Work for a company in your home country. Help and tips needed.

[Sara_1982 17]

Hi,

Sorry if this is the wrong forum. Please move if needed.

I hope somebody can help or give me some pointers in the right direction. 

I've been living in the States, Michigan, for a year and a half now. I have my 2 year conditional green card. 

I've just got hired by a company from my home country Sweden. I will be working from home in the beginning and I'm so far the only "American" employee. 

What I'm asking is if anyone would know the best way to go about this?

How they should pay my salary, taxes etc. Can I get a 401k, health insurance?

How would be the best way for the company to act?

Hire an accounting firm here in the States who will take care of all of this?

Could they in that case also recommend 401k and health insurance?

They should probably follow American employee regulations and policies, how would they know these? 

This is a dream job for me and really want to be sure that everything is done the right way and that I'm able to get as many benefits as possible. 
Would really appreciate any help I can get! Thanks you! 
Sara

[aaron2020 11,651]

21 minutes ago, Sara_1982 said:

Hi,

Sorry if this is the wrong forum. Please move if needed.

I hope somebody can help or give me some pointers in the right direction. 

I've been living in the States, Michigan, for a year and a half now. I have my 2 year conditional green card. 

I've just got hired by a company from my home country Sweden. I will be working from home in the beginning and I'm so far the only "American" employee. 

What I'm asking is if anyone would know the best way to go about this?

How they should pay my salary, taxes etc. Can I get a 401k, health insurance?

How would be the best way for the company to act?

Hire an accounting firm here in the States who will take care of all of this?

Could they in that case also recommend 401k and health insurance?

They should probably follow American employee regulations and policies, how would they know these? 

This is a dream job for me and really want to be sure that everything is done the right way and that I'm able to get as many benefits as possible. 
Would really appreciate any help I can get! Thanks you! 
Sara

Unless the company establishes a US subsidiary, you would be employed by a foreign company.

 

Most likely, you will be paid and taxed in Sweden.  At tax time, you will need to make the conversion to USD, report your income, take tax credits, etc.  (Under the circumstances, I would hire an accountant versed in transborder income taxes.)

 

You would only get a 401K and health insurance if the company provides them.  It's extremely unlikely that you will get a 401k since they are expensive to establish and run for one person.  A company with one US employee does not have to offer health insurance.

 

They do not have to follow US laws since you would be an employee of a foreign corporation.

 

These are things for you to discuss with your potential employer and for them to figure out.  If they want to know what US laws and regulations they must follow in hiring you, then that is a discussion for their US employment lawyer.

Edited January 11, 2017 by aaron2020

[Lemonslice 4,911]

Some companies are specialized in taking care of that for European employers (look up Axelia partners for example - not suggesting your employer uses their services, just showing what's available).

[MikeMikeG 0]

Hi Sara,

 

Congrats on the job offer. Have you discussed any of this with the company that hired you? Their HR department may know (or not). 

 

One possibility (having worked for a French-based company from the US myself) is that you would be a treated as an independent contractor for US tax purposes.. This means your company pays you a certain amount, but you are responsible for complying with your tax obligations, including your state and federal income taxes, self-employment taxes (medicare, social security). Unless you are covered under someone else's health insurance (spouse?) you may need look on healthcare.gov for options, while the ACA still exists. 

 

Best,

 

Mike

[Sara_1982 17]

5 hours ago, aaron2020 said:

Unless the company establishes a US subsidiary, you would be employed by a foreign company.

 

Most likely, you will be paid and taxed in Sweden.  At tax time, you will need to make the conversion to USD, report your income, take tax credits, etc.  (Under the circumstances, I would hire an accountant versed in transborder income taxes.)

 

You would only get a 401K and health insurance if the company provides them.  It's extremely unlikely that you will get a 401k since they are expensive to establish and run for one person.  A company with one US employee does not have to offer health insurance.

 

They do not have to follow US laws since you would be an employee of a foreign corporation.

 

These are things for you to discuss with your potential employer and for them to figure out.  If they want to know what US laws and regulations they must follow in hiring you, then that is a discussion for their US employment lawyer.

Thank you for you answer! 

