tax. However, your savings may be subject to tax on the interest in some off-shore countries. European agencies are not subject to US law, although the US
government probably wishes that they were! It probably depends on the individual agency whether or not they report what they paid you. But they all have to keep detailed accounts by law, so the IRS could piece together all the information if they were interested in a particular individual. Perhaps there are people who just report income earned from their home country, but the IRS, as the Inland Revenue in the UK, has free and easy access to an enormous amount of data. For example they can access all of your bank account details, all of your credit card details and they can basically track your spending habits pretty accurately and match it up to your reported income. If the two are very different you can expect a visit from the inspectors. They also have a huge amount of past data to fall back on, so they know, for example, what a typical freelance translator in your area and language combination earns. Frightening heh? Well it's the reality of it! The moral of the story is: you have to be pretty clean as far as reporting your income is concerned otherwise you may find yourself in trouble. If you have a good accountant, they will know the best legal tax avoidance strategies for your area. I always recommend professional advice in this area! Banking Problems in CroatiaI have a private account in two large banks in my town. But in both banks I encounter the same problem, as I am a freelancer and do not have a firm. After sending over the completed translation I subsequently send my Invoice (I made one myself in 'excel'). My clients send money by Bank Transfer (SWIFT). So far, so good. Now, people in both of my banks told me "yes, the funds are here at the Bank, but we cannot put the money to your account since it is sent against an Invoice, and you have a private account." To avoid this problem, instead of sending an Invoice, I just write an e- mail to a client with details of payment for the job and also ask them "please don't put the word 'invoice' or 'payment' anywhere in their Payment Order". It worked with three clients, but recently I was offered a job (and did it) for a rather big translation agency and they insist on signed agreements for each job. That's OK, but how am I going to explain to them that I, as a private person, am not allowed to issue an Invoice. I learned from your excellent FREE Report that everything must be crystal clear in the client-translator relationship, or the client might suspect/fear problems. I ask you as an agency person: What might your reaction be if you received an e-mail with details of payment instead of an Invoice? Is that a problem for agency's accounting department? Also I have no experience with cheques. Should I send an invoice and ask for payment by cheque? How can I get paid by Credit Card (this one is a total mystery to me). I have a Diners Card and the Mastercard. Can I be paid through those? Answer This must be some strange aspect of Croatian law which I do not understand. In the UK you do not need to be registered as a company to issue an invoice. I can really only think of five ways around the problem:
There is no problem with an emailed invoice as far as I'm concerned. I can print it and use it as evidence in my accounts. In my experience, at least when I sent a cheque to Poland, it cost 20 GBP for the person in Poland to pay this into his account. A eurocheque is possibly the answer. Have you read tranfree 2? There's a lot of relevant stuff in there. Check out the tranfree archive. To get paid by credit card you have to set this up with the bank. Probably you will need a business account before they will even consider it. You have to set up a merchant account in the same way as if you had a shop or something. If you explain the situation to agency customers in the same way you did to me I think they will do everything they can to help you. The main problem is that often the people who do the accounts are not the ones who handle the jobs. Then they don't know you and so they don't care so much about your individual difficulties.
Selected articles from tranfree are reprinted on the Aquarius website. In addition to being THE place to get yourself listed on the web, Yuri has recently added some NEW translator forums to the Aquarius site that you may wish to visit. Just go to http://www.aquarius.net
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