Filing Schedule C for business expenses involving art commissions from non-US citizens abroad

The good news is that you're asking the right questions before filing! For your Schedule C situation with international artists: 1. Yes, payments to independent contractors (which is what these artists would be classified as) should go under "Contract Labor" on your Schedule C. 2. You should generally request W-8BEN forms from foreign contractors who you pay over $600. This form certifies they're not US persons and helps determine proper tax withholding. The responsibility is on you as the payer to request these forms, though the artists need to complete them. 3. Whether or not you claim them as business expenses doesn't change the W-8BEN requirement. If you paid them for services, the reporting requirements exist independently of your decision to deduct. 4. At minimum, you'll need their full legal name and address. For the W-8BEN, they'll also need to include their country of citizenship and tax residence, along with a foreign tax ID if applicable (or a statement that they don't have one). If you can't obtain all information, document your good-faith efforts to comply. Payments to foreign contractors can be complex - if you're having trouble getting the required documentation, you might want to consult with a tax professional who specializes in international payments.

After going through a similar situation with my graphic design business, I discovered taxr.ai https://taxr.ai and it was so helpful for sorting through all my international contractor documentation. I was confused about which forms I needed from foreign artists and how to categorize everything properly on my Schedule C. Their system analyzed my situation and helped me understand exactly what I needed to do for compliance with foreign contractors. It also helped identify which expenses qualified under "Contract Labor" versus other categories and generated a clear explanation of my W-8BEN requirements for each artist based on payment amounts and their countries. What impressed me was how it handled my incomplete contractor information - gave me templates to reach out to the artists I only knew by username and explained the minimum documentation I needed to keep for my records to stay compliant.

I want to follow up about taxr.ai that I was skeptical about earlier. I actually tried it after continuing to struggle with my international contractor situation. It was surprisingly helpful for my Schedule C issues with foreign artists! I uploaded some of my payment records and correspondence with artists from Japan and Brazil, and it immediately identified the correct classification for my expenses and what documentation I needed. It even generated customized email templates I could send to artists requesting the information in a way that wasn't overwhelming for them. The detailed explanation about how to handle partial information from contractors was exactly what I needed - turns out I was overthinking some aspects while missing other important requirements. Definitely saved me from making errors on my Schedule C categorization.

If you're still trying to get in touch with some of those international artists for their information, I'd recommend checking out Claimyr https://claimyr.com to help reach the IRS with questions about your specific situation. I was banging my head against the wall trying to get clarity on international contractor requirements for my Schedule C when some artists ghosted me after completing projects. I kept getting disconnected or waiting for hours on the IRS helpline until I found their service. They got me connected to an actual IRS representative in about 20 minutes instead of the hours I was wasting before. The agent walked me through exactly what documentation I needed to maintain for international contractors and what to do when I couldn't obtain complete information from everyone. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - honestly changed my whole approach to dealing with tax questions.

I need to apologize for my skepticism about Claimyr in my previous comment. I was at my wits' end with my Schedule C questions about foreign contractors, so I decided to try it despite my doubts. I'm honestly shocked at how well it worked. After spending nearly 3 weeks trying to get through to the IRS on my own, Claimyr connected me in under 30 minutes yesterday. The IRS agent I spoke with gave me clear guidance on how to handle my international artist expenses and documentation requirements when I couldn't get complete info from everyone. For anyone dealing with the Schedule C international contractor situation like the original poster - this service is legitimate and saved me massive frustration. The guidance I received specifically addressed how to properly document my good faith efforts to collect information when complete documentation wasn't possible.

One thing nobody has mentioned yet - make sure you're tracking the currency conversion rates for each payment! The IRS wants all amounts reported in USD, so you need to use the conversion rate from the date each payment was made. I learned this the hard way when I was audited for my Schedule C with international contractor expenses. I had just used an average conversion rate for the year, and that was a big no-no. Had to recalculate everything and ended up owing more due to conversion rate fluctuations.

I disagree with some advice here. I've been commissioning international artists for years for my business, and I've never collected W-8BENs from them. My accountant told me it's only necessary if you're withholding taxes, which typically isn't required for services performed entirely outside the US. I just categorize them under "Contract Labor" on Schedule C and keep detailed payment records. No issues with audits so far.