I hope I don't have to pay into Swedish taxes since I'm not going to be able to benefit from that, living in the States. It's also a lot higher over there... So would that mean that I would pay double taxes? Both there and here? Doesn't seam right ?

Regarding the 401k maybe the best would be if they pay me an extra 5% (which is what they pay their Swedish employees in pension) and I'll save through my bank by myself. This is a really good job that I'm hoping I'll have for a long time and just want to make sure I'm taken care off ?

[Sara_1982 17]

5 hours ago, Lemonslice said:

Some companies are specialized in taking care of that for European employers (look up Axelia partners for example - not suggesting your employer uses their services, just showing what's available).

 

Thank you! I'll definitely look into that! 

[Suss&Camm 2,213]

9 minutes ago, Sara_1982 said:

Thank you for you answer! 

I hope I don't have to pay into Swedish taxes since I'm not going to be able to benefit from that, living in the States. It's also a lot higher over there... So would that mean that I would pay double taxes? Both there and here? Doesn't seam right ?

Regarding the 401k maybe the best would be if they pay me an extra 5% (which is what they pay their Swedish employees in pension) and I'll save through my bank by myself. This is a really good job that I'm hoping I'll have for a long time and just want to make sure I'm taken care off ?

You will not be taxed double, there are tax treaties in place to prevent this. You can get reimbursed for some of the extra tax payed to Sweden when filing in the US. If you file jointly with husband I believe you can get the foreign tax credits. I'm no expert but I know these are there to prevent double taxation

[Sara_1982 17]

3 minutes ago, Suss&Camm said:

You will not be taxed double, there are tax treaties in place to prevent this. You can get reimbursed for some of the extra tax payed to Sweden when filing in the US. If you file jointly with husband I believe you can get the foreign tax credits. I'm no expert but I know these are there to prevent double taxation

 

Oh well that sounds reasonable ? But will any of my taxes paid go to the US? I want to make sure I'm being a good resident in hope to become a citizen soon ?

I do file jointly so will def look into that if that's the case. 

Thanks! 

[aaron2020 11,651]

You do not get double taxed. 

 

SInce Swedish taxes are higher than US taxes, you will get a non-refundable US tax credit for foreign taxes paid when you file your US tax return.

 

There is no reimbursement for extra taxes paid to Sweden.  (Why would the US subsidize tax payments to another country?)  

[Suss&Camm 2,213]

1 minute ago, Sara_1982 said:

 

Oh well that sounds reasonable ? But will any of my taxes paid go to the US? I want to make sure I'm being a good resident in hope to become a citizen soon ?

I do file jointly so will def look into that if that's the case. 

Thanks! 

No, if you are getting your salary from Sweden you will pay income tax to Sweden, but you will report your income to the US when filing..

[Suss&Camm 2,213]

Just now, aaron2020 said:

You do not get double taxed. 

 

SInce Swedish taxes are higher than US taxes, you will get a non-refundable US tax credit for foreign taxes paid when you file your US tax return.

 

There is no reimbursement for extra taxes paid to Sweden.  (Why would the US subsidize tax payments to another country?)  

... by "reimbursement" I meant the credit..,. perhaps a bad choice of wording..,.

[Sara_1982 17]

4 hours ago, MikeMikeG said:

Hi Sara,

 

Congrats on the job offer. Have you discussed any of this with the company that hired you? Their HR department may know (or not). 

 

One possibility (having worked for a French-based company from the US myself) is that you would be a treated as an independent contractor for US tax purposes.. This means your company pays you a certain amount, but you are responsible for complying with your tax obligations, including your state and federal income taxes, self-employment taxes (medicare, social security). Unless you are covered under someone else's health insurance (spouse?) you may need look on healthcare.gov for options, while the ACA still exists. 

 

Best,

 

Mike

Thank you!

 

They don't really have a HR department. Their finance girl is suppose to take care of it and she asked me to look in to it from my side since I might know more or have contacts since I live here. She was going to look into it from her side. I just want to make sure I'm taken care of in the best possible way since I'm hoping to have this job a long time. ?

 

It just seams hard to having to have that reaposibility myself (taxes).... At least if I don't have to. And I don't want to loose all the good benefits from being an employee; pension, paid vacation, sick days etc. 

