how to show income from paypal as export income
PayPal pays with service tax, where ever you have exported you would have given the invoice, and the statement should be shown. I am also an exporter, I know the rules some times a CA might not be aware of PayPal. Just show your statement from PayPal and the deduction.
"I haven't dealt with this kind of thing in any way, but I found some quotes from IRS publications which I think are relevant and hopefully help. Your scenario sounds to me like a Qualified Tuition Reduction as described in Publication 970 Tax Benefits for Education. It appears the rules are different for graduate study as opposed to pre-graduate work, though I don't see anything about any dollar amount limit. There are various requirements and exceptions, so hopefully reading through that section of the publication can help you understand whether the benefit is supposed to be taxable. If taxable, it should show up on your W-2 like any other income: Any tuition reduction that is taxable should be included as wages on your Form W-2, box 1. Report the amount from Form W-2, box 1, on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ).  It doesn't appear that there is any special designation or box for the tuition reduction as opposed to ""normal"" work, it just is income that's been earned like any other. If you need guidance on how much of the income is for ""normal"" work and how much is for the tuition reduction, you probably need to see if you can figure it out from her pay stubs, or contact the university's HR department. Well, looking through the credits I see in Publication 970, there appear to be two possible credits: The ""American opportunity credit"" section, under ""No double benefit allowed"", says things like (my emphasis added): You can't do any of the following.  ⋮ My understanding from reading through the section is that expenses are only excluded if they were tax-free, so that there can't be a double-dipping of benefits. If they're included as taxable income, I think they would count under your second interpretation, that the employer paid them like any other income, and your wife spent them as educational expenses just like other students, and they would qualify for educational credits. In fact, it explicitly states: Don't reduce qualified education expenses by amounts paid with funds the student receives as: Which sure sounds to me that anything that counts as W-2 Box 1 ""Wages"" would be payments received that then the expenses were logically paid separately from. The other credit, the ""Lifetime Learning Credit"", appears to use identical language (No double benefits; and don't reduce by wages). Obviously this is just from my looking through Publication 970; there may be more nuances here and for ""real"" advice you may want to speak more to the university HR department (who perhaps have dealt with this before) and/or a real tax advisor. You might also see if you can get any sort of a ""receipt"" or even a Form 1098-T from the university of what amount was paid on your wife's behalf, to help document it is truly that she was just paid more wages and spent them on classes as far as tax law is concerned." How realistic is it that I will be able to get a home within the 250,000 range in the next year or so?  Very unlikely in the next year.  The debt/income ratio isn't good enough, and your credit score needs to show at least a year of regular payments without late or default issues before you can start asking for mortgages in this range. You don't mention how long you've been employed at these incomes, this can also count against you if you haven't both been employed for a full year at these incomes. They will look even more unfavorably on the employment situation if they aren't both full time jobs, although if you have a full year's worth of paychecks showing the income is regular then that might mitigate the full time/part time issue. next year or so? If you pay down your high interest debt (car, credit cards), and maintain employment (keep your check stubs and tax returns, the loan officer will want copies), then there's a slight chance. And, from this quick snap shot of our finances, does it look like we would be able to qualify for a USDA loan? Probably not.  Mostly for the same reasons - the only time a USDA loan helps is when you would be able to get a regular loan if you had the down payment. Even with an available down payment of 50k, you wouldn't be able to get a regular loan, therefore it's unlikely that you'd qualify for a USDA loan. If you are anxious to get into a house, choose something much smaller, in the 100k-150k range. It would improve your debt/loan ratio enough that you might then qualify for a USDA loan.  However, I think you'd still have issues if you haven't both been employed at this rate of income for at least a year, and have made regular payments on all your debts for at least a year. I'll echo what others have suggested, though, strengthen your credit, eliminate as much of your high interest debt as you can (car, credit cards), and keep your jobs for a year or two.  Start a savings plan so you can contribute a small down payment - at least 3-5% of the desired home price - when you are in a better position to buy. During this time keep track of your paycheck stubs, you may need them to prove income over the time period your loan officer will request. Note that even with a USDA loan you still have to pay closing costs, and those can run several thousand dollars, so don't expect to be able to come to the table with no cash. Lastly, there's good reason to be very conservative regarding house cost and size.  If you can, consider buying the house as if you only had the 46k per year.  Move the debt to the person making the lower income, and if you buy the house in the name of the person only making 46k per year, then the debt/loan ratio looks very positive.  Further it may be that the credit history of that person is better, and the employment history is better.  If one of you has better history in these ways, then you might have a better chance if only one of you buys the house.  Banks can't tell you about this, but it does work.  