My U.S. clients pay a monthly retainer even when they do not use all my hours. Does that change the tax analysis?
I am a strategy consultant in Brazil with a New Mexico LLC and two U.S. clients on monthly retainers worth $6,000 and $4,000. Some months they use all the time, but other months they barely use any. I do the work from Brazil and have not traveled to the U.S. this year.
I am unsure whether the retainers should be treated the same way as normal service invoices or whether the standby element changes how I should think about the income for U.S. tax purposes.
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