Can I declare payments to foreign contractors as a business expense when I file taxes?

Question

I am a U.S. citizen living in the United States. I am helping a YouTuber make his videos by paying people to help make content for his video gaming videos. Two of the three people I pay to do this are from other countries. Soon I will have paid them each in total more than 600$ which, from my understanding, is the point where you need to declare the payments on your taxes(?)
I pay them by using PayPal. Can I just use the PayPal statements to substantiate these payments as a business expense on my taxes? And I wouldn't need them to sign a 1099 because they're not U.S. citizens, correct? And I will have my one U.S. worker sign a 1099. Then would I be okay come tax season? Also I do have my own LLC, if that matters.

Pete Becker · Answer

When you pay somebody for goods or services that are business-related the amount you paid is deductible from your gross income. Regardless of how much it is; there is no threshold. It shows up as a deduction on your Schedule C if you're a sole proprietor or your corporation's 1120s.
I don't know the detailed rules for filing 1099s, but $600 sounds right; that's the threshold for filing a form that tells the IRS that the person you paid got paid. That's so the IRS can track their income; it has nothing to do with deductibility for your taxes. I suspect that you're right that you don't have to file a 1099 for payments to someone in another country, but don't rely on me for that. 
As to documentation, there are no specific requirements. Keep reasonable records. Make sure you understand what's going on in your business and on your tax returns.

Can I declare payments to foreign contractors as a business expense when I file taxes?

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