 

Unfortunately my spouse doesn't have healthcare from his job so I guess AHA would be the way to go. Really hope they don't take it away, or at least replace it before they do with something that's not going to be worse... ?

[MikeMikeG 0]

6 minutes ago, Sara_1982 said:

Thank you!

 

They don't really have a HR department. Their finance girl is suppose to take care of it and she asked me to look in to it from my side since I might know more or have contacts since I live here. She was going to look into it from her side. I just want to make sure I'm taken care of in the best possible way since I'm hoping to have this job a long time. ?

 

It just seams hard to having to have that reaposibility myself (taxes).... At least if I don't have to. And I don't want to loose all the good benefits from being an employee; pension, paid vacation, sick days etc. 

 

Unfortunately my spouse doesn't have healthcare from his job so I guess AHA would be the way to go. Really hope they don't take it away, or at least replace it before they do with something that's not going to be worse... ?

 

You probably know, but just to throw it out there: benefits like 401Ks, paid vacation, employer's share of social security, sick leave, health insurance, etc are costly employers (anywhere from 20% to 40% on top of the base salary). Add to that whatever they would have to pay a company to set-up and and manage those benefits for you in the U.S... We're talking a lot of money.
 

I'm not sure if your company would have to pay employer taxes in Sweden, or have to deduct Swedish social security and income tax from your paycheck. I hope not, as that would be a nightmare and cost both of you even more money.

 

Another thought on the self-employment aspects:  It's a pain to pay taxes quarterly, but not that hard. The main advantage is that because the company you work with doesn't have to spend so much extra money in benefits, etc, that is all extra money in your pocket (an extra 20-40%?) and you can decide how much you save, how much you spend on health insurance, etc. It may also easier to negotiate vacation time. And because they don't have to figure out all the above details and labor laws in the US system, you will likely also start working sooner, and get paid sooner. 

[Sara_1982 17]

3 hours ago, MikeMikeG said:

You probably know, but just to throw it out there: benefits like 401Ks, paid vacation, employer's share of social security, sick leave, health insurance, etc are costly employers (anywhere from 20% to 40% on top of the base salary). Add to that whatever they would have to pay a company to set-up and and manage those benefits for you in the U.S... We're talking a lot of money.
 

I'm not sure if your company would have to pay employer taxes in Sweden, or have to deduct Swedish social security and income tax from your paycheck. I hope not, as that would be a nightmare and cost both of you even more money.

 

Another thought on the self-employment aspects:  It's a pain to pay taxes quarterly, but not that hard. The main advantage is that because the company you work with doesn't have to spend so much extra money in benefits, etc, that is all extra money in your pocket (an extra 20-40%?) and you can decide how much you save, how much you spend on health insurance, etc. It may also easier to negotiate vacation time. And because they don't have to figure out all the above details and labor laws in the US system, you will likely also start working sooner, and get paid sooner. 

In Sweden every company pays about 38% extra for each employee so paying the 20%-40% extra according to American standards wouldn't be any higher. Although paying a 3 part company might put it over... And, as you say, if they still have to pay taxes for me in Sweden. 

 

I was just really hoping not having to have "my own" company and everything that comes with that. I'm starting February 1st so hopefully everything has been figured out by then... ? Thank you for all your help! 

[Suss&Camm 2,213]

1 hour ago, Sara_1982 said:

In Sweden every company pays about 38% extra for each employee so paying the 20%-40% extra according to American standards wouldn't be any higher. Although paying a 3 part company might put it over... And, as you say, if they still have to pay taxes for me in Sweden. 

 

I was just really hoping not having to have "my own" company and everything that comes with that. I'm starting February 1st so hopefully everything has been figured out by then... ? Thank you for all your help! 

Have you officially moved from Sweden? Made your "anmälan till skatteverket som utflyttad"? If you have you can actually apply to not pay taxes in Sweden... I think you should talk to skatteverket about it. There's a link a bit down on this page about it. Doesn't matter if salary is payed in Sweden or not...

https://www.verksamt.se/driva/anstalla/anstalla-personal-utomlands/anstall-svenska-medborgare-utomlands