>Do you pay taxes when working for non-US client? I've heard that there is some exemption from Fed income tax in this case.

Yes - I pay taxes. Some invoices and payments are serviced through paypal - and I have done some stuff in Denmark and I am talking about a small term posting in France.

You don't pay income taxes to the country you're working in (or for when telecommuting) - always ask how the gross pares down to the net - but you do pay usery taxes (sales taxes tarriffs etc). You are considered a guest worker and treated as an "expat". Sometimes the offer will include room and board.

Always look at the liabilities before you sign on - but - my undestanding is - once the money makes it to your US accounts - it's taxable, unless you're a contractor in a war zone - breathing depleted uranium, however, is a bit more than than I can endure to avoid taxes. Hopefully the "war zones" will close very soon.

A guy I spoke with a few days ago offered the salary in Euros - about 33 percent more in notional dollars - I suggest it would be more interesting if it was in British "Sterlings"!:) - but the salary was better than US forms getting slip-shod .NET 101 (quailty) services from India. IBMs support staff in India grows evey day because most of the solutions delivered are sub-par and US end users are constantly on the phone resolving stupid petty issues.

Three reasons to pay taxes -
1) Some prospects - and prospective "partners" look at Taxable income to judge your production.
2) It's the law
3) As a "self claimed" patriot I understand the necessity of our country paying back the 147 Trillion DOllars it has borrowed. We are fast on the path to being a third world country - who wants that!

Also understand - that American software engineers (because it's so cut-throat or compeditive in the US) are, in most cases, pretty creative. Europeans are less fearful than we are (and more outspoken with their government - no phony respect for elected civivl service employees in Europe! They have social safety nets, 2 months of vacation - but high taxes. Denmark, for example, and Holland, have really hight rates - but everything is so clean - efficient - plus great public transportation.

The fear of failure or the conseqence of failure in Europe are not as grave as they are here in the states.

Holland would be a good post. Lot's of Tele-Comutes out of Africa too!

Always pay you taxes. It's good for your community and it goes to the bottom line of your business and should an oppertunity come along to build a business around your skills and / or copyrights, prospective partners - always interested in sales - want to know how much you produced - sometimes your "founder's" salary is [also] based on IRS reported income.

T