Keep in mind, though, that if you two part ways it could be very unhappy since one would be left with all the debt and the house would be in the other's name.  Not a great situation to be in, so make sure that you both carefully consider the risks associated with the decisions made. "I wrote Retirement Savings Ratio some time ago and 15% seemed the sweet spot. The 15% is 10% saved and 5% match, in my mind. The reason I link is to show a spreadsheet that shares my approach to the analysis.  You list a huge number of things to think about, all great. I'm near Duff's view although I shoot for 20X final  income so 4% of that is an 80% replacement. There's nothing magic about 80. If social security exists, it actually drops the required 80 from you to the 60 or so Duff lists, so we align.  The 'problems' with my sheet - no one gets exact 3% raises for 43 years, so one can go in and change that, maybe higher early on, then slow it down. Returns are 8% every year, so one must go to the sheet or their own plan and reassess how they are doing each year. Disclosure - we are now at 14X our income with a goal of 25 to replace 100%. So we need a cumulative 80% growth (as in S&P at 2500) or the years of deposits to get there. I am nearing 50.  Let me pick one of your questions - ""Your expenses go down at retirement, stay the same, or go up?"" - this is the $64K question. the 80% is an average guess. The general assumption is in this range. If we downsized right after the kid goes to college, we could retire on far less. So, to wrap up, online calculators and spreadsheets only go so far. Your questions are dead on. A planner should ask every one of these questions before assuming any ratio.  Edit - on re-read I am blown away by the list of questions you have here. It's great. And it shows how there's risk no matter what." "You're a partnership. You should ask the money to be paid to the partnership. You'll have to fill partnership income tax return (form 1065) and each of you will get a K-1 schedule with your own personal portion of the income. For example, you're Adam, Ben and Clara. You work together on a project and are being paid. You get a check for $300 issued to ""Adam, Ben and Clara, DBA ABC Partnership"". You don't have to have a DBA, it just makes it easier to show you as a single entity. You then deposit the check to an account you set up for your partnership, and from that account you transfer $100 to each of you. Year end, you file form 1065, showing $300 income, and attach K-1 for each of the partners showing $100 income. That $100 income will flow to your individual tax returns. The overhead here is setting up a partnership account, potentially making a DBA, and filing the extra tax return. That's the proper way to do it, especially if it is something you're going to do regularly. For a one-time thing, one of you can get paid, report it as income on his/her Schedule C, and issue 1099 to the rest of you for your parts, and deduct the amount as his/her expense. Here, the overhead is Schedule C for each of you (instead of Schedule E if handling it as a partnership), extra 1099 forms (instead of 1065 and K-1s), and a risk of one partner defrauding the others (depends on how much you trust each other). With proper documentation, each of these is equally legal, and tax-wise the costs are the same (i.e.: either way you pay the same taxes). With partnership the overhead is a bit more expensive (DBA+1065 extra cost), but in the long term it will make your life easier if you do this kind of thing regularly. You may want to consider setting up your partnership as a LLC/LLP (depending on what your State allows), but that would require State paperwork and potentially more fees." "You are right in insisting upon a proper B2B contract in any business relationship. You wish to reduce your risk and be compensated fairly. In addition to the cost and complexity of international wire transfers, the US companies may also be considering the fact that as an international contractor in a relatively hard-to-reach jurisdiction, payments to you place the company at higher risk than payments to a domestic contractor. By insisting upon PayPal or similar transmitters, they are reducing their internal complexity and reducing their financial exposure to unfulfilled/disputed contract terms. Therefore, wire payments are ""hard"" in an internal business sense, as well as in a remittance transfer reporting sense. The internal business procedure will likely be the hardest to overcome--changing risk management is harder than filling out forms." Three ideas: PayPal is probably the best/cheapest way to transfer small/medium amounts of money overseas. Any accounting software should be able to handle this.  When you invoice them, set the invoice date to the date of the event.  Then receive a partial payment against that invoice.  This will cause your accounting software to display the service income in the correct period as well.  So if you sent them invoice for August 7, 2014 event on May 5th, 2014 and they gave you $500 due, you would see this Income in August ($500 on Cash basis, $1000 on Accrual basis.  When you received the other $500 in August, you would see $1000 for both methods).  You would not see any income in May, when you created the invoice.  This is better for revenue matching with the correct period. When you send them same invoice (say 30 days before the event), Set the software to show payments already received  (it seems that most online accounting software will do this by default).  Here is an example in Freshbooks.    Here is an example in Xero:  Seems they both display information on when you can expect payment on the their respective dashboards.   In the Desktop version of Quickbooks (which I use a lot), it will not show the balance of the customer by default on an invoice.  You will have to modify the invoice template.  There are more details on that here.  In Desktop version of Quickbooks, you can look at Cash Flow Forecast report to see the expected amount coming in.   I hope that helps and good luck. I believe moving reimbursement has to be counted as income no matter when you get it. I'd just put it under miscellaneous income with an explanation.