How to know if I can have NOL (U.S. tax)?
"Individuals most definitely can have NOL. This is covered in the IRS publication 536. What is the difference between NOL and capital loss? NOL is Net Operating Loss. I.e.: a situation where your (allowable) expenses and deductions exceed your gross income. Basically it means that you have negative income for that year, for tax purposes. Capital loss occurs when the total amount of your capital gains reported on Schedule D is negative. What are their relations then? Not all expenses and deductions that you usually put on your tax return are allowed for NOL calculation. For example, capital loss is not allowed. I.e.: if you earned $2000 and you lost in stocks $3000 - you do not get a $1K NOL. Capital losses are excluded from NOL calculation and in this scenario you still have non-negative income for NOL purposes even though it is offset in full by capital loss deduction and your ""taxable income"" line is negative. The $1K that was not allowed - gets carried forward to the next year using the Capital Loss Carryover Worksheet in the instructions to Schedule D. You calculate your NOL using form 1045 schedule A. You can use the form 1045 to apply the NOL to prior 2 years, or you can elect to apply it only to future years (up to 20 years). In what cases, capital loss can be NOL? Never."
There are ways to avoid having federal income taxes withheld:  In order to avoid withholding altogether, you’ll have to fall into   both of the following categories: you have no tax liability this year   and you had no tax liability in the previous tax season, so all of the   federal income tax you paid was given back to you. Generally, you can   say you have no tax liability when you’re not required to file an   income tax return or you owe zero taxes. You may also be able to claim   an exemption if your earned income for the year is extremely low   ($1,050 or less). If those conditions apply to you, you can write “exempt” in line 7.   Keep in mind that the exemption only eliminates your federal income   taxes, not your Medicare or Social Security. If your parents use an accountant to prepare their taxes, I'm sure he/she would be able to give you a solid answer on how to fill it out. "1. What forms do I need to file to receive money from Europe None. Your client can pay you via wire transfer. They need to know your name, address, account number, and the name of your bank, its SWIFT number and its associated address. The addresses and names are required to make sure there are no typos in the numbers. 2. What forms do I need to file to pay people in Latin America (or any country outside the US) None. 1099s only need to be filled out when the contractor has a US tax ID. Make sure they are contractors. If they work for you for more than 2 years, that can create a problem unless they incorporate because they might look like ""employees"" to the IRS in which case you need to be reporting their identitites to the IRS via a W-8BEN form. Generally speaking any foreign contractor you have for more than 2 years should incorporate in their own country and you bill that corporation to prevent employee status from occurring. 3. Can I deduct payments I made to contractors from other countries as company expense Of course." You might need to check yes... but I would check out New York's nonresident income tax requirements... My guess is yes if you meet the requirements, but I am not an expert nor do I work in the accounting or legal field. Check out New York's nonresident tax page explaination "hello – I am a natural born US citizen; I have worked 35+ years in the United States; I have a 401(k), IRA, Social Security benefits. I have researched the ex-patriot possibilities for several years. I've consulted both accountants and tax attorneys. The long answer is: hire tax consultants/attorneys to try to shelter what assets you can. 401(k), IRA, and Social Security benefits are all taxable worldwide to US citizens. unless you become the citizen of your new country of residence, these taxes are unavoidable. since all of the above assets are considered ""pretax"" to the US government, they are all taxable on distribution whether slowly or in lump sum. the short answer is: ""Hotel California""… ""Relax, said the watchman – we are programmed to receive. You can check out any time, but you can never leave…""" "The other answer has mentioned ""factual resident"", and you have raised the existence of a U.S./Canada tax treaty in your comment, and provided a link to a page about determining residency. I'd like to highlight part of the first link: You are a factual resident of Canada for tax purposes if you keep   significant residential ties in Canada while living or travelling   outside the country. The term factual resident means that, although you left Canada, you   are still considered to be a resident of Canada for income tax   purposes. Notes If you have established ties in a country that Canada has a tax treaty   with and you are considered to be a resident of that country, but you   are otherwise a factual resident of Canada, meaning you maintain   significant residential ties with Canada, you may be considered a   deemed non-resident of Canada for tax purposes. [...] I'll emphasize that ""considered to be a resident of Canada for income tax purposes"" means you do need to file Canadian income tax returns. The Notes section does indicate the potential treaty exemption that you mentioned, but it is only a potential exemption. Note the emphasis (theirs, not mine) on the word ""may"" in the last paragraph above. Please don't assume ""may"" is necessarily favorable with respect to your situation. The other side of the ""may"" coin is ""may not"". The Determining your residency status page you mentioned in your comment says this: If you want the Canada Revenue Agency's opinion on your residency   status, complete either Form NR74, Determination of Residency Status   (Entering Canada) or Form NR73, Determination of Residency Status   (Leaving Canada), whichever applies, and send it to the International   and Ottawa Tax Services Office. To get the most accurate opinion,   provide as many details as possible on your form. So, given your ties to Canada, I would suggest that until and unless you have obtained an opinion from the Canada Revenue Agency on your tax status, you would be making a potentially unsafe assumption if you yourself elect not to file your Canadian income tax returns based on your own determination. You could end up liable for penalties and interest if you don't file while you are outside of Canada. Tax residency in Canada is not a simple topic. For instances, let's have a look at S5-F1-C1, Determining an Individual’s Residence Status. It's a long page, but here's one interesting piece:  1.44 The Courts have stated that holders of a United States Permanent Residence Card (otherwise referred to as a Green Card) are   considered to be resident in the United States for purposes of   paragraph 1 of the Residence article of the Canada-U.S. Tax   Convention. For further information, see the Federal Court of Appeal's   comments in Allchin v R, 2004 FCA 206, 2004 DTC 6468.   [...] ... whereas you are in the U.S. on a TN visa, intended to be temporary. So you wouldn't be exempt just on the basis of your visa and the existence of the treaty. The CRA would look at other circumstances. Consider the ""Centre of vital interests test"": Centre of vital interests test [...] “If the individual has a permanent home in both Contracting States, it   is necessary to look at the facts in order to ascertain with which of   the two States his personal and economic relations are closer. Thus,   regard will be had to his family and social relations, his   occupations, his political, cultural or other activities, his place of   business, the place from which he administers his property, etc. The   circumstances must be examined as a whole, but it is nevertheless   obvious that considerations based on the personal acts of the   individual must receive special attention. If a person who has a home   in one State sets up a second in the other State while retaining the   first, the fact that he retains the first in the environment where he   has always lived, where he has worked, and where he has his family and   possessions, can, together with other elements, go to demonstrate that   he has retained his centre of vital interests in the first State.” [emphasis on last sentence is mine] Anyway, I'm acquainted with somebody who left Canada for a few years to work abroad. They assumed that living in the other country for that length of time (>2 years) meant they were non-resident here and so did not have to file. Unfortunately, upon returning to Canada, the CRA deemed them to have been resident all that time based on significant ties maintained, and they subsequently owed many thousands of dollars in back taxes, penalties, and interest. If it were me in a similar situation, I would err on the side of caution and continue to file Canadian income taxes until I got a determination I could count on from the people that make the rules." Tax liability in US: You would need to determine if you are a resident alien or non resident alien. Resident alien are taxed normally as per US citizens. For the annual remuneration you have quoted it would be in the range of 25%. Refer http://www.moneychimp.com/features/tax_brackets.htm  To determine if you are resident alien or non resident alien, you need to be present for certain period in US. There is also an exemption even if you meet this you can still be treated as non resident alien if your tax home is outside US [India in this case] Refer to the link for details to determine your category, the durations are for number of days in financial year, hence it matters when you are in US and the exact durations. http://www.irs.gov/taxtopics/tc851.html Also note that if you are assessed as resident alien, even the income from India will be taxed in US unless you declare there is no income in India. Tax liability in India: The tax liability in India would be depending on your NRI status. This again is tied to the financial year and the number of days you are in country. While the year you are going out of India you need to be away for atleast 183 days for you be considred are NRI. So if you are treated as Indian resident, you would have to pay tax in India on entire income. In the worst case, depending on the period you travel and the dates you travel, you could get classified as citizen in US as well as India and have to pay tax at both places. India and US do not have a dual tax avoidance treaty for individuals. Its there for certain category like small business and certain professions like teacher, research etc. Many states have a simple method for assessing income tax on nonresidents.  If you have $X income in State A where you claim nonresident status and  $Y income overall, then you owe State A a fraction (X/Y) of the income  tax that would have been due on $Y income had you been a resident of State A.  In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount.  If you are a resident of State B, then State B  will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is.  As a practical matter, many commercial real-estate  investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual  bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return.  As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will  recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which  will be sheltered from Federal tax since the passive losses finally get  to be deducted.  At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well. "Nothing ""happens"" to it. It works the same way regardless of whether you are a U.S. citizen or resident or not. Taxes and penalties work the same way on withdrawal. That said, if you are not in the U.S. and don't have any income in the U.S. in a particular year in the future, you can take advantage of the fact that your U.S. tax that year will probably be zero. Then, if you withdraw a little bit, even if they count as taxable income, your U.S. income will still be so low that it may be under your personal exemption, or if not at least it will be taxed in the lowest tax bracket." "If your sole proprietorship losses exceed all other sources of taxable income, then you have what's called a Net Operating Loss (NOL). You will have the option to ""carry back"" and amend a return you filed in the last 2 years where you owed tax, or you can ""carry forward"" the losses and decrease your taxes in a future year, up to 20 years in the future. For more information see the IRS links for NOL. Note: it's important to make sure you file the NOL correctly so I'd advise speaking with an accountant. (Especially if the loss is greater than the cost of the accountant...)" "I have an indirect answer for you. It is not a numeric answer but it is a procedure. The challenge with paying taxes for an employee besides their share of Social security and Medicare is that you have no idea what their state and Federal taxes are.  Are they married, single, head of household? Is this their entire families income, or is it  extra money to make ends meet? What about state taxes?  It looks like you will need a W-4 from them.  