I received yet another Anonymous comment this week (I really wish you guys would at least leave a nickname or something).
Maybe a crazy question but I'll ask anyway as I know you have experience at least from Australia. If you are being paid money from a location such as this in the U.K., do you pay any type of taxes there in addition to where you might reside. I am in the U.S. and I know that I would have to check with tax people here but I was wondering if you have any idea.
Yes I have a fair idea how it works. Here's how I see it:
You're a writer in the US. If you write for a company in the UK, then it's very likely you'll be paid in UK pounds into your PayPal account. You can't spend pounds in the US, so the first thing you'll do is click the link inside your PayPal account that says "Manage Currency". You exchange your UK pounds for your own currency right there inside your PayPal account.
If you want to spend the money you earned, this means you'll need to withdraw your money from PayPal into your own bank account. Because you're transferring money in your own local currency, that means you're earning that many dollars in US dollars.
The amount that reaches your bank account in US dollars is the amount you report to the IRS as your taxable income.
In my personal situation, I do plenty of freelance writing for clients all over the world. I earn money from Europe, UK and the US every month. It all arrives in my paypal account in various currencies. I change the currency over to Australian dollars and then withdraw it to my local bank account in my local currency.
The amount that reaches my bank account in Australian dollars is the amount I report to the Australian Taxation Office (ATO) as my taxable income.
Earning foreign income really isn't as scary or as difficult as people seem to think it is. The US dollar is fast becoming worthless, so if you can spread your income around to include money coming in from other currencies, then you stand a chance of increasing your income dramatically.
Hope this helps.
It's quite easy once you take a moment to figure out how it's done.