As you know the IRS Tax topic 756 has all the info you need. Federal Income Tax Withholding You are not required to withhold federal income tax from wages you pay   to a household employee. However, if your employee asks you to   withhold federal income tax and you agree, you will need a completed   Form W-4 (PDF), Employee's Withholding Allowance Certificate from your   employee. See Publication 15, (Circular E), Employer's Tax Guide,   which has tax withholding tables that are updated each year.  Form W-2, Wage and Tax Statement If you must withhold and pay Social Security and Medicare taxes, or if   you withhold federal income tax, you will need to complete Form W-2   (PDF), Wage and Tax Statement, for each employee. You will also need a   Form W-3 (PDF), Transmittal of Wage and Tax Statement. See ""What Forms   Must You File?"" in Publication 926 (PDF) for information on when and   where to furnish and file these forms. To complete Form W-2 you will   need an employer identification number (EIN) and your employees'   Social Security numbers. If you do not already have an EIN, you can   apply for one using the online EIN application available on IRS.gov.   This service is available Monday through Friday, 7 a.m. to 10 p.m.   Eastern time. You can also apply for an EIN by mailing or faxing a   completed Form SS-4 (PDF), Application for Employer Identification   Number. International applicants may apply by calling 267-941-1099   (not a toll-free number) Monday through Friday, 6 a.m. to 11 p.m.   Eastern time to obtain their EIN. Refer to Topics 752 and 755 for   further information. Don't forget Federal Unemployment Tax. Pub 15 will have tables so you can determine how much you should have been withholding if you had gone that route. It will be easiest to use a spreadsheet to do the calculations so that what you gave them in their checks is their net pay not their gross. The tables are constructed under the assumption you know their gross pay." "It says that you are exempt ""as long as such interest income is not effectively connected with a United States trade or business"". So the interest is from money earned from doing business with/through AirBnb, a US company. So you will have to report it. Even if your bank doesn't send you a 1099-INT, you have to report it, unless it is under $0.49 because the IRS allows rounding." "The decision whether this test is or is not met seems to be highly dependent on the specific situation of the employer and the employee.  I think that you won't find a lot of general references meeting your needs. There is such a thing as a ""private ruling letter,"" where individuals provide specific information about their situation and request the IRS to rule in advance on how the situation falls with respect to the tax law.  I don't know a lot about that process or what you need to do to qualify to get a private ruling.  I do know that anonymized versions of at least some of the rulings are published.  You might look for such rulings that are close to your situation. I did a quick search and found two that are somewhat related: As regards your situation, my (non-expert) understanding is that you will not pass in this case unless either (a) the employer specifies that you must live on the West Coast or you'll be fired, (b) the employer would refuse to provide space for you if you moved to Boston (or another company location), or (c) you can show that you could not possibly do your job out of Boston.  For (c), that might mean, for example, you need to make visits to client locations in SF on short-notice to meet business requirements.  If you are only physically needed in SF occasionally and with ""reasonable"" notice, I don't think you could make it under (c), although if the employer doesn't want to pay travel costs, then you might still make it under (a) in this case." "You may be considered a resident for tax purposes. To meet the substantial presence test, you must have been physically present in the United States on at least: 31 days during the current year, and       183 days during the 3 year period that includes the current year and the 2 years immediately before. To satisfy the 183 days requirement, count:           All of the days you were present in the current year, and           One-third of the days you were present in the first year before the current year, and           One-sixth of the days you were present in the second year before the current year. If you are exempt, I'd check that ending your residence in Germany doesn't violate terms of the visa, in which case you'd lose your exempt status. If you are certain that you can maintain your exempt status, then the income would definitively not be taxed by the US as it is not effectively connected income: You are considered to be engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant on an ""F,"" ""J,"" ""M,"" or ""Q"" visa. The taxable part of any U.S. source scholarship or fellowship grant received by a nonimmigrant in ""F,"" ""J,"" ""M,"" or ""Q"" status is treated as effectively connected with a trade or business in the United States. and your scholarship is sourced from outside the US: Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the residence of the payer regardless of who actually disburses the funds. I would look into this from a German perspective. If they have a rule similiar to the US for scholarships, then you will still be counted as a resident there." This taxation guide may be helpful in sorting out some of your questions.  I'm not entirely versatile with UK tax, so my answer will stay broad.  I think the answer may be to consult a professional advisor. You may become non-resident but remain UK domiciled.  Everybody has exactly one domicile and it is essentially their permanent home (the place where they intend to one day return and live.  The test is based on your intent - do you intend to return to the UK or do you intend to make another land your permanent home?  Simply traveling about the world will not establish a new domicile for you.  So you may owe some taxes on your worldwide income or capital gains while a UK-domiciled non-resident, as suggested here. If it helps, the UK tax residence rules are listed by HMRC online.  If your business is a corporation, there's a different analysis.  You may also want to refer to the UK-BVI tax treaty.  HMRC offers a tax residence calculator to help sort your residence, if you plan to return often. It is absolutely legal. While studying on a F-1 you would typically be considered a non-resident alien for tax purposes. You can trade stocks, just like any other foreigner having an account with a US- or non-US based brokerage firm. Make sure to account for profit made on dividends/capital gain when doing your US taxes. A software package provided by your university for doing taxes might not be adequate for this.